Charity watchdog to investigate Sick Kids' fundraising crisis

SCOTLAND'S charity watchdog has been called in to investigate the affairs of the crisis-hit children's charity behind a botched campaign to raise £15 million for a new hospital.

The Office of the Scottish Charity Regulator (OSCR) is to investigate claims 500,000 was spent on a high-profile fundraising drive for Edinburgh's Royal Hospital for Sick Children, which generated only 60,000.

The move emerged the day after it was revealed the director of the campaign had been suspended and its figurehead forced to quit.

The charity's trustees asked for OSCR to become involved after conversations with NHS Lothian, which runs the hospital.

The charity revealed that it had approached OSCR directly and was prepared to offer full co-operation with any inquiry. It has also commissioned its own independent report into the running of the campaign – known as "New Pyjamas" – by the charity's trustees. The campaign was launched last February to pay for a host of extra facilities at the replacement for the Sick Kids hospital, due to open in early 2013.

There is mounting speculation NHS Lothian is preparing to take over the running of the charity, amid concerns it has lost control of the New Pyjamas campaign, which hired ten staff on two-year contracts.

Meanwhile, sources at the charity denied a report that campaign director Elaine McGonigle had been suspended after she warned a potential major donor of planned changes to the way the foundation was run.

However, they confirmed NHS Lothian had been making moves behind the scenes to take more control over the charity, amid concerns it was enjoying too much independence in the run-up to the creation of the new hospital.

A spokesman for the charity said: "The trustees have immediately initiated dialogue with OSCR and intend to freely share information with them.

"In that connection, the trustees have instructed a leading independent law firm to undertake a full investigation into the running of the New Pyjamas campaign and provide a full report to OSCR. The trustees will accept and address any observations and recommendations that this report might make."

Lothians MSP and former GP Ian McKee said he had been assured by health secretary Nicola Sturgeon that OSCR was already looking into the problems with the Sick Kids charity. "A lot of serious issues have come to light in the last couple of days and it is only right that a proper investigation is carried out," he said.

Lothians Labour MSP Lord Foulkes, a key backer of the campaign, said: "The campaign does not just appear to have been at arm's length from the hospital, it seems to have been detached completely. I do think it would be for the best if it was to come under the control of the health board."

NHS Lothian chairman Charles Winstanley said: "We met with representatives from the Sick Kids Friends Foundation and had a very useful discussion.

"(They] assured us that they are working through the issues they need to address and we welcome their independent review and their engagement with OSCR."

OSCR said it would not comment on any investigation.