But only one of 11 Aleos sampled falls below expected standards
Trustees at an arms-length external organisation (Aleo) have be warned by the Office of the Scottish Charity Regulator (OSCR) to improve governance after it was found to be insufficiently independent from the local authority.
Regeneration charity North Ayrshire Venture Trusts had trustees who were all aligned to the council - on top of a constitution that enabled the appointment and removal of trustees by local councillors.
OSCR also said its charitable purposes needed revision to meet the charity test.
Trustees said they would bring in independent board members and bring its governance into line with the regulator’s requirements.
The findings are revealed in a review of Scotland’s 64 Aleos in which the regulator looked in depth at a sample of 11.
OSCR said it undertook the review because of concerns Aleos were not acting independently of local authorities but concluded that the majority were governed adequately.
Most of these bodies operate as cultural and leisure trusts, the regulator discovered, with incomes ranging from £15,000 to more than £110 million.
These 64 Aleos have a combined annual income of £550m – 3% of the total income reported to the OSCR.
Of the other 10 sampled, OSCR concluded: “Although the structure allows it, control is not routinely exercised by the local authority – in general the charities are operating with sufficient independence.
“Where the local authority has exercised powers, this has been in exceptional circumstances.”
Aleos operate as charities but are in effect subject to council control or influence.
Because of this link, their governace is under heightened scrutiny by the public.
Previously Glasgow East Regeneration Agency and the Shetland Charitable Trust have fallen foul of the regulator for poor governance standards and a lack of independence from the local authority.
The report concludes: "We are satisfied that, overall, the charitable Aleos are operating well within their unique environment. We will continue to monitor them under our usual monitoring regime and ask that they consider the recommendations below."
