The Royal Albert Hall will defy demands by the charity regulator to overhaul its ruling council, which is dominated by the owners of debenture seats and boxes.
Musicians, concert promoters and charities have criticised the venue for allowing seat owners to use ticket resale websites to cash in on popular shows and fundraising events.
The Charity Commission has threatened to open a statutory inquiry into the trust that runs the hall after concerns of an “inherent unresolvable conflict of interest” caused by the majority of its ruling council owning seats.
Ian McCulloch, the head of an internal review of the trust’s constitution, told The Times yesterday that it would recommend reducing the number of seat owners on the council while ensuring that they remain a majority.
The decision infuriated the regulator. It said that it was “minded” to prevent the trust paying for parliamentary lawyers to draw up a revised constitution, which originates in a royal charter, so that it could be voted on at the AGM in May.
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Mr McCulloch said that the review had recommended reducing the number of elected seat holders from 18 to 15 while keeping the number of independent appointed members at five.
He said: “You must not overlook the enormous contributions that seat holders make . . . which far outweigh any potential conflict of interest.”
Mr McCulloch said that the Charity Commission accepted that the seat owners were entitled to sell tickets in any way they wanted but was concerned about the impact on the “perception and reputation of the charity”.
The hall has come under intense scrutiny after it was revealed that a minority of seat owners, including members of the ruling council, were selling tickets to events on resale websites at vast mark-ups rather than returning them to the box office. Tickets to the Last Night of the Proms this year are already being offered for more than £1,500 despite not having gone on sale.
Earl Spencer, brother of Diana, Princess of Wales, said that tickets for a charity concert in March for a box that he owns had been sold through a resale website because a member of staff had “failed to understand” his instruction to sell the tickets through the hall’s official system.
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The 350 members entitled to vote in elections for the council own almost a quarter of the hall’s 5,272 seats.
The review’s recommendations mirror the opinions of Jon Moynihan, the council’s president, who was elected on a manifesto that pledged to fight the Charity Commission’s “political correctness”. The flamboyant joint principal of the Ipex Capital venture fund told seat owners: “I hope you share my view that disenfranchising seat holders, as the Charity Commission have proposed, would undermine much of what we have achieved together for the charity, and would precipitate a long-term decline in the hall’s fortunes.”
Under the royal charter created when the Royal Albert Hall was built in the 1860s, individuals who helped to finance its construction were rewarded with seats that could be handed down generations or sold like property.
William Shawcross, chairman of the Charity Commission, said this month that the “scale of commercialisation in private sales of seats raises questions about whether the charity is in fact operating in the public interest”.
A spokeswoman for the regulator said yesterday: “The commission has made clear that the issue of conflicts of interest and the independence of the council from the seat owners should be dealt with as part of this [Mr McCulloch’s] review.”
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Richard Lyttelton, who alerted the Charity Commission to his concerns about the legality of governance of the hall while he was its president, writes in The Times, left, that “the greatest of 19th century ideals have been tarnished by 21st century selfishness”.
He has accused the hall of breaching charity law by failing to reveal the value of the seats owned by the council members and the income received from the sale of tickets.
Mr Lyttelton, who was president for a year in 2010-11, has calculated that members of the council own 145 seats worth conservatively £14.5 million.
The headline of this article was amended on 22 November to reflect that fact that members of the Royal Albert Hall "sell" rather than "resell" their tickets for events
