Charities Aid Foundation Answers Treasury Response on Icelandic Banks Inquiry

Charities Aid Foundation (CAF) Chief Executive, John Low, today comments on the Treasury’s response to the Treasury Select Committee’s report into the collapse of the Icelandic Banks.

(PRWeb UK/PRWEB ) June 20, 2009 -- Charities Aid Foundation (CAF) Chief Executive, John Low, today comments on the Treasury’s response to the Treasury Select Committee’s report into the collapse of the Icelandic Banks.

He said, “We’re extremely disappointed that the recommendations of the Treasury Select Committee have been dismissed. Since last summer CAF has been calling for the particular nature of charitable funds to be recognised with its own depositor class within the Financial Services Compensation Scheme.

“As our research shows there is still confusion around current arrangements and our calls for a separate depositor class for charities would simplify the scheme and acknowledge the importance of the charity sector to society.

“Charities who lost funds urgently need access to that money right now. Some are already having to cut back the amount of help they can give others who rely upon them whilst they wait for the administrators to sort things out. That could take years. In the meantime people dependent upon charities are losing out. We would like the Government to give charities affected an interest free loan to see them through until they get their funds back from the administrators.”

CAF presented evidence to the Treasury Select Committee on the collapse of the Icelandic banks and how this had impacted on charities. CAF called for a separate depositor class for charities which was endorsed in the Treasury Select Committee’s final report. The Committee also called for charities who had lost funds to be fully compensated.

A recent survey of 280 charities by the Charities Aid Foundation (CAF) reveals the uncertainty around current rules. Over a third (35%) of charities find the scheme is unclear about the level of protection given to charity funds. A further third (34%) of respondents neither agreed, nor disagreed that they were clear about the level of protection - suggesting that they are also uncertain. Only 32% were clear.

CAF first wrote to the Chancellor last August highlighting the issue of security of charitable banked funds within the context of the FSCS and subsequently wrote with the support of other sector bodies in April 2009. CAF has received no reply to either letter.

For more information please contact James Ketchell on 0207 832 3014 (out of office: 07846 484 192) or jketchell(at)cafonline.org. Alternatively contact Mandy Pursey on 0207 832 3012 or mpursey(at)cafonline.org.

Notes to editors:

1.   The survey of 280 charities by the Charities Aid Foundation (CAF) was carried out in May 2009.
2.   HM Treasury’s response can be viewed here: http://www.publications.parliament.uk/pa/cm200809/cmselect/cmtreasy/656/656.pdf
3.   An organisation can be classified as a retail depositor if they meet one or more of the following criteria:
-   They have a turnover of £6.5m or less
-   £3.26m or less balance sheet total
-   50 or fewer employees
-   They were an unincorporated association with assets of £1.4m or less
4.   CAF’s response to the Treasury Select Committee’s report can be found here: http://www.cafonline.org/Default.aspx?page=17326
5.   The Charities Aid Foundation (CAF) is a charity set up to help other charities by working with donors, companies and charities to encourage and facilitate a culture of giving. They do this by offering products and services that make giving easier, tax efficient and help charities to make the most of donations through their banking and fundraising support services. For more information, go to http://www.cafonline.org on the web.

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