Select Committee on Public Accounts Minutes of Evidence

Examination of Witnesses (Questions 120-139)



  120. I am very happy to leave that there. I take it that you will inform me of the conclusions?
  (Mr Gillespie) Yes indeed. I do not think I gave you an absolute commitment to tell you within a particular time. We have not had the answers in and I have not been a position to answer your concerns.

  121. That is the absolutely fine. As long as it is followed up, I am very happy. Can I also pursue another issue and I am not sure which of you it is best to pursue this with, perhaps you can pick and choose among yourselves. Charitable status confers on any organisation very distinct benefits, one of which of course is their reduction in local taxation for any properties that they might hold. What investigations or what correlation do you have with the local authority revenue and benefits departments whereby you are notified by them of those organisations which are claiming council tax relief on the basis of their charitable status? Is that something which you do have correspondence with revenue and other departments on?
  (Mr Gillespie) We approach it from the other way round. Local authorities are aware obviously of the discount, for want of a better expression, that can be obtained by charities. The information on the registration details of charities is available on our web site. The vast majority of local authorities access the information on the web site to check out whether an organisation is legitimate or not, ie, whether it is registered. We have had a number of cases where councils have approached us to check the bona fides of particular organisations and we have responded to those on a case-by-case basis.

  122. One of the things that I have had specific cases of is groups claiming that the property is owned by the charity when in fact, on further investigation, the charity claims to know nothing about that property whatsoever. Given that on the returns submitted by companies to you I presume it is evident what assets those charities have, is there a way for local authorities to check off your web site about the properties?
  (Mr Gillespie) No, and I do not think that will be ever be the case, not in the foreseeable future, on a property-by-property basis because the requirements are for a statement of general assets rather than a listing of a register of assets to be disclosed. That information is available from each charity, it is legitimately able to be disclosed to local authorities and should be disclosed.

  123. The obvious problem is that somebody applies stating that they are a charity when in fact they may not be and local authorities can check it out on the web site and say, "This charity exists, therefore we will give them the charitable status", but on further investigation it can then be found to be wrong.
  (Mr Gillespie) This is an issue for the local authority. We provide baseline information which is available to them. It gives the address of the charity, for example, for them to contact.

  Mr Gardiner: I am not trying to bring you to book for the fraudulent practices of various property owners. What I am trying to suggest is perhaps there should be a way for local authorities and yourselves engaging more closely and co-operating more closely to avoid such instances.


  124. In answer to Mr Gardiner, Mr Stoker, who asked how else can a charity seek to close down except by approaching you, you said that that is not necessarily the only way. Are you going to do a note to us on that point? I did not quite understand your answer.
  (Mr Stoker) The point is that charities sometimes do have the power to wind up so that what happens is that they wind up under powers they have got and basically they tell us. So the path to winding up is not necessarily through coming through us and asking our permission to do so.

  Chairman: Thank you. Do you want to come back, Mr Gardiner?

  Mr Gardiner: I am sure the note will be full and very clear.

  Chairman: Mr Richard Bacon?

Mr Bacon

  125. Thank you, Chairman. Mr Stoker, when I first started looking at this I started off with that document and presumably when you first became boss of the Charity Commission you took that document, and did you not then treat it as a laundry list of things that should be a top priority to you?
  (Mr Stoker) I did yes.

  126. When you said you are a highly quantified organisation, my colleague was astonished that you have got these powers. I am not familiar with the debate that led to that but presumably the 1993 Charities Act did not come out of the blue, it presumably came out of a response to pressure for the Charity Commission to have more powers. The Act came in in 1993, you took over two years ago so you were aware of that Act, aware of the extra powers and aware of the document that said not only, as Mr Osborne pointed out at the beginning, that a lack of meeting existing targets shows a lack of management grip but there are specific references in here to the slow progress made in using the powers. Paragraph 55, the Commission's powers were only used in a small proportion of cases. I cannot find the exact quote, it is there somewhere. The point is that the need to use the enforcement powers that were available is clearly flagged up. I am puzzled given this was your laundry list and you are an extremely quantified organisation that it was not something that you picked up.
  (Mr Stoker) I think the question is why was it important to use those powers and the answer was to get better performance on investigations, so approaching that objective in the round, the way I did it was, first of all, to look at resources and there are substantial extra resources; to look at management, and we had a review and we changed the way that we managed it, and we put clear desk instructions in place that met the concerns that are referred to specifically.

  127. Desk instructions?
  (Mr Stoker) Desk instructions.

  128. What is a desk instruction?
  (Mr Stoker) This is a manual for investigations officers telling them what they have got to do at various points. It tells them how to select, how to manage, how to plan, how to close, how to follow-up investigations. On top of that there are substantial extra resources going in next year. There is the fact that in 2000-01 we did for the first time hit the targets of closing more investigations quickly, 75 per cent within 12 months, and we have also got, compared with 1996-97, a proportion of inquiries which are establishing causes for concern up from 76 per cent to 90 per cent. So that really was the outline of my response to the issue which I took to be the broad one of how do we get a better all round position on investigations.

