Blackmore Vale Magazine
CHARITIES and community groups could be in line for compensation payments of up to £50,000, thanks to an eagle-eyed accountant whose lobbying prompted a change in the law.
Malcolm Lofts of Dorset-based Lofts & Co, part of ClearSky Business, first raised concerns over inconsistencies around deposit protection rules in 2010.
He contacted the now defunct Financial Services Authority, but after “hitting a brick wall” decided to raise the issue with West Dorset MP and Cabinet Office minister Oliver Letwin.
Mr Letwin passed Malcolm’s concerns to the Treasury, eventually leading the new Financial Conduct Authority (FCA) to rewrite the rules.
The change means that large ‘unincorporated associations’ such as charities, clubs or societies that lost money in the Icelandic banking collapse of 2008 may now be entitled to compensation payouts from the FCA. Such groups were previously considered ineligible for help.
Also, many such organisations will have cover in future where none existed in the past. The changes apply to an estimated 5,000 associations and 24,000 partnerships.
Greg Clark, financial secretary to the Treasury, has thanked Malcolm for making the government aware of his concerns.
Malcolm said: “It’s fantastic to know that these changes could financially benefit many charity or community groups.
“I have worked with a number of charities and unincorporated organisations over the years, and was simply looking to redress an inconsistency in the rules regarding the Financial Services Compensation Scheme (FSCS).
“I had no idea that my letters and emails would eventually lead to such a major policy change by the government.
“I’m just pleased that the issue has finally been addressed. Hopefully lots of charities will be able to claim compensation as a result.”