The Charity Commission has concluded its inquiry into Island Health Trust.
In a report published today, the charity regulator concludes there was a significant misuse of funds at Island Health Trust , determining its spending on consultants and advisors excessive, unreasonable and disproportionate. It found former trustees failed to act in the charity's best interests and did not operate exclusively within the charity's purposes.
Island Health Trust was set up to promote the provision of primary healthcare, establish centres to provide healthcare within the London Boroughs of Tower Hamlets and Newham, and provide grants for health-related education and facilities.
The Commission started monitoring the charity in 2017 following concerns raised about how charity funds were being used and potential private benefit to one or more trustees. The Commission had additional concerns which led it to escalate its engagement to a formal inquiry in November 2017.
Following an extensive investigation, the Commission has disqualified the charity's former Chair, Suzanne Goodband, from serving as a trustee. The regulatory action was taken after the inquiry found the former Chair benefitted from £349,955 over a two-year period - amounting to 60% of the charity's income. The disqualification is in place for 7 years and only applies to being a trustee.
The Commission is also critical of a decision taken by the charity to appoint a consultant known to the former Chair who was paid a total of £105,834.88 across two financial years.
Both of these payments were made for project management services after the charity was approached by a property developer in 2014. The proposal would have involved the charity selling a long lease to the developer, potentially generating more income for the charity. However, the benefits were speculative.
After being approached, the trustees spent funds on project management services to set out a new strategic direction for the charity. The Commission found the amount spent on a project with only speculative benefits to be excessive. The eventual benefits never materialised, and the proposed new direction of the charity did not stay within the purposes it was set up to achieve.
The inquiry also found the decision to enter into a contract with a private company owned by the former Chair was not in the charity's best interest nor were conflicts of interest sufficiently managed.
Wider findings include a lack of oversight of the former Chair by other former trustees and breaching the charity's governing document by paying two former trustees sums of £15,913 and £8,325. Charities must ensure they follow their governing document when it comes to paying trustees. These failures were a breach of trust and amounted to misconduct and/or mismanagement.
During the inquiry, the Charity Commission appointed an interim manager to the charity to work alongside the current trustees. The interim manager was tasked with reviewing the concerns raised about the former trustees and supporting legal action by the current trustees which recovered £165,000 of charity funds.
Amy Spiller, Head of Investigations at the Charity Commission, said:
We as the regulator, and the public, rightly expect trustees to spend funds in a way that best achieves their charity's purpose. While charities can enter into contracts with parties connected to the trustees, this should be cost effective to ensure funds ultimately help those in need, and the conflict of interest must be properly managed.
The actions by the former trustees of Island Health Trust fell short of these expectations and the excessive spending was unjustified.
I'm pleased following our intervention that funds have been recovered and a new trustee board can give the charity a fresh start.
The report , which includes the full findings, is available on GOV.UK.
