Government can offer 'no guarantee' over charity investments in Icelandic banks » Communities » 24dash.com

The Government today gave no guarantee that millions of pounds invested by charities in Icelandic banks would be safe.

City Minister Paul Myners met charity group leaders to discuss their concern about the estimated £120 million minimum that British charities have tied up with stricken Icelandic lenders.

Speaking after the meeting at the Treasury, Charities Aid Foundation chief executive John Low said: "They gave reassurance they would do their best to help but there was not any guarantee as we would have liked.

"There was no suggestion that there would ever be any guarantee, just that they would make best endeavours to support charities. But that was it."

The National Council for Voluntary Organisations (NCVO) also attended the meeting and had hoped for assurance that the funds of voluntary organisations would benefit from a guarantee similar to that given by Chancellor Alistair Darling to individual savers.

NCVO chief executive Stuart Etherington said: "We had a constructive meeting with the Minister. He has pledged the Government's support to help charities and to help them to pursue assets that might not be available to them at the moment.

"The Minister is looking at constructive ways he can help charities. We will be getting back to him with more information."

The NCVO has now identified seven charities with GBP30 million at risk although it estimates the total investment of British charities at risk to be over GBP120m.

Keith Hickey, chief executive of the Charities Finance Directors' Group
(CFDG) said: "When a recession happens it is always the most vulnerable people who get hurt.

"We will now go as a matter of urgency and identify members suffering losses."

He added: "It is a situation developing all the time."

The Treasury said in a statement that Mr Myners had expressed "concern and support" for the charities in pursuit of their claims against the Icelandic banks.

Officials will continue to work with the voluntary organisations to discuss specific areas of concern and to monitor any impact on charities.

The charity with the largest amount invested in Icelandic banks known to the public so far is Cats Protection. The charity confirmed earlier that it had £11.2m of deposits in Kaupthing Singer & Friedlander (KSF).

A spokeswoman said the collapse of the bank would have "no impact at all on the charity's day-to-day operations".

She said the deposits held by KSF were earmarked for long-term projects only and to provide a safety net in case of real emergencies.

Naomi House children's hospice in Sutton Scotney, near Winchester, Hants, has £5.7m of deposits invested with KSF while the Physiological Society in London confirmed it had £523,000 invested with the same bank.

Kevin Brennan, Minister for the Third Sector in the Cabinet Office,
said: "In the light of recent global economic events, the Government is more determined than ever to support the third sector through the upcoming months and years.

"We recognise that charities, voluntary groups and social enterprises will face tough challenges, particularly in raising donations, while demand for their services is likely to go up.

"The newly founded National Economic Council will consider the impact of the current financial crisis on the whole economy, including the third sector, whose interests will be represented by Cabinet Office ministers and officials at the highest level.

"We are working closely with sector leaders, representing small and large organisations, and I will sit alongside Stuart Etherington to co-chair an upcoming NCVO sector-wide summit to tackle upcoming issues.

"We are also pleased that the sector's regulator, the Charity Commission, is providing advice and guidance for charities and their trustees via its helpline and website.

"The sector is in fact in better shape than ever before to meet the challenges ahead, not least since the Government has doubled investment over the last 11 years to £11 billion a year.

"We are working with the Treasury to do what we can to support those organisations with investments in Icelandic banks, and ensure they are in the strongest possible position to protect their investments."