Second inquiry into charity finds repeated failings by its trustees

The Charity Commission has issued an official warning to trustees as it concludes its inquiry into Chesed Leyisruel Trust (1141178), a Salford-based charity set up to relieve poverty in the Jewish community and to advance the Jewish faith.

Following the charity’s inclusion in a class inquiry into charities that had failed to submit accounts for two or more years, in May 2017 the Commission opened a statutory inquiry into the charity after it continued to fail in its duty to file financial information.

The inquiry used its powers to obtain the charity’s bank statements. Scrutiny of the charity’s accounts revealed serious concerns regarding 2 loans which the trustees had entered into.

A condition of the first loan required the charity to obtain a 100% mortgage on the property it had bought with the money. However, no mortgage application was made and the property was transferred to a third party. The second loan was made on the basis that the charity would buy a property and sell it at profit within 6 months before repaying the loan in full. That loan is currently outstanding, but no alternative financial arrangements are in place should the plan be unsuccessful.

Borrowing money is a big decision for a charity, so it is concerning that no independent professional advice was obtained. It was also unclear whether trustees considered all relevant factors in making these significant decisions that put their charity at risk.

Three of the trustees were also related, meaning that they likely shared conflicts of interest. Despite this, the Commission found no appropriate conflicts of interest policy. The inquiry also found that record keeping and meeting practice at the charity were poor, and that trustees clearly failed to act on previous regulatory advice regarding the submission of financial information.

The Commission has therefore issued the trustees with an Official Warning setting out 10 steps that must be taken in order to rectify the misconduct and/or mismanagement uncovered by the inquiry.

Amy Spiller, Head of the Investigations Team at the Charity Commission, said:

This case serves as a reminder of the importance of good governance and careful stewardship of charitable funds. The public rightly hold charities to high standards, which these trustees have unfortunately failed to live up to. That’s why we’ve issued this warning to the trustees, which sets out clear steps they must take to put things right.

We want to see charities thrive; that requires trustees to take their responsibilities seriously and consider all decisions appropriately. The trustees have demonstrated a willingness to address our concerns. I hope and expect that this will continue.

The Commission will continue to monitor the charity’s progress, and expects to see evidence of the action taken within 6 months of the Official Warning being issued.

The full report of the inquiry is available on GOV.UK

Ends

Notes to Editors

• The Charity Commission is the independent regulator of charities in England and Wales
• The Commission’s inquiry into Chesed Leyisruel Trust concluded on 20 June 2019
• The Commission issued Chesed Leyisruel Trust with an official warning on 17 June 2019
• One of the 3 related trustees resigned during the course of the inquiry and was replaced by an independent trustee.
• Section 75A(1)(a) of the Charities Act give the Commission the power to issue official warnings.
• An official warning is not a statutory direction. The Commission cannot use an official warning to direct trustees to take specific action. However, it must specify any action it considers the trustees or the charity should take to rectify the breach, misconduct or mismanagement. Furthermore, failure to remedy any breach specified in a warning can be used as evidence of misconduct or mismanagement including when considering whether to exercise other specified powers.
• The official warning can be found on the charity’s register entry.

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This notice was issued to Mr Gilbert, Womblehill, Inverurie, Aberdeenshire:

The following contravened Schedule 5 paragraph 5 (Enforcement of Regulation (EC) No 178/2002) of the Veterinary Medicines Regulations 2013.

• Failure to conduct mixer dispersion tests, routine recovery tests and carryover tests on manufactured feed. Also, failure to complete a HACCP plan and documented procedures.

The improvements required are:

• Copies of analysis of mixer dispersion, routine recovery and carryover to be sent to the inspector, along with a completed HACCP plan & documented procedure for the manufacture of feed.

Thank you, Mark [Mark Tucker, Chairman CityUK].

It’s a privilege to deliver the opening speech at your annual conference.

I hope you will indulge me today if I take a more personal approach to my remarks.

Because I’d like to share with you some of the things I’ve learnt while I’ve been in the role.

You see, as of last week, I’ve clocked up more than 17 months in this job.

