Regulator warns policy makers to “think very carefully” before setting up charity for singular public project

The fact that more than £50m of public funds was spent by the Garden Bridge Trust without producing demonstrable public benefit or impact represented “a failure for charity which risks undermining public trust”, the Charity Commission has said.

In a concluding report on the Garden Bridge Trust, the regulator concluded that the trustees of the charity fulfilled their legal duties in their decision making and that the charity was not mismanaged. However the report was critical of the charity’s approach to transparency and accountability.

On the lessons to be learned, the Charity Commission said it would advise policy makers to “think very carefully” before setting up an entirely new charity to deliver a singular public project or purpose. (Lord Davies, the trust’s first chairman, stated that he had been approached by Transport for London to establish the charity to build the bridge).

The regulator also said it considered it “unlikely that the public would expect risks that are inherent in a major public infrastructure project to be outsourced to such a charity”.

In light of the report the Commission is to update its approach when it receives applications from charities established for the sole purpose of delivering a publicly funded infrastructure project.

The regulator said it would engage with those seeking to establish charity wholly or mainly to deliver a publicly funded project “to ensure they understand the consequences and responsibilities that follow, including the need to meet the public’s expectations around transparency and financial stewardship”.

The Commission also said that trustees of charities that receive public funds to deliver public services or projects should “demonstrate scrupulous accountability and a spirit of transparency and openness to the public”.

The report makes clear that “the legal minimum set out in the accounting framework should be viewed as just that: a minimum, not an aspiration.”

Baroness Stowell, Chair of the Charity Commission, said: “Londoners and taxpayers will legitimately feel angry and let down by the waste of millions of pounds of public money on a charitable project that was not delivered. I understand that anger and am clear that this represents a failure for charity that risks undermining public confidence in charities generally.

“While the charity was not mismanaged, the public would also expect, as I do, that the right lessons are learnt from this case, so that we don’t see a similar failure arising in future.”

Baroness Stowell added: “The Charity Commission’s purpose is to ensure charity can thrive and inspire trust so that people can improve lives and strengthen society. In order to deliver on that purpose, we need to understand the wider context in which charities work and to help shape and update the environment in which they operate – and we need to be driven by the public interest in charity.

“That is why our report goes beyond setting out our regulatory findings regarding the management of the charity in this specific case and looks at the wider circumstances that led to the project’s collapse, and at the lessons that should be learnt as a result.”

The concluding report complements the regulator’s 2017 regulatory report into the management of the Garden Bridge Trust, and sits alongside reports by Dame Margaret Hodge MP and the National Audit Office, which have also examined the project.