(Immediate Release - 23 March 2012)

The Charity Commission, the independent regulator of charities in England and Wales, has today published a report on its investigation into the charity formerly known as the Knotty Ash Special School Trust. The charity owned land and buildings and was established to provide services and facilities to schools in Liverpool for special educational needs. The charity's sole corporate trustee was Liverpool City Council.

Prior to opening its investigation the Commission was working with the Council to create a scheme to transfer trusteeship of most of the charity's land to Liverpool Lighthouse Ltd (registered charity no.1077293) for use as an eco-garden. This land included the former site of manor house Thingwall House and a smaller house known as Dovecot Lodge. Negotiations regarding the scheme began in March 2009 and were still not concluded in August 2010

Concerns were raised in the local media regarding the lack of use of the land intended for transfer and the fact that a Council employee had been allowed to live rent-free in Dovecot Lodge for over twenty years. Liverpool Lighthouse Ltd also complained to the Commission about the length of time the Council was taking to agree the scheme. The Commission opened an investigation in October 2010, the full findings of which are set out in the regulatory case report.

The investigation found that the land to be transferred had not been used for significant charitable purpose for many years. It also found that, in allowing a Council employee to live in Dovecot Lodge rent-free, the Council had breached its trustee duty to act in the best interests of the charity. Charity property should either be used to further the objects of a charity or be invested to generate income. Although the Council maintains it had made a prior commitment to repay the charity the market rent lost as a result of the breach of trust, it was only after the Commission intervened that £89,000 worth of charitable funds was repaid to the charity.

As a result of the Commission's intervention, a scheme was sealed in September 2011 that transferred trusteeship of the Knotty Ash Special School Trust from the Council to Liverpool Lighthouse Ltd, and changed the name of the charity to Bright Park (registered charity no.526085). A new charity, the Clifford Holroyde Special School Trust, was given the remaining portion of the Knotty Ash Special School Trust's land, on which a special school is sited. It was established with the Council as trustee, but is not required to register with the Charity Commission because its income is under £5,000.

This report reminds trustees that they must use charity assets reasonably, and in furtherance of the charity's objects. They must always act to protect property owned by the charity, monitor its condition and ensure that it is being used properly.

Many charities have a local authority as a sole trustee. Where this is the case, a local authority must make sure that when it is acting as a trustee it acts in the best interests of the charity and does not permit its interests as a local authority to interfere with its decisions as a charity trustee.

End.

PR 06/12

For further information on this story please contact the press office

Notes to Editors

1. The Charity Commission is the independent regulator of charities in England and Wales.See www.charitycommission.gov.uk for further information.

2. Our mission is: to ensure charities' legal compliance, enhance charities' accountability, encourage charities' effectiveness and impact and to promote the public interest in charity.

3. The Charity Commission Media Information Centre, available on the Commission's website, provides useful and relevant background information specifically for journalists, particularly in relation to issues that regularly attract press interest.

4. There are over 180,000 registered charities, some of which have similar names or working names. To avoid confusion, each registered charity can be identified by its individual registration number, which can be checked on the Register of Charities.