 House of Commons |
Session 2005 - 06 Publications on the internet Standing Committee Debates Charities Bill [Lords] |
Charities Bill [Lords] |
The Committee consisted of the following Members:Mrs E. Commander, Committee
Clerk † attended the
Committee Standing Committee AThursday 6 July 2006(Morning)[Mrs. Joan Humble in the Chair]Charities Bill [Lords]Clause 7The
Commission’s objectives, general functions and
duties 9
am Mr.
Andrew Turner (Isle of Wight) (Con): I beg to move
amendment No. 8, page 6, line 8, at end
insert ‘in particular by
reducing the administrative burden on
charities.’.
The
Chairman: With this it will be convenient to discuss the
following amendments: No. 66,
page 6, line 35, at end
insert— ‘(7) Giving
information or advice or making proposals to any member or members of
the public interested in registering a charity under subsection (3),
including advice not to
register.’. No.
75, in page 6, line 35, at end
insert— ‘(2A) The Charity
Commission’s first general function shall include a systematic
review of the public benefit test for existing
charities.’.
Mr.
Turner: Good morning, Mrs. Humble. It is a great pleasure
to meet once again under your chairmanship. Outside, the sky is grey,
and the sun has ceased to shine on our proceedings, but many of us will
be pleased that it is a little less humid than on Tuesday. I understand
that the M4 is shrouded in thunder—if one can be shrouded in
thunder—from Reading to Somerset, and we may have some of that
weather later today. However, none of it will be associated with the
proceedings of this Committee. I assure you of
that. One of the
Charity Commission’s objectives is defined in the Bill as
being “to
promote compliance by charity trustees with their legal obligations in
exercising control and management of the administration of their
charities.” However, there
is some evidence that, in trying to meet that objective, the commission
can—and, indeed, did, before it had that objective—act
with a heavy hand rather than a light touch. That is driving some
people away from volunteering as trustees or supporters of charities.
Accordingly, I propose amendment No. 8, which would insert the
following at the end of that compliance
objective: ‘in particular
by reducing the administrative burden on
charities.’ On
Tuesday, I mentioned my concern about the burden of registering as a
charity and demonstrating public benefit. Let me quote that elusive
piece of evidence that I could not find on Tuesday, but which is just
as relevant to this debate, I assure you, Mrs. Humble. It was
sent to my right hon. Friend the
Leader of the Opposition via a Conservative party website. It began,
“Dear David Cameron”. In fact, I recall that, on Tuesday,
I expressed some scepticism about whether the writer was a lifelong
Labour supporter, as he claimed. The fact that he addresses my right
hon. Friend as “David Cameron” rather than Mr
Cameron or
David—
Mr.
Turner: Or, indeed, Dave. The fact that the letter writer
did not do that indicates that he might not be an active Conservative
party member. He goes on to
say: “I am
E-mailing you to ask who is in the lead for the opposition on the
Charities Bill, currently at second
reading.” That is why I
have been passed this e-mail. It goes
on: “I should
say that I am myself no natural
conservative”— with
a small
“c”— “I
am a Christian socialist and a life-long
Labour”— capital
“L”— “voter.
However I have recently been press-ganged into being treasurer of my
local church.” That seems
very much akin to the process involved in becoming treasurer of a
Conservative association branch. Actually, I understand that that
problem is common to all political parties.
The e-mail goes
on: “Now that I
see the regulatory burden which is to be imposed by the Charities Bill,
and the Statement of Recommended Accounting Practice (SORP 2005)
imposed on charities by the Charity Commissioners, I can quite see why
no-one else was prepared to be church treasurer. The regulatory burden
which will be cast (by the well remunerated) onto the shoulders of the
unpaid in the voluntary sector is in my opinion costly, wrong and
oppressive. I would
like to interest someone from ‘your side’ in taking this
forward with the Gov’t. I would hope this could be done by
consensus, by raising the compliance thresholds to £500,000 a
year”. The Parliamentary
Secretary will be pleased to know that I do not go along with that
proposal exactly. The
e-mail
continues: “In
this way medium and large charities would be well regulated and
smallish charities would not be dragged into the regulatory regime by
inflation (the lower £100,000 threshold has been unchanged since
1993. I quite understand any desire of the Charity Commissioners to
extend the scope of that, but the desire to regulate should be balanced
by realism. Else the Charity Commissioners will suffocate the
volunteers on which small and middling charities
rely.)” That is a good
example of the feeling among many charity volunteers, but it is a new
example and, because it was sent only on 27 June, it was not put before
the Joint Committee. It was not debated in another place during either
of the Bill’s outings, but it clearly represents the feelings of
volunteers. There is
other evidence as well. Mr. Brough says that he is bringing the issue
to my attention for
the “sake of church
treasurers throughout the United Kingdom who may not, yet, realise what
regulatory burden is about to hit them. We are all unpaid, hard working
and hard-pressed. We do not need this additional
burden.”
