What MPs said about Charity Law – Your 2 Minute Guide

The Public Administration Select Committee has finally published its report following the inquiry in the Charities Act. It is a timely contribution, coming hot on the heels of a parliamentary report into the Cup Trust scandal earlier this week and a renewed public debate about lobbying.

Lawyers are likely to be analysing this report in detail in the weeks to come, but here is a quick summary of the key points for NCVO members.

Public benefit: Possibly the most significant part of the report. Whereas currently charities are required to demonstrate that they provide a public benefit, the report suggests that a presumption of public benefit should be re-instated. (Although this is slightly unclear, as the Upper Tribunal has clarified that there was never a presumption in the first place.) It also suggests a greater role for parliament in defining public benefit.

Charity Commission: the report recommends revising the Commission’s statutory objectives, to ensure it can focus on regulation. We agree that the Commission’s regulatory role must be its core focus. While greater clarity on this may be welcome, this must not be an excuse to curtail the Commission’s powers.

Registration threshold: the Committee does not propose raising the current threshold.

Charges: the Committee rejects the idea of introducing charges for registration or submission of annual accounts.

Penalties: the Committee supports Lord Hodgson’s proposal that the Charity Commission should introduce some form of penalty for late filing of accounts.

Payment of trustees: the Committee shares NCVO’s view that voluntary trusteeship is a key pillar of our sector, and that as a matter of principle trustees should not be paid.

Campaigning: we were a bit concerned about what the report would say here, especially considering the strong views expressed by some members of the Committee during the evidence sessions. While giving perhaps a little bit too much attention to those who think charity campaigning should be restricted, it is reassuring that the report recognises that the current rules on charity campaigning are fit for purpose and should not be tinkered with.

The report does put forward the recommendation that charities should publish their spending on campaigning and political activity, in a move towards greater transparency and accountability. We would not want to see any increased burden, but in fact many charities already make this information public in their annual report, because they recognise the importance of maintaining the public’s trust.

So overall, the Committee has managed to reach agreement on highly sensitive issues, where there were clear divides among members – and indeed there are differing views within the sector. But the report is another valuable addition to an important debate about charities and how they are regulated. One in which NCVO has been engaged for years and which we will be certainly driving forward.