  129. We have got here in paragraph 17: "We urge the Commission to show more drive in exploiting the opportunities to achieve greater effectiveness for which the 1993 legislation provides." Here four years later we have got in 2.15: "Given that weaknesses were substantiated in 191 inquiries in 2000-01 and that 53 took more than 12 months to resolve a more assertive use of powers might have been expected." You mention various reasons for not using the powers. It is not because of the management messages so you have obviously been putting out the stuff. But is not part of management doing more than putting out messages and ensuring follow through and that something is done?
  (Mr Stoker) That is why we have got the project that has been put in place to follow through the changes we put into the management of investigations to analyse what is actually happening to ensure that the changes that we have written into the new arrangements are being followed through and to understand better what is happening. I am not in any way reluctant to see greater use of these powers where they can actually solve problems and close down investigations.

  130. Can I raise another issue mentioned both in the report from four years ago and in this one, and that is the issue of trustees and selecting trustees and the scrutiny that goes on. The Committee of Public Accounts Report four years ago said that the Commission was not making full use of information on unsuitable trustees, this is paragraph 23 xi, and standard procedures were not in place to check prospective trustees of newly registering charities against the records of unsuitable trustees. Standard procedures were not in place. When you turn to this four years later you find in paragraph 3.11: "The ... Commission has not yet issued guidance on the subject"—that is of who should be suitable to act as trustees—"The Commission plans to do so once it has finished consulting on what information it should gather on individual trustees." Four years ago it was pointed out that you were not making full use of information on unsuitable trustees and standard procedures were not in place and four years later we are still waiting for guidance so people know what they should be looking for. I fully understand the point you made that the Commission expects charities themselves to operate checks and standards to ensure that all new appointees are suitable to act as trustees. Plainly you cannot do all of that yourselves, just like companies to some extent should be making sure they have got good directors. I fully understand that. Nonetheless they cannot do it as easily as they might be able to unless they have got some sort of standard guidance, and four years later you still have not issued any.
  (Mr Stoker) With respect, the first part of that question was about the arrangements that we had in place, standard procedures for ourselves in the Commission checking the position of trustees who were going to be appointed to newly registering charities. Is that correct?

  131. Just reading from here, this is Paragraph 3.11, "The Commission plans to do so"—that is issue guidance on the subject—"once it has finished consulting on what information it should gather on individual trustees ..."
  (Mr Stoker) That is about the appointment of trustees to existing charities.

  132. Whether it is an existing or a new one surely there is a suitable laundry list of people whose characteristics you would not want as trustees? You would not want murderers, thieves paedophiles. It would not take that long to draw up a laundry list.
  (Mr Stoker) There is a laundry list at the moment for existing charities. What we do accept is it is not brought together conveniently in a way which would be most useful to charities which are appointing trustees. With respect, the answer to the first part of your question is that the standard procedures for checking trustees who were to be appointed to newly registering charities, which the Committee criticised the Commission for not having in place in 1997, are now in place. One of the things that the NAO Report acknowledges is that there has been a good deal of advance on the rigour of the procedures that the Commission uses to scrutinise applicants for registration at the point of registration including trustee checks.

  133. Perhaps I could take up the question of case two for a minute. Mr Osborne raised this a minute ago. This talks about a case under investigation that ran for nearly three years without clear objectives and planning. You mentioned that you did not have clear risk assessment guidelines in place and I know you started your remarks at the beginning by saying you are putting more focus on risk. It also says in relation to case two: "The Commission apologises to the charity because it had not informed the charity that an inquiry had been opened." Whatever set of standard procedures one had in place would that not be a rather obvious one, to have to tell them that they were being investigated?
  (Mr Stoker) It might not always be appropriate if the knowledge that they were being investigated might lead them to do something which would get round the purpose for which they were being investigated.

  134. In this particular case you were relying exclusively on the word of the Chief Executive and did not meet with the trustees and other key stakeholders.
  (Mr Stoker) I am certainly not defending this as a well-handled case in this or in other respects.

  135. That is a relief. I wanted to ask you about training. It says in 2.11 that inquiries carried out by more experienced staff were generally better planned, better scoped and better carried out inquiries, and there is a need for closer supervision of less experienced staff. What training and supervision is in place right now in order to ensure that that experience is passed on?
  (Mr Stoker) There is extensive training. There has been training specifically carried out to introduce investigations staff to the new procedures to make sure they understand them and the need to implement them. There is also a good deal of on-the-job training which takes place in the management line between skilled investigators and less experienced investigators. Levels of experience are a factor taken specifically into account in instructions about how investigations are to be selected and allocated at different levels within the grading of the Department, and the Commission is, in fact, a very extensive and very committed training organisation. We have been reaccredited as an `Investor in People' for a further three years on the basis of what was supposed to be a 18-month mid-term assessment.

  136. How many staff have you got devoted to investigations?
  (Mr Stoker) I would need to check the number.

  137. Figure 5 on Page 13 says there are 51 based in London, Liverpool and Taunton. Is that 51 figure accurate?
  (Mr Stoker) That figure is out of date. The figure would be slightly higher and of course it will get higher again when the money from the 2000 Comprehensive Spending Review comes on stream in March next year.

  138. How much money do you have altogether?
  (Mr Stoker) £21 million.

  139. I thought I heard you say that and wrote that down. How many staff do you have altogether?
  (Mr Stoker) At the time of this report it was 547.

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