The Petition of the Cash Back for Christie M.E.N. Campaign,

Declares that the Financial Services Compensation Scheme should reimburse the Christie NHS Foundation Trust with the £6.5 million lost in the Icelandic banking collapse.

The Petitioners therefore request that the House of Commons urges the Government to take action to encourage the Financial Services Compensation Scheme to reimburse the Christie NHS Foundation Trust with the £6.5 million lost in the Icelandic banking collapse.

And the Petitioners remain, etc.—[Presented by Mr. John Leech, Official Report, 7 May 2009; Vol. 492, c. 441.]

[P000363]

Observations from the Chancellor of the Exchequer:

The Government note the petition of ‘Cash Back for Christies’ Manchester Evening News campaign, dated 7 May 2009. We are aware that NHS North West has taken the decision to offer financial support to The Christie NHS Foundation Trust, to help them face the challenges resulting from the loss of charitable funds in the collapse of the Icelandic bank, Kaupthing Singer and Friedlander.

The Financial Services Compensation Scheme had earlier ruled that Christies was not eligible for compensation under the Scheme for these deposits. The rules of the Financial Services Compensation Scheme (FSCS) are made by the Financial Services Authority (FSA). These rules and guidance are set out in the FSA Handbook (COMP) which is available on the FSA website.

The FSCS and FSA are independent bodies and the FSCS must administer the Scheme in accordance with its rules, including the assessment of whether or not a claimant is eligible for compensation. The FSCS had decided that Christies was not eligible under these rules and it has no discretion to act outside them.

The Charity Commission is the regulator for the charitable sector and issues guidance on the principles for the investment of charitable funds and the holding of reserves. The Commission’s guidance states that ‘the basic principle governing trustees’ decisions about investing their charity’s funds is that they must take a prudent approach’, and that trustees must have regard to the suitability to the trust of the investment to be made or being reviewed, and to the need for diversification. While it is Government’s role to set out the broad principles and regulatory framework for the management of charitable investments, the third sector is an independent sector.

However, the Government recognise that many charities are struggling in light of the wider economic downturn, and that many are providing valuable support to the most vulnerable people in society during these difficult times. That is why this year’s budget announced a new £20 million Hardship Fund to provide grant support to frontline third sector organisations that have been most severely affected by the current global economic turbulence. This built on the Government’s £42.5 million action plan launched in February—‘Real Help Now: Volunteers, Charities and Social Enterprises’. This package of measures is designed to ensure resources are directed towards the areas of the sector under the most pressure during the economic downturn, helping organisations to modernise and adapt to meet current challenges.