Charity Commission finds conflict of interest at former Hackney Speaker’s charity

Michael Desmond, photo credit Gary Manhine

Michael Desmond, photo credit Gary Manhine - Credit: Archant

Former Speaker Michael Desmond has taken a step back from the charity he founded after the Charity Commission found a conflict of interest with his involvement.

The Charities Commission advised trustees of House the Homeless in an operational compliance report they should not leave “all transactions and charity business in the hands of one individual”.

Since the body which regulates charities got involved, the charitable trust founded by Cllr Desmond no longer places homeless people into properties owned by him or refers them onto his estate agency On The House.

The Commission’s report details how Cllr Desmond’s application to register House the Homeless as a charity in 2010 was refused, as the commission considered its objectives “were not exclusively charitable for the public benefit, as it was set up to help landlords find tenants”.

It was accepted as an unregistered charity by HMRC in 2012 after it amended its objectives to relieve poverty by helping house homeless people.

The Commission took a regulatory interest in the charity in March after the Gazette flagged up Cllr Desmond’s significant role in setting up and apparent control of the charity, following allegations his involvement benefitted his private business interests.

Cllr Desmond, who was elected for the honorary year-long post of Speaker last May, was listed as one of the charity’s trustees on its website until the Gazette contacted him last year.

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No one is employed by the charity, Cllr Desmond’s mobile number was listed as the only point of contact as the “volunteer co-ordinator” on the charity’s website, and HMRC documents named him as the person registered to handle money for the charity.

The Commission’s report stated: “The trustees now fully appreciate that they have responsibility for managing all the volunteers including the founder.

“Some trustees appeared to have little experience of running a charity or knowledge of charity law, and were unaware of the personal risks associated with being trustee of an unincorporated charity.

“They had not fully appreciated the conflict of interest in relation to the founder’s previous involvement with the charity.

“The trustees accepted this had led to external criticism and they had now taken steps to manage that conflict.”

The Charities Act 2011 states trustees are responsible for managing their charities and accounting to the public through annual returns, accounts and reports.

The charity has now moved out of the premises owned by Cllr Desmond to another office, and is going to change its name to focus on its new objective, moving away from housing the homeless into the realm of advice.

Trustees must report back to the commission in March, setting out action taken to improve their knowledge of running a charity and charity law.

Cllr Desmond said: “I don’t accept there was a conflict of interest, it was totally transparent, there was nothing improper at all.

“All in all I’m very proud to have started the charity, in the past year helping 20 homeless people to get accommodation, and since I stood down as a co-ordinator I’m working as a volunteer providing advice.

“There is no shortage of homeless people but there is a huge shortage of properties and the idea of the charity was to persuade other landlords to help other people in the same way we did.

“A lot of people unfortunately are victims of domestic violence, some are out of prison, I’m still proud of the work we did, my company will continue to help people in social need, and knowing ethics and morals I don’t think I did anything wrong.”