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Royal Albert Hall admits to an “inherent but authorised conflict of interest” in Charity Commission dispute

By | Published on Friday 13 July 2018

Royal Albert Hall

The Charity Commission has confirmed that it has re-applied to the Attorney General for permission to refer the Royal Albert Hall to the Charity Tribunal over its concerns regarding the way the charitable organisation that runs the London venue is governed. It follows an admission by said charitable organisation that under its current governance structure trustees could run affairs for their own financial benefit.

The Charity Commission first referred the Albert Hall to the Charity Tribunal – technically the First-Tier Tribunal (General Regulatory Chamber) – back in January. But that action requires the backing of the UK government’s Attorney General, which was Jeremy Wright at the time. He withdrew his consent in March when the Albert Hall threatened to take his previous decision on the matter to judicial review.

This dispute all relates to how the London venue was funded when it was built in 1860. In something like a nineteenth century Kickstarter campaign, members of the public who significantly contributed to the building of the hall were granted ownership of seats within it. Those seats could be passed down to future generations or sold off to the highest bidder.

About a quarter of the venue’s 5000 seats are still owned in this way. The owners of these seats can sell on tickets linked to them, and in the age of the secondary ticketing market doing so has become much more lucrative for those who choose to proactively put their allocated tickets up for sale.

The Charity Commission’s issue isn’t with this system in general, it’s with the fact that nineteen of the Royal Albert Hall charity’s trustees are also seat owners who have rights to tickets that they can sell on for profit. These seat owners hold a majority on the Hall’s governing council and that, the charity regulator reckons, is “an inherent unresolvable conflict of interest”.

The Royal Albert Hall charity actually conceded that a conflict of interest existed in papers issued ahead of its AGM in May. However, according to charity trade mag Third Sector, said papers insisted that this “conflict is built into the constitution of the hall, which is laid out in acts of Parliament and royal charters, and has always been properly dealt with by the trustees”. That meant, the charity concluded, that there was no need to reform its constitution in the way the Charity Commission has demanded.

At the time Richard Lyttelton, a former president of the Hall who has been campaigning for the charity’s constitution to be reformed, said that this concession was significant, because the Hall had never before accepted that a conflict of interest existed. He told Third Sector: “It has always claimed that the rights of seat-holders derive from property ownership and not the charity, and so are unrelated”.

He went on: “This is narrowly true, but there is no denying the fact that the way the Hall is programmed and the access members have to their seats directly influences the value of these rights. Given that council members and related parties own seats to a value of £25 million, the conflict is now apparent to everyone, and council’s initial position has become indefensible. Clearly, commercial investors should not be governing a charity that can influence the value of their investment”.

According to The Times, in a new notice to its members, the Albert Hall’s Vice President Ian McCulloch talks about an “inherent but authorised conflict of interest”.

Responding to the Charity Commission’s continued bid to force reform of its constitution, McCulloch points to the Hall’s ‘conflicts of interest committee’. He then argues that, although seatholder members of the ruling council could in theory run the venue for their own benefit, “there is no evidence that the seatholder members of the council try to manipulate the affairs of the hall for their private gain”.

Concluding, he states that the venue is “run wholly for the public good in accordance with charity law. There has been no failure by the Hall as a charity and no impropriety”.

Following this week’s shenanigans in government, former Attorney General Wright has shifted over to a new job where he gets to bother himself about cultural matters on a full time basis, as Secretary Of State For Digital, Culture, Media And Sport. Which means new AG Geoffrey Cox will now have to decide whether to back the Charity Commission in its new bid to take the Royal Albert Hall’s governance issues to tribunal.