Mrs. Humble, in case you have not
heard of SORP, I shall read out what it says about itself. It says that
it “provides guidance on
the application of accounting standards (compliance with which is
considered necessary, in all save exceptional circumstances, to meet
the legal requirement to give a true and fair view) in a manner which
takes account of the particular circumstances of charities. In all but
exceptional circumstances, charities preparing accruals accounts should
follow this SORP’s accounting recommendations to assist in
ensuring that their accounts give a true and fair
view.” Of course, none of
us is opposed to the reasonable and fair regulation of charities or to
proper accounting for the donations—one might almost say the
pennies of the poor—that go into charities. Indeed, in my view,
it is more important to take care of the pennies of the poor than of
the donations of the wealthy.
However, the quality of accounts
required by SORP appears to place an unnecessary burden on small
charities in particular. That is why I tabled the amendment. The
document from SORP grew from 68 pages and 240 paragraphs in 1995 to 89
pages in 2000; the 2005 version has 109 pages and 451 paragraphs. Its
size has increased by more than 50 per cent.
Another example provides the
same picture. It comes in a letter from Denise King, chief executive of
Girlguiding UK that I only received on 15 June. I quoted it earlier,
but shall quote it more fully on this occasion. It
says: “Recent
emphasis in Charity Commission publications on the responsibilities of
charity trustees and the prospective penalties for non-compliance are
unhelpful to a largely activity based organisation such as Girlguiding
UK, where...charity trusteeship is a very secondary consideration
to the role of the volunteer adult leader providing activities for
children...Unfortunately, there is some evidence that the
insistence on highlighting charity trusteeship is discouraging adult
volunteers, who...are averse to being threatened with the
consequences of failure in the capacity of charity
trustees.” That is not the
approach, certainly not the perception, that we wish to foster in the
minds of those who want to devote some of their time to volunteering,
whether through assistance to the young through the girl guides, to the
advancement of religion through the Church or to the elderly through
care homes and so on.
We understand why it has been
necessary through other legislation—through Criminal Records
Bureau checks, the Commission for Social Care Inspection and so
on—to improve standards in care homes, children’s homes,
youth volunteering organisations and so on. We understand all that, but
what I am talking about is driving people from supporting
charities. It is
essential that the Bill should bring forward small measures that
redress the balance, and my amendment would introduce one of them. It
might be described by the hon. Member for High Peak (Tom Levitt) as
meeting the Cheltenham principle. Like most of my amendments, this
amendment does far more than meet that. The Cheltenham principle, as I
understand it, is based on what is nice, but the amendment is
necessary.
Helen
Goodman (Bishop Auckland) (Lab): May I say what a pleasure
it is to serve under your chairmanship, Mrs. Humble?
Before I entered the House, I
worked in the voluntary sector for eight years. I worked in two very
different organisations. First, I worked in the Children’s
Society, which is a large, well functioning, well known
charity with a finance department, a fundraising
department and human resources experts. I then went on to run the
National Association of Toy and Leisure Libraries, which is a
membership organisation with a turnover of less than £1 million
a year. The association supports 1,000 projects across the country,
ranging from a large co-partnership between the voluntary sector and
the local authority in Manchester, which provides resources across the
whole city, to really tiny projects, such as one that I visited in the
local prison in Perth, where a woman provided play sessions twice a
week for the children of people visiting members of their
family. I have to say
that running the association was probably the most stressful work
experience that I have ever had; it was certainly far more stressful
than being a Member of Parliament or a Treasury civil servant. In large
part, that was because we lacked the resources to deal with the
regulatory burden, and it is important that the Committee take account
of the fact that small organisations lack that administrative
infrastructure. The
hon. Member for Isle of Wight (Mr. Turner) mentioned some aspects of
the regulatory burden, but there are others, such as health and safety
legislation, compliance with the fire officer’s requirements and
the full panoply of employment law. Of course, I am not saying that it
does not matter whether a building in which people work is safe from
fire or that small organisations should be excluded from the provisions
of employment legislation. What I am saying, however, is that we have
an opportunity in the Bill to minimise, rather than maximise, those
regulatory burdens.
