SCVO: government arm’s-length organisations should not be charities

SCVO: government arm’s-length organisations should not be charities
Jonathan Last,

The Scottish Council for Voluntary Organisations (SCVO) is planning to investigate Scotland’s local authority arm’s-length organisations (Aleos), claiming that they don’t deserve their charitable status.
Aleos are set up by councils as companies, trusts or charities to deliver a wide range of activities such as leisure services, economic development and property maintenance, usually through a funding agreement with the council. They are subject to local authority control or influence, but have a separate identity from the public body.
John Downie, public affairs director for SCVO, told that he does not believe the organisations should ever be registered as charities. 


“We don’t believe they are genuine charity sector organisations,” Downie said. “They’re just another extension of the local authority. 


“The main thing for us is, where does the power and control lie in these organisations? 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 their board of trustees.


“In a lot of these organisations, if they dissolve then where do the assets go back to? The local authority. OSCR needs to look into this issue.” 


Downie also claims that Aleos are taking contracts and receiving funding that could otherwise have gone to "genuine" charities. 


He pointed to the example of Riverside Inverclyde, which was set up to build a certain number of houses with funding from Inverness council, but has, he said, failed to achieve its aims and can be now used by the council to shift accountability away from itself.


Downie said that SCVO will be delving further into the issue over the next few months and talking to its members about how to respond. It plans to prepare a report of evidence gathered and present it to the Scottish government.
OSCR: governance issues to be addressed

A spokesman for OSCR said the Scottish regulator is aware of SCVO’s views.  


“We are in the process of laying our annual report and accounts today in Parliament, with publication tomorrow,” he said. “As the report will say, one of our priorities for the coming year will be to work with charities and stakeholders to address status and governance issues in Aleos.”