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Charities: Insolvency

Volume 492: debated on Tuesday 12 May 2009

To ask the Chancellor of the Duchy of Lancaster how many registered charities declared themselves insolvent in each of (a) the last five years and (b) the last 12 months; and if he will make a statement. (272401)

The information requested falls within the responsibility of the Charity Commission. I have asked the Commission to reply.

Letter from Andrew Hind, dated May 2009:

As the Chief Executive of the Charity Commission, I have been asked to respond to your written parliamentary question on how many registered charities declared themselves insolvent in each of (a) the last five years and (b) the last 12 months.

With regard to how many registered charities declared themselves insolvent in each of the last five years, the Charity Commission do not currently record this information centrally. However, the following tables which set out the number of charities who were removed from the register, in each year, since 2005 and each month since April 2008 and the reasons recorded for their removal. Our data on reasons for removal from the Register only goes back, in a comparable form, to 2005-06.

The following tables refer to those charities which are required to register with the Commission by law. Smaller charities are not required to register with us; the threshold for registration was an annual income of £1,000 until April 2007 when this threshold was increased to £5,000.

Charities removed from the Register due to insolvency are likely to have fallen under the category ‘Ceased to exist or operate for other reasons’. However, it is unlikely that insolvency accounts for more than a small minority.

Reason for removal

2005-06

2006-07

2007-08

Total

Ceased to exist or operate due to merger, incorporation or transfer of funds

1,592

1,725

1,436

4,753

Ceased to exist or operate for other reasons

3,344

2,691

3,270

9,305

Voluntary removal of charities below the minimum registration threshold

28

8

245

281

Duplicate registrations and other corrections

174

152

122

448

Total

5,138

4,576

5,073

14,787

20082009

Reason for removal

Apr

May

June

July

Aug

Sept

Oct

Nov

Dec

Jan

Feb

Mar

Total

Ceased to exist or operate due to merger, incorporation or transfer of funds

148

104

148

54

44

180

112

164

139

153

235

103

1,584

Ceased to exist or operate for other reasons

233

457

314

308

265

300

390

1,367

540

282

398

328

5,182

Voluntary removal of charities below the minimum registration threshold

18

24

22

23

8

22

35

18

27

32

87

300

616

Duplicate registrations and other corrections

5

1

7

3

3

3

1

4

2

4

2

6

41

Total

404

586

491

388

320

505

538

1,553

708

471

722

737

7,423

The figures for 2008-09 show an increase over previous years as a result of our work to improve the accuracy of the Register of Charities. A key aspect of our strategy is the prompt removal of charities that are inactive and with which we can no longer establish contact. The marked peak in November 2008 is a direct consequence of this strategy.

I hope this is helpful.