3rd Report – The Parliamentary and Health Service Ombudsman's investigations into the Charity Commission

The government's response

What the committee recommended 24

1. 1
   The Parliamentary Commissioner Act 1967, in making provision for the Parliamentary and Health Service Ombudsman... Conclusion
2. 2
   In line with the approaches our predecessor committees have taken to the examination of special... Conclusion
3. 3
   The decision to lay a special report before Parliament is a decision for the Ombudsman... Conclusion
4. 4
   Organisations under investigation should be alert to the factors that are weighed up before the... Conclusion
5. 5
   We agree with the Committee of Privileges’ conclusion that the PHSO should not have considered... Conclusion

See all 24 recommendations and conclusions

Sources

• 3rd Report – The Parliamentary and Health Service Ombudsman's investigations into the Charity Commission ↗The committee's report, HC 111, parliament.uk

Recommendations and conclusions 24

1. 1
   The Parliamentary Commissioner Act 1967, in making provision for the Parliamentary and Health Service Ombudsman... Conclusion Conclusion (the committee's words)

   The Parliamentary Commissioner Act 1967, in making provision for the Parliamentary and Health Service Ombudsman (PHSO) to lay special reports before each House of Parliament in cases where an injustice has been done and is unlikely to be remedied, specifically and intentionally sets up a mechanism for political, as opposed to legal, remedy. The House has expressly given the remit to consider such reports to this committee. As such, the reports are part of a wider statutory and parliamentary process that should not be interfered with. That is not to say that this committee will automatically seek to secure compliance with any recommendations the PHSO may have made. If the organisation under investigation believes that the decisions the PHSO has made are wrong, or that the Ombudsman has exercised their powers disproportionately, it is our duty as the responsible parliamentary committee to examine the relevant reports and come to an informed understanding of each party’s position. Yet we must be in a position where we are able to make that judgement, and, if there are attempts to prevent the PHSO from laying its special reports, the work of this committee—and therefore the House—is also so prevented. That is unacceptable. (Conclusion, Paragraph 10)
2. 2
   In line with the approaches our predecessor committees have taken to the examination of special... Conclusion Conclusion (the committee's words)

   In line with the approaches our predecessor committees have taken to the examination of special reports, we have sought to consider the arguments from both the Ombudsman and the Charity Commission fairly and objectively. While we also invited Ms Lara Hall and Mr Damian Murray, the two complainants at the heart of the PHSO’s special reports, to share their views on the investigations with us, our role as a committee is not to reinvestigate the original complaints in question. (Conclusion, Paragraph 11) The role of each organisation
3. 3
   The decision to lay a special report before Parliament is a decision for the Ombudsman... Conclusion Conclusion (the committee's words)

   The decision to lay a special report before Parliament is a decision for the Ombudsman and the Ombudsman alone. The power to lay a special report under section 10(3) is not reserved only for certain cases, for example, those which may affect large numbers of people. If even one individual 71 alone is judged by the Ombudsman to have suffered injustice as a result of maladministration, that individual must still be given the opportunity for any injustice to be remedied. This should have been known by the Charity Commission through its legal advisers. (Conclusion, Paragraph 26)
4. 4
   Organisations under investigation should be alert to the factors that are weighed up before the... Conclusion Conclusion (the committee's words)

   Organisations under investigation should be alert to the factors that are weighed up before the Ombudsman makes the decision to lay a special report. The public availability of the PHSO’s service model policy and guidance is welcome, enabling both organisations and complainants to have access to the policy and guidance used by caseworkers in charge of their complaints. While the main guidance is extremely detailed in other areas of the complaint handling process it appears virtually silent on one of the Ombudsman’s most significant powers. However, we appreciate the PHSO’s position that, given the uniqueness of each case, it would not necessarily be helpful to attempt to prescribe the factors which should be taken into account in any decision to report to Parliament. (Conclusion, Paragraph 27) The PHSO’s investigations and the Charity Commission’s response
5. 5
   We agree with the Committee of Privileges’ conclusion that the PHSO should not have considered... Conclusion Conclusion (the committee's words)

