Despite over two years of consultation, the Charities Bill still contains a number of major deficiencies which DSC believes will harm the independence of charities and trustee boards. With the bill due for report stage and third reading on Tuesday 26th of January, there is one last opportunity for MPs to properly scrutinise its various clauses. We have been working with our partners in the sector, including ACEVO, ACF, Bond, BWB, CFG, and NCVO to keep MPs and all stakeholders briefed on the bill (read our briefing) and here we suggest questions that MPs should ask to the government at report stage, to get their answers on record.
Clause 1 – Official warnings by the Charity Commission
This clause would allow the regulator to issue a statutory warning against a charity without notice or recourse to appeal.
- In the event that a charity is given a statutory warning by the Commission, and the basis for that warning is subsequently shown to be unfounded or inaccurate, and the warning results in negative publicity or reputational damage to the charity, what recourse is available for the charity? If the warning is withdrawn or varied, how will that remedy any reputational damage for the charity?
- Does the Minister accept that far from being a case of charities dodging accountability, concerns that charities may be ‘named and shamed’ with this power with no recourse to appeal are legitimate and that the Charity Commission should have an open and fair process for charities to appeal warnings?
- Can the Minister clarify the Government’s intentions regarding Clause 1, including for example that the warning power should not be used as a tool to ‘blacklist’ charities that campaign on controversial issues, and that the new power is a low-level device intended only for matters that do not warrant a more serious enquiry?
- Can the Minister clarify that the Government does not intend the unaccountable official warning power to replace statutory inquiries which are open to appeal by charities? How will the use of this new power be monitored in future?
- Can the Minister assure the House that official warnings will only be published when genuinely in the public interest to do so? Given that there is no right to appeal these warnings, does he agree that there should be a presumption against publishing a warning unless there is a compelling reason?
Clause 9 – Automatic disqualification from being a charity trustee
This clause expands the list of criminal offences which result in automatic disqualification of trustees, and extends the disqualification to include serving senior management.
- What assessment has the Government made of the number of currently serving charity trustees who will become disqualified when this Bill becomes law, as a result of the expanded list of disqualifying offences, and what data is any assessment based upon?
- What assessment has the Government made of the number of charities that will need to fill vacancies on their trustee boards as a result of disqualifications under Clause 9, and what data is any assessment based upon?
- Given that the impact on the governance of those charities may be a) significant and b) not related to any current case involving any trustee or the charity they serve, what assistance will the Government provide to help fill those vacancies it has created by changing the law?
- What additional resources will the Charity Commission devote to the waiver process for disqualified trustees, given the likely additional workload? How will the Commission’s performance on granting waivers be monitored? How will the Commission be held to account for providing a fit and proper process for assessing waiver requests?
- What assessment has the Government made of the risk of legal action by individuals whose employment rights have been curtailed as a result of clause 9 of the Bill?
- Why has the Government not taken on board the recommendation of the Joint Committee on the Draft Protection of Charities Bill that ‘the Cabinet Office should examine the model of the Financial Conduct Authority’s fitness and propriety test to design a regime which is human rights and employment rights compliant’ with respect to this clause?
- Does the Government believe that voluntary trustees of hundreds of thousands of mostly small charities must be subject to restrictions on their employment rights which arguably exceed those for people working in the financial services industry?
Clause 10 – Discretionary power to disqualify from being a charity trustee
This clause would enable the Commission to disqualify a trustee who has not been found guilty of a crime, but who the Commission deems to be ‘unfit’ or to have engaged in activities which could ‘damage public trust and confidence’.
- What are the criteria upon which ‘unfitness’ will be determined under this clause?
- What are the criteria upon which ‘damaging public trust and confidence in charity’ will be determined under this clause?
- Can the Minister clarify what he considers the evidence base would be to determine whether someone is damaging public trust and confidence in charity? What assurances can he give that this will not merely be decided by headlines in the newspapers?
- What are the criteria upon which ‘public interest’ will be determined under this clause?
- In his ‘Unshackling Good Neighbours’ review, the Lord Hodgson reviewed a great deal of evidence and came up with a number of recommendations to reduce ‘the burden of red tape’ on charities and volunteers. Would the Minister admit that many of the clauses in this Bill are against the deregulatory spirit of that review and in fact greatly increase regulatory barriers and red tape for charities and charity trustees?
- Does the Minister accept that Clauses 1, 9 and 10 in particular significantly impinge on the independence of charities and charity trustees? Is it the intention of this Bill that the Charity Commission will have more direct control over the decision-making of charity trustee boards?