That might not sound impressive – but it makes me the longest serving Economic Secretary since 2010.

And measured against the average lifespan of a Brexit Secretary it seems like an eternity.

That said, it won’t have escaped your attention that change is once again in the air.

Very soon, we will have a new Prime Minister, who will no doubt pick his own ministerial team.

I don’t know if, when or where I’ll move, if I’ll have any job.

I just want to be very clear I will do all that I can to support the City while I remain in the job.

This morning I’d like to share some of the priorities I have adopted while in post.

And whatever happens in the next few weeks, this government will always be committed to supporting and enabling the City to maintain and strengthen its world-leading position.

Listening to the City

The first and most important lesson is the need to listen.

During my tenure, I’ve done my utmost to hear as many views as possible across the length and breadth of the sector about the challenges and opportunities of the future.

I’ve heard from investment banks about the difficulties caused by low levels of activity in capital markets…and the pressures they face to cut costs while also introducing new technologies to the trading floor, with all that entails in terms of governance and control.

Insurance companies have told me about the new pricing models that are coming to the fore in response to consumer concerns over value-for-money.

FinTechs tell me about the global competition they encounter in seeking to recruit world class computer programmers and data scientists.

Asset managers tell me about their ambition to cement the UK’s place as a global leader in sustainable and responsible investment and leave ourselves well placed in growing markets beyond the EU.

I could go on…

Whatever your challenges – whatever your ambitions – the government must continue to remove the obstacles that stand in the way of success.

But there is one other thing the City has told me consistently over the past few months.

It stands head-and-shoulders above all other concerns.

It is, of course, the need to bring the Brexit impasse to a swift and satisfactory resolution.

I am clear that we must do whatever is required to ensure the City remains a competitive place to do business.

I know the Chancellor, Philip Hammond, will set out his own thoughts on how we can build on the strengths of our financial services sector when he speaks at Mansion House on Thursday. I’ll be there too…

The City’s historic and enduring strengths didn’t come about by chance. And they can never be taken for granted, whatever the political or macroeconomic context.

You probably don’t need me to remind you that the financial services sector contributed £75 billion in taxes during the last financial year.

We’ve got to have a clear plan to maintain the City’s place at the centre of the global financial system.

And this must be an overriding imperative of whoever becomes Prime Minister.

It would be a tragedy if we lost our competitive advantage by accident, through complacency or lack of decisive action where needed.

Learning the lessons of the financial crash

But listening must be a two-way process.

The City must also recognise the government’s broader obligations to society.

So just as I have sought to understand your concerns, I haven’t shied away from confronting the sector with uncomfortable truths either.

When I came into post in January 2018, I was struck by the extent to which the financial crash still cast a shadow over the City.

That’s why I’ve placed a significant portion of my time seeking to repair trust between consumers and the financial services sector…

…making it possible for small businesses to seek redress…

…and working with regulators to help free mortgage prisoners.

I know the great majority of institutions and firms within the Square Mile continue to work hard to rebuild consumer confidence.

But we can never go back to how things were, and we can never take people’s trust for granted again.

The key lesson for me has been the importance of striking the right balance between risk and regulation.

It’s not easy.

In fact, it’s probably the hardest part of being City Minister.

Occasionally I see a high profile commercial failure making headlines; inevitably it always generates calls for more regulation.

And it begs the question – how far do we go to keep the City safe?

Because my worry is that if you ratchet up the cost of regulation, you will drive our FinTechs and start-ups overseas, along with all the promise and opportunity they represent.

And I don’t believe you can have an enterprising, dynamic and competitive environment without a degree of risk.

Few great entrepreneurs follow a linear path. Risk is a spur for competition. It’s what pushes us forward.

My view is that so long as we guard against systemic risk – and safeguard consumers – we should do our utmost to create the space for enterprise and innovation to thrive.

Financial Inclusion

Safeguarding consumers leads me to the third point I want to raise.

If the financial crash and subsequent recovery taught me anything, it’s that the task of earning people’s faith in our financial system is an unending one.