   We agree with the Committee of Privileges’ conclusion that the PHSO should not have considered giving the Charity Commission an undertaking not to lay the special reports before Parliament without first consulting this committee. (Conclusion, Paragraph 41)
6. 6
   If the PHSO should find itself in such a position again—an organisation under investigation requesting... Conclusion Conclusion (the committee's words)

   If the PHSO should find itself in such a position again—an organisation under investigation requesting that the Ombudsman delay laying a special report due to legal action—we require that the PHSO consult this committee before making any undertakings which would delay or frustrate our consideration of the issue. We hope that what happened in this case would give the Ombudsman confidence in refusing to give such a commitment in future. (Recommendation, Paragraph 42)
7. 7
   We note the Charity Commission’s acceptance of the court’s decision to refuse it permission to... Conclusion Conclusion (the committee's words)

   We note the Charity Commission’s acceptance of the court’s decision to refuse it permission to proceed with its judicial review. However, we find it hard to believe that the Charity Commission ever got itself into a position where it believed its best course of action was to pursue legal action against another publicly funded organisation. This had considerable consequences, including: • the significant cost to the taxpayer; • being found in contempt of Parliament by the Committee of Privileges; 72 • causing additional and unnecessary work for the Parliamentary and Health Service Ombudsman; and • most importantly, causing further upset and inconvenience to the two complainants at the heart of the reports in question. (Conclusion, Paragraph 54)
8. 8
   We were assured that the Charity Commission’s Board followed due process. Conclusion Conclusion (the committee's words)

   We were assured that the Charity Commission’s Board followed due process. However, it appears to us that the Board was overly reliant on the legal advice it received and did not take other considerations into account as effectively as it should have done: for example, it should have taken into account the possible reputational impact of taking legal action against another publicly funded organisation and the likely consequence of challenging the authority of Parliamentary Privilege. In its evidence, the Charity Commission has repeatedly emphasised that the advice its Board received indicated legal action should be taken. Yet it was a Board decision to seek permission for judicial review, not a decision taken by the Charity Commission’s lawyers, and the Board must, ultimately, take responsibility. (Conclusion, Paragraph 55) Organisational jurisdiction (1): Was there overreach by the PHSO?
9. 9
   We note the fact the Charity Commission now accepts the PHSO’s remit and jurisdiction. Conclusion Conclusion (the committee's words)

   We note the fact the Charity Commission now accepts the PHSO’s remit and jurisdiction. It is positive that the Commission is of the view it has gained clarity about what the PHSO can and cannot look at in the course of its investigations. We have been concerned by some of the language used by the Commission in relation to the outcome of the judicial review application, which implied that legal proceedings were the only viable route to securing such clarity, and so the decision to take legal action was therefore proportionate and, indeed, almost providing a wider service. We strongly disagree with that position. We also challenge the Charity Commission’s assertion that there will always be a tension between the purposes of the PHSO and the Charity Commission; in our view, if both organisations are operating as they should, their respective aims should not be in conflict. (Conclusion, Paragraph 66)
10. 10
    We note the Charity Commission’s most recent communication with us, wherein Charity Commission Chair Dame... Conclusion Conclusion (the committee's words)

    We note the Charity Commission’s most recent communication with us, wherein Charity Commission Chair Dame Julia Unwin, on behalf of the Commission’s Board, shared a recognition that the legal challenge should not have been pursued. However, despite such assurances, we are still concerned by what we have seen of the culture within the Charity Commission. In our view, the handling of the cases themselves, and, in some instances, the attitude displayed by Charity Commission representatives in pursuing their action and when giving evidence to this committee, has 73 emphasised the need for a significant cultural shift. This unfortunate episode provides an opportunity to deliver this fundamental refresh of the Commission’s culture and operational approach. (Conclusion, Paragraph 67)
11. 11
    We would like to take the opportunity to emphasise the essential role that the Parliamentary... Conclusion Conclusion (the committee's words)

