The Charity Commission has told Age UK that participation in the energy market poses “a significant risk”, and that it should look at whether continued involvement is in the charity’s best interest.

In a case report following concerns raised over the charity’s relationship with E.ON, the Commission warned that participation “in the energy market poses significant risks to a charity, and says Age UK should consider whether continued involvement is in the charity’s best interests”.

The regulator published its conclusions on the case report, which followed concerns centred on the allegations that the charity “was receiving a significant sum of money to promote a particular tariff more expensive than others available”. It recommended that Age UK conduct a governance review.

The Commission found that the trustees had processes in place for reviewing the suitability of products prior to selection. However, it said: “It was not clear that Age UK, having complied with its processes, sufficiently considered the risks of targeting beneficiaries with a commercial product in an area where the charity also campaigns on behalf of its beneficiaries.”

It also said that the “nature of the commercial partnerships across the range of services, and the fee or commission received by the charity through the trading subsidiary, was not made clear to customers”. The Commission recommended that Age UK clearly identifies any commission or fee received by the charity on all Age UK branded products.

Recommendations

It also made further recommendations to the charity, which included that Age UK conduct a governance process review which would look at the policies and procedures around trading subsidiaries and their use of the charity brand.

It also recommended that future commercial arrangements offer “sufficiently robust measures”, and that the charity reviews all online material to ensure that the basis on which products are supported and endorsed are clear.

Age UK suspended its E.ON energy tariff following a Sun investigation which claimed the charity led supporters to overpay for gas and electricity.

Energy regulator Ofgem has today said that, having looked into the allegations, there is no case to open an investigation. But, it said it has written to all suppliers to remind them that relationships with charities and other trusted organisations "requires appropriate oversight".

David Holdsworth, chief operating officer at the Charity Commission, said: “Working with a company may bring many benefits for a charity including raising funds and increasing awareness of the cause. However a charity’s name and reputation are valuable assets which trustees must protect.

“Participation in the energy market poses significant risks and Age UK should consider whether continued involvement is in the charity’s best interests. Although the charity had oversight mechanisms, the Commission found these were insufficient and needed to be kept under more regular review. Any fee or commission that the charity receives through these arrangements must be clear and transparent.

“The Commission is pleased that the charity has already taken some steps to address our concerns and we have made a number of further recommendations. The support offered by Age UK is invaluable to many.”

Age UK responds

A spokeswoman for Age UK said: “We welcome the Charity Commission’s report about Age UK’s trading activities and Ofgem’s report also published today.
 
“We are especially pleased that, with respect to the Age UK energy tariff, Ofgem has found no breach of the regulations, and that the Commission has addressed the misconceptions about pricing and has acknowledged that the tariff had regard to the particular needs of older people.
‎
“'We accept we can never be too transparent and our trading arm needs a sharper demarcation from the Age UK charity.
 
“We want every customer of our trading arm to know who they have bought from, that any surplus is then gifted to our charity, and how this then benefits older people in need. We will be making some changes so this is always crystal clear.
 
“We are glad that the benefits commercial partnerships can bring to charities and those they support have been recognised by the Charity Commission and we hope the changes we will be making in response to this report will help other charities too.”
.