Amalgamating dormant funds is sensible, even if it means Aberdeen’s aged virgins lose out

Last week, Aberdeen City Council announced plans to amalgamate 41 charitable funds, including one established in 1634 for the benefit of “aged virgins” and another set up in 1718 to aid “persons deprived of the use of reason” –  a brilliant phrase indicating that political correctness was alive and well in the 18th century.

These funds, all of which hold less than £20,000, will be amalgamated into a fund worth around £130,000, which will be spent for the good of the people of Aberdeen.

It’s not a huge amount, but it’s a lot better than nothing, and there’s every reason to suggest that similar funds are out there, held in trust by every council in the UK. If Aberdeen is typical, there could be many thousands of charitable bequests like this that could be hoovered up to be used for the good of the people.

Decisions like Aberdeen’s are increasingly common in Scotland, but are unlikely to be replicated south of the border, because of a difference in charity accounting. Every charity in Scotland, no matter how small, has to submit accounts to OSCR, meaning that suddenly, councils have discovered a responsibility to submit accounts for scores of charitable trusts with negligible assets and wholly outdated objects, such as the preservation of horse troughs, the provision of fish on Fridays to the deserving poor, and the upkeep of elderly virgins.

In England, these charities are exempt from submitting accounts, and this money is likely to remain unused, and in the hands of councils who do not even know about it.

It has not just affected the smaller funds, either. In other cases, the OSCR says, it has reminded councils of their duty of trusteeship of much larger charities, and has allowed OSCR to suggest to them that a more effective model of governance would serve those funds better.

While it seems over the top to change charity accounting practices just to encourage good trusteeship on the part of councils, the effectiveness of this by-product of OSCR’s policy suggests it might be worth looking at how to encourage councils in England to put the resources they hold in trust to better use.