The Charity Commission has launched a statutory inquiry into a residential care charity for young adults with learning disabilities that owes £1.5m to HMRC.

The move escalates the regulator's engagement with Northamptonshire based William Blake House, which started last November when a compliance case was opened.

The regulator said it is “is now escalating its engagement to a statutory inquiry after determining there are serious concerns around possible financial mismanagement which require a formal investigation”.

This includes the HMRC debt, as well as concerns around late filing of accounts and “possible unmanaged conflicts of interest and potential unauthorised benefit”.

The statutory probe will be looking into whether the trustees are complying with their legal duties in the running of the charity.

The charity’s financial management and whether “robust financial controls” are in place will also be looked at as will whether any of its property is at risk.

Conflicts of interest and possible unauthorised benefits will also be looked at.

According to the charities register the charity’s spending has outstripped its income in three of the last four years, by a total of £720,000.

The charity runs four care homes supporting “the developmental needs of adults with learning difficulties”.

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