People should be confident that the right products and services will be there for them at the key moments of their lives.

Those services also need to be there for the whole of society: for the elderly, the vulnerable, the young, and the less well-off.

Because if our financial system only works for the wealthy, or the comfortable, then it’s not really working at all.

The solution isn’t top-down legislation. Or government compelling lenders to act against their commercial instincts.

The solution is to ensure the market is big and broad enough to meet all the varied needs within society.

The financial choices that most of us probably take for granted must be available to people whatever their circumstances.

Consumers deserve the power and freedom to make the best choice of them and their family. With products and services that are affordable, appropriate and sustainable.

I think we can look back on significant progress in recent times…

…capping pay-day loans and rent-to-own schemes to protect the most vulnerable from being exploited…

… interventions on doorstep lending, catalogue credit and overdrafts…

…working to support and develop credit unions and community lenders and boost the supply of affordable credit…

…and launching an integrated Money and Pensions Service to provide joined-up guidance and support to consumers.

But we need to do more to build trust and restore a sense of fairness.

In the coming months, I will be working with community lenders to design a pilot scheme for no-interest loans, as well as ensure the success of the prize-linked savings scheme.

And I also look to mainstream financial services to play a greater role.

Banks in particular must realise that public expectations are growing.

And across the political spectrum, there is an appetite to find radical solutions to the challenges of affordability, inclusion and access.

So, for example, when the last bank closes in a community we expect the sector to find new ways to meet local needs, be it through a Post Office or perhaps even a Shared Banking Hub.

And as new technologies come to the fore – not least the advent of Open Banking – we have an obligation to ensure the benefits are felt across society, being accessible to all.

These issues won’t go away – government, industry and regulators must work cooperatively and intelligently to find solutions.

Skills and talent

And this brings me to the fourth and final thing I’ve learnt that I wish to highlight today, which is about the men and women who work in financial services.

The UK will never be able to compete with the likes of China or India when it comes to the size of our workforce.

Our strength is the quality and depth of expertise found within the financial services sector, in the Square Mile and across the country. It always has been, and it always will be.

So we need to ensure that the City continues to be a place where people are proud to work. Where they feel they are doing something worthwhile: not just making some people richer, but strengthening society and enabling all strata of society to have confidence in their future financial provision.

I believe that financial services can be a force for good –

I have seen how FinTech can help helping renters secure a mortgage – for example Credit Ladder and Bud who are helping people to get their rental payments recognised towards getting a mortgage – or support older people to enjoy their retirement.

And then there’s London’s emerging position as a global centre for green and sustainable finance.

It gives us the means to transition to a low carbon economy without turning the clock back.

Turning the challenge of climate change into a spur for technological, economic and social progress.

The Prime Minister’s commitment to achieve zero net emissions by 2050 only makes us more determined.

It brings the work Sir Roger Gifford and others have been doing to establish the Green Finance Institute into focus.

And it adds new impetus to the government’s own Green Finance Strategy, which will be published very shortly.

Green Finance is just one example. I could equally have mentioned Islamic Finance. Or Cyber-Insurance. Or Insurance-Linked Securities.

All of these opportunities play to the City’s strengths.

As we step out from the EU, I believe our country still has what it takes to tread a bold and confident path in the world.

But this will only be possible if our immigration system enables the City to access the global talent it needs to innovate and grow.

You’ve told me this time-and-again: and I will continue to press your case in Whitehall.

In return, I challenge you to ensure financial services remains a career that will take people as far as their talents will allow.

This means redoubling your efforts to increase the number of women in senior management roles across the sector.

More than 300 organisations, collectively employing over 800,000 employees, have already signed the Treasury’s Women in Finance Charter.

But warm words are not enough – meaningful and sustained leadership at all levels within firms is required to bring about lasting change.

Not just for women, but for all employees, whoever they are and wherever they’ve come from.

Conclusion

Let me draw to a close.

Over the past 17 months, I’ve sought to be a strong voice for financial services in government.

Standing up for your contribution to our economy.

Working to help secure and sustain London’s place at the centre of the global financial system.

