Council agencies should be banned from becoming charities

Council agencies should be banned from becoming charities
Third Force News, by Robert Armour


Local authority agencies operating as charities should not be allowed to register with OSCR a leading body has said.  


It comes as Jobs and Business Glasgow (JBG), a so called arms-length external organisation (ALEO) of Glasgow City Council, was forced to shed one third of its staff and is currently subject to a police investigation for misspending millions of taxpayers’ cash.


The agency, which was set-up to help thousands of young people into work and training, has had £4.5m of EU cash halted resulting in the job loses. Over 100 staff are to be made redundant.


It has led to calls for the Office of the Scottish Charity Regulator (OSCR) to review the way it deals with ALEOs.


John Downie, director of public affairs at the Scottish Council for Voluntary Organisations (SCVO), said the Scottish Charities Act and the charities’ test should now be reviewed to prevent these agencies from becoming charities.    


He said: “We don’t believe they are genuine third sector organisations. They’re just another extension of the local authority.  


“They’re not independent as charities should be – the power and the control lies with the local authority, they are working on behalf of the council and are accountable to it, not to an independent board of trustees. 


“As shown with Glasgow East Regeneration Agency (GERA), Riverside Inverclyde and now Jobs and Business Glasgow, these so called ALEOs often fail those they are meant to serve while at the same time taking resources away from genuine charities.


“OSCR urgently needs to look into this issue.”   


The organisation, which was known as Glasgow Regeneration Agency until a relaunch in 2013, has an income of around £25 million according to accounts filed with OSCR.


The police investigation, which is a separate issue from the job losses, came to light when a routine audit of European Union cash it received uncovered an alleged misuse of funds running into millions of pounds.


Currently four senior managers, including its chief executive, have been suspended pending the police investigation and audit.


Figures show JBG engaged with more than 16,000 unemployed people, supported more than 3,500 into work, assisted more than 7,500 into training and helped 500 people to start up a business.


A council spokesman said: “This is a matter the council takes very seriously, which is reflected in the approach it has taken in order to review existing processes and in the timescales set to implement new audit recommendations. The committee will consider the report next week.”


OSCR has been asked to confirm whether it has launched an investigation into JBG.