We received a petition asking:
“We the undersigned petition the Prime Minister to do everything in his power to assist with the recovery of funds lost by UK charities in the failed Icelandic bank Kaupthing Singer and Friedlander.”
· Read the petition
· Petitions homepage
Read the Government’s response
Thank you for your e-petition.
The Government takes very seriously the difficulties faced by charities that have been affected by the collapse of Kaupthing Singer and Friedlander (KSF) including Naomi House Children’s Hospice, which is the subject of a separate petition. Ministers have met with representatives of the charity sector to understand the challenges they face.
Those charities, like Naomi House, that are not eligible for compensation under the Financial Services Compensation Scheme remain creditors of Kaupthing, Singer and Friedlander in the administration process for that bank. The first payments from the Administrators to creditors are expected to be made by July. The Administrators estimated in their progress report of April 2009 that total distributions to creditors should be a minimum of 50p in the pound.
The rules of the Financial Services Compensation Scheme (FSCS) are made by the Financial Services Authority (FSA). 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.
Government cannot treat charities any differently from the other creditors that are not eligible to claim compensation under the Financial Services Compensation Scheme. There would be an unrealistic precedent set if we were seen to be making a special exemption for charities, as many other not-for-profit bodies such as police authorities, councils and universities have been affected in a similar way and could lead to them having a legitimate expectation that they too would be compensated.
However, the Government recognises 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 front-line 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.
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