And helping to open new markets of the future to UK businesses.

In this job, I’ve travelled to Malaysia, Indonesia, Japan, Italy, Portugal, Austria and Sweden.

In the past month, we held the second UK-US Financial Regulatory Working Group.

And in the last few weeks, I’ve welcomed delegations from Hong Kong and China – the latter just this Monday.

In all my conversations with our global friends there is a recurrent view.

While there are many other European financial hubs, each with their individual strengths, none of them can match all that London has to offer.

And if they believe in our future, then so should we.

Everything I have seen in the past 17 months gives me reason to be confident.

The path ahead is clear.

Together, we must continue to find that all-important balance between risk and regulation.

Together, we must work to ensure the economy addresses the varied needs of our changing society.

And together, we must nurture and access efficiently the markets of the future, not least by remaining open to the best in global talent and skill.

If we do all these things well, we cannot fail to succeed.

Thank you for the privilege to be able to speak today and to serve you in government.

Two military services took place yesterday (Wednesday 19 June) on the western front to commemorate two Welsh soldiers killed during the Great War. The rededication service for Captain (Capt) William Miles Kington DSO, The Royal Welsh Fusiliers, took place at the Tyne Cot Cemetery, Belgium and followed the burial service for an unknown soldier of The South Wales Borderers at the Commonwealth War Graves Commission’s (CWGC) Béthune Town Cemetery, France.

The services, which were organised by the MOD’s Joint Casualty and Compassionate Centre (JCCC), part of Defence Business Services, were conducted by the Chaplain to 1st Battalion The Royal Welsh.

Rosie Barron, JCCC said:

It has been a privilege to work with The Royal Welsh to organise these 2 services. Now more than 100 years after their deaths, it is vital that the sacrifices of such men are not forgotten. To share this experience with the Kington family has been an honour as he is remembered by his family today.

Capt Kington was killed in action having been hit by a shell. He was 38 years old.

Capt Kington’s body was recovered after the Great War and he was buried in Tyne Cot Cemetery as an unknown Captain of The Royal Welsh Fusiliers. As his grave was unidentified, he was commemorated on the Menin Gate.

The final resting place of Capt Kington came to light after researchers submitted evidence that suggested he had been found. Further investigation to corroborate this finding was undertaken by the MOD’s JCCC and the National Army Museum enabling the identification of the ‘Unknown Soldier’s’ grave to be confirmed by the JCCC.

The Kington family said:

We are extremely grateful for the hard work put in by all those who helped identify the final resting place of our great grandfather William Kington. It is wonderful to discover the effort that goes in to preserving the memory of those who fought and died for their country.

Capt Kington was born in Cheltenham, Gloucestershire. Having completed his training at Sandhurst, he joined 1st Battalion The Royal Welsh Fusiliers in September 1896. He served in South Africa during the Second Boer War, 1899-1902, and was most notably present at the Relief of Ladysmith. For his service in South Africa, he was awarded The Distinguished Service Order, the Queen’s South Africa Medal with 5 Clasps, the King’s South Africa Medal with 2 Clasps and was Mentioned in Despatches four times.

On the outbreak of the First World War in August 1914, William re-joined 1st Battalion The Royal Welsh Fusiliers, deplaning at Zeebrugge on 7 October. They arrived in the town of Ypres on 14 October 1914. On 20 October they moved into trenches near Broodseinde.

One of his soldiers was later quoted as saying:

He was a very fine officer, and would crack a joke in the trenches which would set us all laughing our sides out. It made us all mad to avenge his death. 

Unknown Soldier of The South Wales Borderers

The remains of the unknown soldier of The South Wales Borderers were discovered during drainage work on the outskirts of Richebourg, near Neuve Chapelle. He was identified as a South Wales Borderer through artefacts found with the remains. Extensive research showed that this soldier was most likely a member of 1st Battalion The South Wales Borderers who was killed on 9 or 10 May 1915 during the Battle of Aubers Ridge. However, the JCCC are unable to identify him due to there being too many soldiers of that battalion missing from that time.