    We would like to take the opportunity to emphasise the essential role that the Parliamentary and Health Service Ombudsman plays in identifying maladministration on the part of public organisations, securing redress in the face of injustice suffered by members of the public as a result of that maladministration, and improving public services more widely. It is vital that public organisations respect the office of the Ombudsman and recognise the importance of complaints in shining a light on public service failures which all such organisations should take seriously. The principles of good administration must be upheld. We recognise that there will inevitably be disagreements during the course of investigations, but the starting point of an organisation under investigation should be curiosity and a willingness to use the investigation as an opportunity to improve, as opposed to defensiveness and questioning the right of the Ombudsman to make their findings. It is the role of this committee to provide assurance regarding the work of the PHSO through our regular scrutiny. (Conclusion, Paragraph 68) Organisational jurisdiction (2): The reviews
12. 12
    We note the Charity Commission’s acceptance that the Parliamentary and Health Service Ombudsman has the... Conclusion Conclusion (the committee's words)

    We note the Charity Commission’s acceptance that the Parliamentary and Health Service Ombudsman has the jurisdiction to assess whether their recommendations have been complied with adequately, and whether, as a result, injustice has been remedied. It is for the Ombudsman, and the Ombudsman alone, to judge whether their recommendations have been complied with. It is unquestionably not a matter for the judgement of the organisation under investigation. It is beyond belief that advisers to the Charity Commission, and the Charity Commission itself, ever thought otherwise. (Conclusion, Paragraph 78)
13. 13
    We note the Charity Commission’s commissioning of the independent and external reviews of the two... Conclusion Conclusion (the committee's words)

    We note the Charity Commission’s commissioning of the independent and external reviews of the two cases, to be led by retired judge Sir Gary Hickinbottom. Sir Gary must ensure that communication with Mr Murray and Ms Hall as to the outcome of the reviews, and the material which informs those outcomes, is as open and transparent as possible. The Commission, while appreciating the independence of the review process, must similarly ensure that its communication with Mr Murray and Ms Hall is as open and transparent as possible. (Recommendation, Paragraph 79)
14. 14
    We appreciate that the external reviews by Sir Gary and his team are ongoing. Conclusion Conclusion (the committee's words)

    We appreciate that the external reviews by Sir Gary and his team are ongoing. The Charity Commission and the PHSO must update us on the outcome of each review and the implementation of the reviews’ conclusions. Following the completion of the reviews, the PHSO must inform us as to 74 whether it considers its recommendations to be implemented adequately, and if it considers the injustice to both complainants to have been remedied. (Recommendation, Paragraph 80) Organisational jurisdiction (3): Was the PHSO asking the Charity Commission to assess criminality in Ms Lara Hall’s case?
15. 15
    It is clear that the PHSO was not asking the Charity Commission to undertake a... Conclusion Conclusion (the committee's words)

    It is clear that the PHSO was not asking the Charity Commission to undertake a criminal investigation in relation to Ms Hall’s case, and it is astonishing that the Commission thought it was. (Conclusion, Paragraph 85)
16. 16
    We are concerned by the position the Charity Commission took and stand by in relation... Conclusion Conclusion (the committee's words)

    We are concerned by the position the Charity Commission took and stand by in relation to the former Chair of the charity, with the Commission suggesting that, as he had already stepped down as Chair, there was no further action for them to take in terms of disqualification. Considering the concerns raised about his behaviour, we find this staggering. Stepping down does not appear to have prevented continued involvement with the charity and its activities and we are mystified as to why further regulatory action was not taken. (Conclusion, Paragraph 94)
17. 17
    We note the fact that the Charity Commission and the PHSO have reached a common... Conclusion Conclusion (the committee's words)

    We note the fact that the Charity Commission and the PHSO have reached a common understanding of their respective roles and that the Commission has now acknowledged that a criminal conviction is not a prerequisite for regulatory sanctions. We further note the Commission’s assurances that Sir Gary Hickinbottom’s review will consider whether the most appropriate regulatory sanction was applied in Ms Hall’s case. (Conclusion, Paragraph 95)
18. 18
    It is self-evident that the Charity Commission, as a civil regulator, must take great care... Conclusion Conclusion (the committee's words)

    It is self-evident that the Charity Commission, as a civil regulator, must take great care in ensuring the action it takes against individuals is appropriate and in line with its powers. The Commission’s position on the most appropriate way to respond to concerns raised around sexual misconduct however remains unclear. Greater clarity and reassurance are required, both by this committee and others, particularly those in the charity sector. The Commission must provide separate answers to each of the questions we have put to them relating to criminal allegations and sexual misconduct. (Recommendation, Paragraph 98) 75 Mr Damian Murray’s case and historic safeguarding concerns: what should the Charity Commission have taken into account?
19. 19
    We note that Sir Gary Hickinbottom will be looking at the Commission’s regulatory response to... Recommendation Recommendation (the committee's words)

