Rob Wilson, the Minister for Civil Society, has said he supports the proposal that people disqualified from being trustees should also be excluded from taking on other key positions within charities.
Wilson was giving evidence in Westminster yesterday to the joint committee that is scrutinising the Protection of Charities Bill. The draft bill, published in October, proposes giving new powers to the Charity Commission, including allowing it to ban people with convictions from being charity trustees or disqualify people it considers unfit from taking up trusteeship.
But a proposal contained in the initial public consultation document, that people disqualified from trusteeship should also be banned from taking up other key roles in charities, such as finance director, was not carried forward into the bill. The commission has said it hoped this would be added.
Asked by committee member Chris Williamson, the Labour MP for Derby North, whether he thought that additional power would be useful, 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."
Williamson then asked whether it was possible to adequately define positions of responsibility in statute. Wilson said he thought it was, and that it could be done with reference to the disqualification laws for company directors and the HM Revenue & Customs fit and proper person test.
Wilson said that the power for the commission to give statutory warnings to charities was "one of the most important powers in the draft bill". He reiterated the commission’s concern at the fact that about a quarter of informal warnings it sends out are partially or fully ignored.
The committee had previously heard evidence questioning whether this power would be useful and why it would not be possible to appeal to the charity tribunal against the issue of such a warning.
Wilson said that if it were possible to appeal the statutory warnings, the commission might get nervous about issuing them if there was "constantly appeal after appeal gumming up the system". He said a charity could instead bring a judicial review. Wilson later suggested that a number of appeals made to the tribunal against the opening of statutory inquiries were "deliberate attempts to frustrate the commission’s processes".
Wilson had begun his evidence by saying that abuse of charities was rare. "I think the first thing I’d say is that abuse in the sector is small in the context of the size of the sector, but it is still significant," he said.
But he said the new powers were important to the commission and were part of a "multi-strand approach" to improving the regulator that included extra funding and an internal transformation programme.
The minister said that, the day before appearing at the committee, he had given approval to the Charity Commission's eight-person board "to continue its existing level of engagement to lead the next phase of the commission’s change programme".
This programme to make the commission a more proactive and effective regulator was begun in 2014, after the National Audit Office published a highly critical report on the commission in December 2013.
The commission's board members are contracted to work up to 18 days a year and are paid £350 per day, an arrangement first agreed last year by Nick Hurd, who was then Minister for Civil Society, and which has allowed them to devote more time to this programme. It is understood that some board members, including its chair, William Shawcross, do not charge the commission for this extra time.
Wilson said he felt the commission was improving its effectiveness and praised the "strong leadership" of Shawcross and the chief executive, Paula Sussex. "I think the Charity Commission is doing a good job," he said. "It has responded well to the criticism from the NAO and others."