The unknown soldier was laid to rest by a burial party composed of members of 1st Battalion The Royal Welsh.

The new grave and 2 new headstones were prepared by the CWGC.

Mel Donnelly, CWGC Commemorations Manager said:

The ceremonies held today show how the work of the Commonwealth War Graves Commission continues. The soldier of the South Wales Borderers, recovered by CWGC staff, now lies alongside his comrades. Captain Kington’s grave has been rededicated in the presence of his family with a new headstone bearing an inscription chosen by them. The graves of both men will be cared for by the Commission forevermore.

UK Export Finance (UKEF) has published its results for 2018-19, revealing it provided £6.8 billion in support for UK exports, a record since 1991. Analysis shows these exports have also supported an estimated 47,000 UK jobs as demand for British goods across the globe continues to grow.

Last year the department directly supported 181 companies’ making exports to 72 countries. A further 81 UK companies secured business by supplying to a project supported by UKEF, and thousands more benefited through exporters’ supply chains.

At the heart of the Government’s Export Strategy, UKEF provides guarantees, insurance and loans to help British firms establish themselves in some of the world’s fastest growing markets. ONS figures show UK exports to emerging markets have grown by 62.2% over the last decade to £76.5 billion in 2018 and UKEF support enables many of these countries to buy British goods.

UKEF’s support is provided in partnership with over 100 private sector providers and is repaid over time, with the department charging a premium to cover its costs and the risk it takes on. In 2018-19, UKEF generated more than £330 million in premium income for the Exchequer.

Rt Hon. Dr Liam Fox MP, Secretary of State for International Trade, said:

Over the course of the last 100 years UK Export Finance has led the way in delivering innovative finance to help British companies achieve international success across a wide range of industries across the world.

I am delighted UKEF is marking its centenary with a record year, and as it continues into its second century is supporting not only the UK’s exporters, which are growing in number all the time, but also transformational projects which have a direct impact on the lives of citizens across the globe.

During the year UKEF supported its largest ever transaction, providing a £5 billion package to support BAE Systems’ and MBDA UK’s contract with the government of Qatar. It also connected more than 300 companies with opportunities on overseas projects, and provided over £600 million in support for projects in sub-Saharan Africa as the Government looks to boost trade links between the UK and African countries.

Rt Hon. Dr Liam Fox MP, said:

The UK government’s Export Strategy recognises the importance of UKEF’s support as we make the UK a 21st century exporting superpower.

The strategy outlines a streamlined and targeted offer from government for businesses of all sizes, and sets a new ambition to increase exports as a proportion of gross domestic product from 30% to 35%.

Looking ahead, UKEF will continue to innovate, introducing a new general export facility designed to make its support for exports more flexible for the needs of smaller companies, as well as further enhancements to its product range.

UKEF’s direct lending facility provides a source of highly efficient long-term fixed rate financing, which can give UK exporters a competitive edge. In response to the continued importance of direct lending to UK exporters, the Chancellor announced in the 2018 Budget an additional £2 billion of lending capacity for UKEF, up from £3 billion today.

UKEF’s other business highlights included:

• 79% of companies supported with finance and insurance were small and medium-sized enterprises
• Providing its first ever support for Angola – £419 million to build 3 new hospitals and upgrade 2 power stations
• Deploying £587 million in Direct Lending to support UK exports, while making an additional £2 billion in capacity available in 2020-21 and 2021-22
• Connecting more than 300 UK suppliers with opportunities on projects in Africa and the Middle East through its supplier fair programme
• Generating £332 million in premium income for the Exchequer, more than the previous 3 years combined
• Being named best export credit agency for 2018 by Global Trade Review and Trade Finance Global
• Latest statistics from the ONS show UK firms sold more overseas in the 2018-19 financial year, £639.9 billion, than at any time since records began
• The UK has now achieved 36 consecutive months of export growth on an annual rolling basis
• It comes as separate OECD data reveals UK exports grew faster than Germany, France and Italy between 2016 and 2018

To find out more about UKEF, or see if finance and insurance from UKEF could give you an exporting edge, visit great.gov.uk.