TRUSTEE BILL [HL]
Memorandum by the Lord Chancellor's Department
INTRODUCTION AND SCOPE
1. This memorandum identifies the provisions
of the Bill which give powers for delegated legislation, and explains
in each case the purpose of the power, the reason why the matter
is to be left to delegated legislation, and the nature of and
reason for the procedure selected.
Clause 11(3)(d): Power to prescribe functions, by order made by statutory instrument. Negative resolution.
2. It would not be appropriate to extend to charity
trustees the wide range of delegable powers that are to be extended
to other trustees. The concept of 'charitable purposes' has been
very widely interpreted by the courts, and certainly goes wider
than the particular objects for which the charitable trust exists,
and it is thus not appropriate to define charity trustees' powers
of delegation in the wide terms used for other trusts, by reference
to the notion of non-distributive functions. The need to restrict
the powers of delegation to some sub-set of those being granted
to other trustees makes it necessary to distinguish between the
core functions which should be performed personally by the trustees
and those which should be delegable. It is therefore thought best
to limit on the face of the Bill the functions which charitable
trustees can delegate. The list of those functions is contained
in clause 11(3)(a)-(c).
3. The Charity Commission has power to extend
dealings with charity property beyond the powers which would otherwise
be available to the trustees, and that power can be used, on a
case by case basis, inter alia, to extend powers of delegation.
However, if it were to be found over time, for instance by the
number of occasions on which the Charity Commission was invited
to extend the powers in particular cases, that the list on the
face of the Bill of those matters which charitable trustees ought
to be able to delegate proved to be too restrictive, a power to
add functions would be desirable. Given the limited nature of
the power and the fact that its exercise would arise only after
consultation, it is submitted that negative resolution procedure
would be appropriate (clause 11(5)).
Clause 30: Power to make regulations to enable the remuneration of the trustees of charitable trusts. Negative resolution.
4. It has long been accepted policy that charity
trustees should not be able to charge for their services to the
charity unless the constitution or the Charity Commission allows
it. There is a sharp division between those who agree with this
position and those who believe that there is no justification
for distinguishing between the professional trustees of charities
and of other trusts. There will need to be further consultation
to settle the matter of whether, and if so, to what extent it
would be appropriate to remunerate charitable trustees, and the
Charity Commission has this in hand at present. Clause 30 would
have no effect in advance of the resolution of that consultation.
It is likely that the regulations under clause 30 would look very
much like those in clause 29, but given that they would not be
made without detailed consultation with all the interested parties,
it is submitted that the negative resolution process would be
Clause 41: Power to amend other Acts, by order made by statutory instrument. Negative resolution.
5. This clause makes provision for a "Henry
VIII" power. Subsection (1) gives a Minister of the Crown
power to make such amendments to any Act, including an Act extending
to places outside England and Wales, as appear to him to be appropriate
in consequence of or in connection with Part II or Part III. The
reason for the extension of the power to Acts which operate beyond
England and Wales is that, where a provision has UK-wide application,
it may be anomalous to amend it in relation to England and Wales
but not otherwise.
6. Subsection 2 provides that, before exercising
the power in subsection 1 in relation to any local, personal or
private Act, the Minister must consult any person who appears
to him to be affected by any proposed amendment.
7. Subsection (3) provides that an order under
section 41 may (a) contain such transitional provisions and savings
as the Minister thinks fit and (b) may make different provisions
for different purposes.
8. Subsection (4) make statutory instruments
made under this section subject to negative resolution procedure
in accordance with section 5(1) of the Statutory Instruments Act
9. Schedule 2 to the Bill contains a number of
consequential amendments to enactments arising, principally, from
the supersession of a power to invest defined in terms of the
Trustee Investments Act 1961 by the application of the general
power of investment and/or the power to invest in land granted
by Parts II and III of the Bill. Over many years, the statutory
investment powers of many organisations which are not trusts have
nonetheless been defined in terms of the default powers contained
in the 1961 Act. Many of those are thought to be governed by local,
personal or private Acts and so not all of them are amenable to
identification by the usual methods such as LEXIS searches.
10. The purpose of clause 41 is to allow those
whose investment powers are governed by the 1961 Act but who would
wish to take advantage of the new powers granted by this Bill
to apply to the Minister to be enabled to do so by the amendment
of their governing statute. The Minister will be required to consult
anyone who seems to him to be likely to be affected by the proposed
amendment of a local, personal or private Act.
11. Given the requirement for the Minister to
consult in the case of proposed amendment to local, personal or
private Acts, and the fact that the powers to be granted under
the new provisions by such an amendment are deregulatory, it is
submitted that the negative resolution procedure is appropriate.
Clause 42: Commencement: No Parliamentary control.
12. Clause 42(2) gives the Lord Chancellor power
by order to appoint a day for bringing the Act into force and
provides for different days to be appointed for different purposes.
Clause 42(3) provides for an order made under clause 42(2) to
contain such transitional provisions and savings as the Lord Chancellor
considers appropriate. This allows a degree of flexibility in
the implementation of the Act, so that, for example, solicitors
and others who act as professional trustees or who provide advice
to lay trustees may make appropriate arrangements with others
associated with the trust.
13. There are no amended powers in the Bill.