Editorial: There are dangers in giving the Charity Commission extra powers on disqualified trustees

The government now appears to be backing the commission's bid for a new measure to prevent disqualifed trustees from holding senior jobs in charities, says Stephen Cook

Stephen Cook
Stephen Cook

The Charity Commission is in an uncompromising mood as it seeks to establish its credentials as a robust regulator, and one of its frustrations over the draft Protection of Charities Bill is that it does not at present include a power for the commission to prevent people it disqualifies as charity trustees from holding other positions of responsibility in charities. No doubt it has occasionally had the galling experience of watching disqualified trustees of the distinctly dodgy variety pop up again as chief executive or finance director of the same or perhaps another charity.

When the Cabinet Office carried out a consultation about what should be in the bill, more than 70 per cent of the 23 responses agreed that this provision should be in the bill, although in 8 per cent of cases the support was qualified. Of those who disagreed, most said such a power would raise concerns over human rights and therefore require stronger safeguards. Others pointed out that it could affect a person’s livelihood and should therefore be exercised by a court or tribunal rather than the commission.

In its reaction to the consultation, the government accepted the potential impact on a person’s ability to earn a living, and decided to sit on the fence. "While provision has not been included in the draft bill at this stage, the government may introduce such a provision at a later date," it said.

Now the government appears to be slipping at least one buttock off the fence and putting its weight behind inclusion of this controversial power after all. Giving evidence this week to the joint parliamentary committee scrutinising the bill, the charities minister, Rob Wilson, said: "This is something the commission wants added into the bill to avoid people exploiting what could be considered a loophole, and we're supportive of that view." Asked if it would be possible to define in statute what a position of responsibility was, Wilson said he thought it was, with reference to the law on the disqualification of company directors and the fit and proper persons test used by HMRC.

This power is attractive in principle as a way of protecting charities from unscrupulous individuals, and most would agree that a disqualified trustee should not be employed in the same charity. But it is possible to think of cases where, without extremely careful formulation, it would give the commission excessive power. What, for example, if the trustee being disqualified already worked as the chief executive or fundraiser for another charity with a completely different cause and way of working? The commission’s decision would in effect be a dismissal notice. And how would the threshold be set in the definition of a "position of responsibility"? By salary? By job title? By a case-by-case decision of the commission?

Such complications might lead to the conclusion that this is a power too far. If the government does decide to add it to the bill in due course, it should take care to mitigate its draconian potential with adequate safeguards, including making the power optional rather than automatic and introducing a clear line of appeal. No doubt the decision will be heavily influenced by the views of the scrutiny committee, which has now finished taking evidence and is planning to report by the end of February, give or take the usual slippage. If the decision goes against the new provision, charities can always take comfort from something the government said in response to the consultation - that it is open to them to check the commission's online list of disqualified trustees before making appointments. This would not help, however, in the case of existing employees.

 

 

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