    We note that Sir Gary Hickinbottom will be looking at the Commission’s regulatory response to the safeguarding concerns Mr Murray raised. We note the Charity Commission’s acknowledgment of its failure to demonstrate to Mr Murray how it had balanced relevant factors to reach a conclusion on his case. However, as the issue is at the heart of any effort to remedy the injustice to Mr Murray, we recommend that Sir Gary specifically look at the question of whether an “error” was made by the Commission in its original approach to the charity’s failure to report child sexual abuse over a number of years. We would also emphasise that the review as recommended by the PHSO should not be looking at the proportionality of reopening an investigation now, but whether the Commission’s contemporaneous reasoning adequately accounts for the decisions it made. (Recommendation, Paragraph 111) Going forward
20. 20
    We note the Charity Commission’s assurances that it would handle Mr Murray and Ms Hall’s... Conclusion Conclusion (the committee's words)

    We note the Charity Commission’s assurances that it would handle Mr Murray and Ms Hall’s cases differently were they to raise their concerns today. The changes the Commission has made to its internal processes in relation to risk assessments, record-keeping and communication are positive steps. We also note that the PHSO has deemed them to be sufficient. However, we do find it disappointing that the Charity Commission took so long to address these matters in attempting to make itself fit for purpose. (Conclusion, Paragraph 115)
21. 21
    It is vital that individuals who raise concerns with the Charity Commission in the future... Conclusion Conclusion (the committee's words)

    It is vital that individuals who raise concerns with the Charity Commission in the future have confidence in the Commission’s response to those concerns. We emphasise however that the injustice to Mr Murray and Ms Hall is ongoing and it is important that the injustice is remedied in both cases. (Recommendation, Paragraph 116)
22. 22
    We note that the PHSO and the Charity Commission have been working together constructively to... Conclusion Conclusion (the committee's words)

    We note that the PHSO and the Charity Commission have been working together constructively to improve their working relationship following the court judgment. However, we remain unconvinced that formalising a Memorandum of Understanding between the two organisations would be the right step to take when the vast majority of organisations under 76 investigation do not have such an agreement in place. We welcome both organisations’ assurances that they are no longer working towards finalising a Memorandum of Understanding. (Conclusion, Paragraph 121)
23. 23
    Both the PHSO and the Charity Commission must write to us within six months with... Conclusion Conclusion (the committee's words)

    Both the PHSO and the Charity Commission must write to us within six months with an update on the “reset of [their] organisational relationship” and whether any concerns persist regarding each organisation’s understanding of the other’s jurisdiction. (Recommendation, Paragraph 122)
24. 24
    We strongly believe that lessons can be learned from the way Mr Murray’s and Ms... Recommendation Recommendation (the committee's words)

    We strongly believe that lessons can be learned from the way Mr Murray’s and Ms Hall’s cases were handled. We are mindful that responsibility for scrutinising the work and performance of the Charity Commission lies with our colleagues on the Digital, Culture, Media and Sport Committee. We will be writing to the Committee Chair, Dame Caroline Dinenage MP, to highlight our work on these special reports and the gaps in the Commission’s powers, as well as the broader regulatory gaps, particularly around safeguarding. We urge the Government to engage constructively with both the Commission and the Digital, Culture, Media and Sport Committee on how such gaps might be addressed. We welcome the Government’s recognition of the high bar for trustee disqualification, and its new consultation on the extension of the Charity Commission’s powers to tackle extremist abuse. This is a positive first step. However, if the Government is to consult further, for example, around the Commission’s ability to shut down charities, we recommend a consultation with a wider focus, and which has safeguarding at its heart. The consultation should also seek to make an assessment of whether the Commission is making the most effective use of its current powers. A wider review is long overdue, and it is now pressing if the Charity Commission is to maintain both public and parliamentary confidence. (Recommendation, Paragraph 130) 77