Let me give an example of
something that happened to my organisation. We were a few days late
sending in our annual return, because one of the trustees’
addresses had changed. That triggered an automatic letter in the bowels
of the Charity Commission, but that letter did not come to me, telling
me that I was late; it went to the former trustees, telling them that I
was late and that our charitable status was likely to be taken away if
we did not comply straight away. It was as if the Revenue had written
to the employer of someone who had failed to get their income tax
return in on time to tell the employer that they should be sorting the
problem out. I am sure that the Minister’s meetings with the
commissioners are all very pleasant, but the bureaucracy at the
interface is sometimes rather heavy-handed. We must therefore ensure
that the administration of any new obligations that we introduce is
such that we minimise the contact between the voluntary sector and the
Charity Commission and ensure that it is absolutely
streamlined. I will not
spare the Minister’s blushes. One morning last weekend, the
Prime Minister was speaking about the Government’s work, and the
only colleague he mentioned was the Parliamentary Secretary, Cabinet
Office, my hon. Friend the Member for Doncaster, North (Edward
Miliband). The Prime Minister said how marvellous it was that we could
grow the voluntary sector under the benign view of the Minister and
strengthen the partnerships between the voluntary and the public
services.
9.15
am That aspiration
will come to nothing if we do not ensure that the small, local groups
and charities are not overburdened with administration and that we give
them a stable funding environment. I am not going to support the
Opposition’s amendment because we do not want to introduce a new
duty on the Charity Commission of that kind. As we go through the Bill,
we want to check that we are minimising the new obligations and that we
are putting them in place in a way that will not create a new
Byzantium. Peter
Bottomley (Worthing, West) (Con): The hon. Member for
Bishop Auckland (Helen Goodman) may be too young to have been working
for the Children’s Society when I was chairman of the executive
council in 1983-84. She and my hon. Friend the Member for Isle of Wight
are right to say that the obligations on people that volunteer to help
others can be overtaken by trying to understand their duties. In his
response, the Minister may want to include a calculation of the number
of hours that it would take all the trustees of all the charities to
read all the paragraphs that there are in the SORP
regulations. I have
been a trustee of various charities—some for a long time; others
for shorter periods—and I go through regular training and
retraining. Although I am probably one of the more experienced
trustees, there is always more to learn and there are matters that I do
not fully understand notwithstanding the benefit provided by the
charity commissioners’ annual report and its useful reproduction
of some of the cases that have been heard in the High Court, where
issues between trustees or between the Charity Commission and trustees
can be heard. My hon.
Friend’s amendment is sensible. I do not agree with what the
hon. Lady said—that it adds to the requirements on the Charity
Commission. It does not. It states that part of its aim should be
reducing unnecessary burdens.
I ask that another point go
through the Minister to the Charity Commission and to the Housing
Corporation. I am a trustee of the almshouses trust, which provides
accommodation to people with particular needs. Almost two years ago, we
were faced with a situation in which the Housing Corporation
requirement’s for the trust’s accounts was incompatible
with the way in which the Charity Commission required the accounts to
be produced. It took some time to get the Housing Corporation and the
Charity Commission to allow us to produce a set of consistent accounts,
rather than producing separate sets. In that case, there was probably
some misinterpretation by us, the Charity Commission and the Housing
Corporation. When
those in authority—whether they are in the Housing Corporation,
the Charity Commission or the Government—spot the fact that a
problem needs sorting out, they should bring it to the attention of
their governors. Those problems do arise, but when they are spotted, it
is a question of what action people take. When they spot issues that
cause unnecessary anguish, effort and expense to people that are
running causes for the public benefit—which is what charities
are—it ought to be built into the requirements of the Charity
Commission, let alone those of the Housing Corporation or Ministers,
that they do something about it.
I am not sure whether we will
hear the reasons for the other amendments that are grouped with that
one.
However, whether the amendment is carried or accepted by Government now
or at a later stage, I hope that its purpose is accepted.
I set this challenge to the
Minister. When the Bill is through, will he ask his advisers to sit
down with the Charity Commission to see whether they can reduce the
more than 400 paragraphs in the SORP requirements? That is only one of
the matters that charity trustees need to look at. We need to see
whether we can produce a simplified version that brings down what
trustees need to understand to 20 paragraphs—unless charities
are in certain categories of activity or size. What key things must
people do and what makes it possible to be a good enough trustee? For
anything else, they could go to appendices and the like. That change
would be well worth accepting.
Tom
Levitt (High Peak) (Lab): The amendment falls foul of the
Cheltenham principle of being harmless if not entirely necessary. Does
the hon. Gentleman not accept that the aim of the amendment to proposed
new section 1B is covered by proposed new section 1C(2)2, which says
that a general function of the commission will be to encourage and
facilitate “the better
administration of
charities”? It covers the
amendment’s objective
completely.
|
| |
| ©Parliamentary copyright 2006 | Prepared 7 July 2006 |