Investigation as £11.5m fails to reach cancer charity

Two cancer charities that operate a national network of street collectors have had their assets frozen after an investigation found that only a 10th of the money raised had been used for benevolent purposes.

Investigators in England and Scotland have confirmed that Breast Cancer Research (Scotland) and Breast Cancer Relief, based in Manchester, used the same commercial fundraiser, the Scottish-based company Solutions RMC.

The Scottish Charities Office believes there had been "misconduct and mismanagement" at Breast Cancer Research (Scotland). Of the £13m raised since 1996, just £1.5m has been donated to the Glasgow-based charity. However, more than £5m of the income was paid to Solutions RMC, which had been closely involved in setting up the charity.

Yesterday, the Court of Session in Edinburgh ruled that Breast Cancer Research (Scotland) could no longer present itself as a charity. The Lord Advocate, Colin Boyd, told the court the organisation had been used as a vehicle by Tony Freeman, its fundraiser.

Mr Freeman and his company, Solutions RMC, had been paid about 60 per cent of the total income raised by way of commission. He had worked for the charity since 1997 and had raised money by selling lottery tickets to members of the public throughout Britain.

The trustees of Breast Cancer Research (Scotland), which had at least eight bank accounts, are John Cooper and Anne McGill from Ayrshire and Anthony Levinson from Salford near Manchester.

The Lord Advocate said that when the commission agreement with Mr Freeman was reached, in February 2001, Mr Cooper, Mrs McGill and a man called Stuart Mackie, from Bothwell, Lanarkshire, were employees of Solutions RMC. The existing trustees and Mr Freeman have been suspended.

A spokeswoman for Solutions RMC said: "We are aware there has been a petition lodged but we are not able to make any further comment at this time for legal reasons."

Last year, Breast Cancer Research (Scotland) pledged £5m to Dundee University to pay for research. However, only £500,000 has been given.

Meanwhile, a separate investigation in England by the Charity Commission yesterday led to the appointment of a receiver and manager to temporarily take over the running of another charity that had used Solutions RMC.

The commission has already frozen more than £1m in the bank account of Manchester-based Breast Cancer Relief. The watchdog says it has evidence that less than 10 per cent of the income received by the charity had been spent on its charitable work. Most of the balance appears to have been used to pay the costs of fundraising.

A spokeswoman for the commission said: "The fundraising activity is principally to recruit volunteers to sell competition tickets and operate street collections nationwide."