Charity Commission publishes Smith Institute inquiry report

(Published - 18 July 2008)

The Charity Commission has today published the results of its inquiry into the Smith Institute (registered charity no 1062967).

The Commission’s inquiry reconfirmed that the Smith Institute is a charity and is capable of operating for the public benefit.  The inquiry also found that the Smith Institute is producing work which falls within its charitable purposes, is of educational value and is freely available to the public.

However, the Commission has concluded that the trustees were not sufficiently engaged to ensure the proper supervision of the charity, given the nature of its activities, work programme and the political environment in which it operates. The trustees did not adequately manage the risks to the independence of the Institute and its reputation.

As a result of the inquiry, the Commission has used its statutory powers to make a direction that the trustees now implement a governance review, and report to the Commission on progress in six months’ time.  The Commission will also visit the charity in a year to ensure the actions have been fully implemented and to review their impact.

Andrew Hind, Chief Executive of the Charity Commission, said,

“Trustees of charitable ‘think tanks’ have a responsibility to ensure the political neutrality of the work they do.  When a charity operates close to the political environment, it must safeguard its independence and ensure that any involvement it has with political parties is balanced.

Our inquiry has reconfirmed that the Smith Institute is a charity and has found that it is doing work of educational value. However the trustees did not adequately manage the risks posed to the independence and reputation of the Institute and it was vulnerable to the perception that it was involved in party politics – never acceptable for a charity. We’ve used our powers to require the trustees to take action to put this right and we will be requiring them to report back to us in six months.”

Case reports published into two other ‘think tanks’

Alongside the report on the inquiry into the Smith Institute, the Commission has published reports on two other cases involving educational research charities popularly known as ‘think tanks’: Policy Exchange (1096300) and Reform Research Trust (1103739).  Neither of these were statutory inquiries, but the Commission has published reports on these cases due to the high levels of public interest in charitable think tanks and in order to identify wider lessons for other charities.

In the case of the Reform Research Trust, the Commission was satisfied that the work of the charity was sufficiently balanced as to not give rise to concern of political bias. The Commission has provided the Charity with regulatory advice and guidance on a number of issues and will monitor the Charity to ensure that they make the necessary changes.  

In the case of Policy Exchange, after completing a review of the Charity’s activities and publications the Commission concluded that there was no evidence of party political bias towards the Conservative party or any other political party. The Commission identified that there are a number of areas where the Charity would benefit from regulatory advice and guidance and the Charity has agreed to conduct the review advised by the Commission. The Commission will monitor the Charity to ensure that they make the necessary changes.

Ends.

Notes to Editors

1. The Charity Commission is the independent regulator for charitable activity in England and Wales. Copies of the Inquiry report and the regulatory case reports are available at www.charitycommission.gov.uk.

2. The Smith Institute is a registered charity advancing education in the field of study and research into the economy of the United Kingdom. The Institute was founded in memory of the late Rt. Hon John Smith MP, former leader of the Labour Party and was registered as a charity in June 1997.

3. The Commission opened a statutory inquiry under Section 8 of the 1993 Charities Act into the Smith Institute on 1 February 2007.  The inquiry was opened with the purpose of considering whether the Institute was both established and operating as a charity in accordance with its charitable purpose and whether it was actually advancing the education of the public in the field of study and research into the economy of the United Kingdom. The inquiry was closed on 16 July 2008.

4. Section 8 of the Act provides the Commission with a statutory power to institute inquiries into charities. The Commission has a range of powers that are available to it when a Section 8 Inquiry is open, including the power to direct the charity, or its trustees, officers or employees to take a specific action which the Commission considers is expedient in the interests of the charity.

For further information please contact the press office.

PR26/08