Charities in crisis

We reported in our Kilsyth editon last year that a rift concerning the allocation of money for future grants had driven a wedge between the Lloyds TSB Foundation for Scotland and the Lloyds Banking Group.

One of the local organisations affected is Croy Miners' Welfare. Treasurer John Cullen is concerned that the true victims of the dispute will be the people who rely on charities for support.

He said: "It's very very worrying. Over the years we've had probably about 150,000 - that's meant that a lot of things that couldn't have been done have been. We've been able to upgrade the kitchen, run a bereavement group, fund the Historical Society and run the Croy Food Co-op. Without the funding from this organisation a lot of people would have been much worse off."

When the four independent Foundations were set-up in 1985, a covenant was agreed that one per cent of the group's annual pre-tax profits would be assigned to charitable causes throughout the UK.

The group attempted to re-negotiate during the recession and agreed a deal that only 0.5 per cent of profits would be paid to Foundations in England, Ireland and Wales. Their Scottish counterpart however refused to sign.

A bitter war of words has rumbled on over the past few months, culminating in a letter being sent to all charities supported by the Scottish Foundation, stating that the covenant has been terminated.

In the letter, foundation chief executive, Mary Craig explained: "Throughout discussions over the last year, the Banking Group has chosen to 'forget' a number of key facts – that the Foundation is an independent trust, not a corporate foundation that can be dictated to by the Banking Group; that the Foundation receives money from the Banking Group through a legal obligation and not by benevolent donation, and that the Foundation is here to serve the best interests of Scotland's communities, not to further the Banking Group's corporate objectives.

"So we are dismayed to learn that the Prime Minister's response to the No 10 petition, set up to gather support for the Foundation, takes the side of Lloyds Banking Group, seemingly without challenge or with any thought to what message this sends to charities. At no time has No 10 consulted the Foundation to test the veracity of the Banking Group's position."

Defiantly the letter concludes that the foundation intends to carry on "for the next 25 years and beyond" but acknowledges that it will now have to "target smaller and harder to fund charities."

John Cullen believes many voluntary organisations will now have to scale back any ambitious plans they have for the future.

He said: "It's a big blow. These organisations are helping millions of people throughout the country every year for nothing in return. Then on the other side they (Lloyds Banking Group) are walking away with millions of pounds in bonuses.

"We feel let down, it's really disappointing because now it's charities who are suffering and the people who depend on them who are the victims, no one else."