MPs have called on the Charity Commission’s board members to “take responsibility” for their “staggering decision” to take legal action against another public body.

The criticism has been levelled at the regulator in a report by the Public Administration and Constitutional Affairs Committee (PACAC).

Its members have been looking into the regulator’s decision making around the legal action. This saw the Commission attempt to use the judicial review process to prevent the publication in parliament of critical reports by the Parliamentary and Health Service Ombudsman into its handling of two sexual exploitation cases at charities.

MPs have recommended the Commission’s board to learn from the action, which was dismissed by the High Court, “rather than blame it on advice from the organisation’s lawyers”.

They are also concerned that the failed attempt by the Commission “led to a number of negative consequences”, including the £70,000 cost of the legal action to the taxpayer, the regulator being found in contempt of parliament and “significant stress and upset” to the two complainants in the cases.

The Committee welcomes a recent consultation by the government looking at the Commission’s ability to tackle abuse and extremism. However, MPs want to see “a wider review of the Commission’s powers and how it exercises them” take place, adding this “is long overdue”.

‘Litany of poor decision-making’

"The handling of these two highly sensitive cases by the Charity Commission Board should be exhibited as a shining example of how a public body should not conduct itself,” said PACAC chair Simon Hoare MP.

“A litany of poor decision-making has backfired horribly, leading to bad outcomes for everyone.”

He added: “We must not forget that poor handling of cases such as these has real life consequences. First, the individual complainants have been put through a further ordeal which need never have happened.

“Second, when cases such as these are mishandled, it shakes public trust that the system will support them if they are the victims of an injustice.

“The Charity Commission's legal action against the Public Service Ombudsman has done further damage to that trust and it is now the job of the Board to win that trust back."

Independent Review

The Charity Commission has commissioned an independent judge-led review into its handling of both the cases at the centre of the legal row.

The complainants in the cases, Damian Murray and Lara Hall, who have waived their right to anonymity, have also been critical of the Commission. Hall has called for chief executive David Holdsworth to resign, after he was singled out for particular criticism from MPs during their investigation of the Commission.

The Committee adds that “the attitude displayed by Charity Commission representatives in pursuing their action and when giving evidence to this committee, has emphasised the need for a significant cultural shift” at the regulator.

“This unfortunate episode provides an opportunity to deliver this fundamental refresh of the Commission’s culture and operational approach,” add MPs.

Other action taken by the regulator has been to review its risk assessment tool that case workers use and improved training and communication standards for casework staff. It has also carried out improvements in recent keeping.

"The Board fully accepts the committee's recommendations,” said Commission chair Julia Unwin.

“We have long accepted errors in how we approached the two cases investigated by the Public Service Ombudsman and have apologised to both complainants.

“We have also apologised unreservedly to Parliament for persisting with legal action in relation to the Ombudsman's reports.”

She added: “We have already introduced a number of changes to the way in which we assess risk and communicate with those who raise concerns with us.

“An independent review into the way in which we handled the two cases is also underway, led by former appeal court judge Sir Gary Hickinbottom.

“We stand ready to implement any recommendations from that review, and in doing so will reflect carefully on the Committee's findings.”

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