The Charity Commission has opened a statutory inquiry into My Space Housing Solutions, which featured in a BBC Panorama investigation this summer.
It opened a compliance case into the charity in July after the BBC uncovered property sales worth over £120m linked to developer Paul O’Rouke and that My Space Housing Solutions had been used to help inflate the price of properties.
The Commission carried out a books and records inspection in late August and found that, from April 2015, more than £1m of My Space Housing Solutions’ funds had been paid to nine people who were serving as the charity’s trustees at the time of the payments.
Its investigation has now escalated to a full statutory inquiry over concerns about potential conflicts of interest and possible mismanagement of funds.
The inquiry will consider the administration, governance and management of the charity. It will particularly look at whether there are any conflicts of interest and connected party transactions and whether the charity has suffered a financial loss as a result of any misconduct or mismanagement of funds.
Inaccuracies in statement will create ‘significant reputational damage’
My Space Housing Solutions told Civil Society News that the Commission’s statement contains some inaccuracies and that the board of trustees raised their concerns with the regulator on 7 October.
It wrote: “I’m writing to raise an objection to the wording of this statement. Specifically where clarity is not being provided that all payments were appropriately recorded within the charity’s accounts and were disclosed to the charity’s auditors appropriately and that the mismanagement relates purely to the fact that Commission approval was not obtained prior to making these payments as outlined within the charity’s governing document.
“The statement creates an impression of wrongdoing which was clearly not the case and it is the opinion of the trustees that this statement will create significant reputational damage not only to the trustees personally but also to the charity’s beneficiaries. This is due to the strong possibility that the media will pick up on this statement and publish a number of defamatory assumptions.”
A spokesperson for the charity argued that there was no malice in the payments and that these were fully disclosed within accounts filed to Companies House and the Commission. They added that “the mismanagement purely relates to poor governance in administrative functions”.
BBC findings
According to the regulator’s data, the charity’s total income increased to more than £26m in the financial year ending 31 October 2020, £20m more since 2016. The charity is 40 days late filing its latest accounts.
The BBC investigation revealed that in one case, a property deal involving O’Rourke and the charity saw the purchase and then lease of 10 flats in East Yorkshire for £800,000. On the same day the deal was done, the flats were sold to an investment company for almost £1.6m.
The BBC said that the price leap was a “by-product of Enabling Homes’ relationship with the housing charity”, as the charity signed a 20-year lease for the flats after it initially completed the purchase.
My Space Housing Solutions supports vulnerable adults who are unable to secure tenancies by providing them with accommodations. The deal meant that the new owner of the flats could benefit from guaranteed income provided by housing benefit and other support mechanisms.
Evidence uncovered by Panorama suggested that companies associated with O’Rourke have purchased and then sold over 100 properties that were then leased by the charity.
It also found that 47 charity tenants died between 2018 and 2010, a time when the number of tenants on the charity’s books increased sharply.
