The Directory of Social Change has warned that the passing of the charities bill by MPs marks "the arrival of the big brother society" for the voluntary sector.
The Charities (Protection and Social Investment) Bill, which once enacted will give the Charity Commission the power to issue official warnings and disqualify those with convictions for money laundering, terrorism or sexual offences from being trustees or senior managers at charities, had its third and final reading in the House of Commons on Tuesday.
Labour had tried to add several amendments to the bill, including provisions to protect the right of charities to campaign, to give charities the right to remain anonymous when receiving warnings and to appeal to the charity tribunal against them, but none were successful.
Jay Kennedy, director of policy and research at the DSC, told Third Sector it was extremely disappointing that only amendments tabled by the government had been taken up, and described the process as "nonsultation".
He said: "We’ve had two years of consultation, discussion and evidence, yet almost nothing in this bill has changed.
"At stage after stage, the government has refused to seriously consider legitimate concerns."
He said he had particular concerns that the bill would allow the commission to disqualify a person from being a trustee if it judged any of their past or continuing behaviour was likely to damage public trust and confidence in charities.
He described the relevant clause as "awful law" and said it would give "far too much power" to the commission.
Speaking at a Westminster Social Policy Forum event in London this morning, he said: "We are sleepwalking through a tectonic shift in power between the state and civil society.
"We are increasingly seeing a big brother approach to how civil society organisations are governed, with excessive and unwarranted interference from regulators and politicians. The passage of this bill will herald the arrival of the big brother society."
But Kennedy joined representatives from other sector bodies in welcoming the assurances given by Rob Wilson, the Minister for Civil Society, that the commission’s proposed new power to issue warnings could not be used to direct charities, and that the regulator would publish guidance saying warnings would normally be issued only after a 14-day notice period.
Sarah Atkinson, director of policy and communications at the Charity Commission, who was also speaking at the WSPF event in London this morning, said the disqualification power would be used proportionately and the regulator would consult the sector on its approach before the measure came into force.
She said the proposed power to issue warnings would enable the commission to take a more proportionate approach to low-level misconduct and mismanagement.
She said the measure was "good news for charities" and appropriate safeguards would be in place.
Asheem Singh, director of public policy at the sector leaders body Acevo, said in a statement that the outcome of the debate in the House of Commons yesterday had left the commission "with a great deal of latitude to affect the reputation of a charity, without first granting the charity a private appeal".
He said: "This puts the onus on the commission to exercise this power with reference to properly promulgated guidance, and we expect a full consultation with the wider sector will follow."
Chris Walker, senior external relations officer at the National Council for Voluntary Organisations, said: "The passage of the bill shows the value of extensive pre-legislative scrutiny and engagement with the sector.
"While we still have concerns over the extent of powers to issue warnings and disqualify trustees, the minister’s assurances on how these powers are intended to be used are welcome.
"We look forward to working with the Charity Commission on guidance to ensure that these new powers are used effectively."
Sir Edward Garnier, the Conservative MP for Harborough, Oadby and Wigston, who is a patron of the charity for convicts Unlock and a trustee of the Prison Reform Trust, also tabled an amendment that would have required the government to review how many people would be affected by the new disqualification powers.
The amendment was not added, but Wilson said the new powers would not be enforced until 12 months after the law was enacted, to give affected charities time to react.
Juliet Lyon, director of the Prison Reform Trust, said the charity was grateful to Garnier for obtaining the assurances, because charities that worked with people with criminal records often employed former offenders as trustees or senior managers.
"We hope the government and the Charity Commission will now work closely with the Prison Reform Trust, Unlock, Clinks and other charities to mitigate any negative impact on the effective rehabilitation of people with convictions," she said.