Charity Commission says it should be relieved of its 'onerous obligation' to issue public benefit guidance

In response to a Public Administration Select Committee report, the regulator says changes brought about by the Charities Act 2006 have 'created considerable additional work'

Charity Commission
Charity Commission

The Charity Commission has suggested that parliament could relieve it of its "onerous obligation" to issue public benefit guidance.

The commission was responding to the report by the Public Administration Select Committee into the work of the regulator, which was published in June.

The report argued that the Charities Act 2006 was "critically flawed" on the question of public benefit and that it should be revisited by parliament.

In its response to the committee’s report, published on the PASC website yesterday, the commission says that the public benefit changes introduced by the 2006 act "created considerable additional work for the commission".

"The most onerous obligation, highlighted as such by both your committee and the government, is the statutory obligation imposed on the commission to issue public benefit guidance," the regulator says.

The commission says that there have now been two Upper Tribunal cases that have significantly clarified the law of public benefit following the act and the commission has reissued revised public benefit guidance reflecting the judgments.

"In the light of such developments in the law of public benefit, parliament may wish to give consideration in due course to the removal of this statutory, and resource-intensive, obligation placed upon the commission."

The commission does not say to whom the responsibility should be passed.

PASC had recommended in its report in June that the commission should prioritise the investigation of sham charities and work more closely with HM Revenue & Customs. The commission says in its response that, following an external review, it planned to make a "series of changes" that would help it to identity abuse.

"Although some of the projects require policy and IT development that will take time to deliver results, there are mechanisms that will deliver better information in 2014," it says.

The commission also agrees to take forward the PASC’s recommendation for charities to disclose how much money they receive from government sources in their annual returns. In its response, the commission says that from 2015 it will consider requiring charities to declare how much of their income comes from public or government sources and how much was received in private donations in their annual returns.

PASC had rejected Lord Hodgson’s recommendation that the commission introduce a charge to help it cover its administration costs. But in its response today, the commission argues that "it does not rule out contributions from charities" and it was keen to discuss a range of ways its work could be funded.

The commission also says it supports proposals to fine charities for the late filing of their accounts and that it is working with the Cabinet Office to develop a suitable system.

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