Regulator needs sector's trust before getting more powers, NCVO warns

In a briefing published before the second reading of the Charities (Protection and Social Investment) Bill, the NCVO warns that new Charity Commission powers should be used only if needed

Umbrella body publishes briefing
Umbrella body publishes briefing

- This article was corrected on 1 December 2015; please see final paragraph

The Charity Commission will need to win the trust the of the sector if it is to be awarded more powers in the Charities (Protection and Social Investment) Bill, the National Council for Voluntary Organisations has warned.

In a briefing published before the bill’s second reading in the House of Commons on Thursday, the NCVO says it supports the bill’s aim to strengthen the regulator but warns that such powers should be used only if they are needed.

The bill, which began life in the House of Lords, would give the commission additional powers, including allowing it to issue official warnings to charities, to disqualify those with criminal records relating to sexual and terrorism offences from serving as trustees and to direct a charity to be wound up after an investigation.

The NCVO briefing says the umbrella body "firmly believes in the importance of a competent and adequately resourced regulator, able to act effectively and fairly with the appropriate powers".

But it adds: "Any additional power granted to the commission requires a relationship of trust with the sector it regulates.

"Any perception of the commission acting in a way that is not in pursuance of its duty to protect the public interest in charities, could have a detrimental impact on both the effectiveness of the powers and levels of public trust and confidence in charities."

The Charity Law Association has previously expressed concern about the power to issue official warnings, because these would be non-appealable. Jo Coleman, a partner at IBB Solicitors and member of the CLA executive, committee warned that it could have "serious and unintended consequences".

The NCVO briefing also expresses concern about this power, saying it has "serious concerns" around the lack of a right to appeal, the possible loss of funding a warning could cause through attracting bad publicity and the lack of a notice period for trustees to make representations as to why a warning should not be publicised.

It also expresses concern about the power to disqualify trustees, saying the terms were too broad, and that there needed to be a fair and effective waiver system to allow trustees in some cases to remain in place despite previous convictions.

It warns that any intervention from the commission could have a "significant impact" on charities and their beneficiaries.

"It is therefore very important that any additional powers should only be granted where it is clear (and has been satisfactorily demonstrated) that they really are necessary, and that appropriate safeguards have been put in place," it says.

"Given the criticism directed at the commission that in the past it has failed to make sufficient use of its existing powers, it will have a responsibility to demonstrate that the new powers conferred are improving its regulatory performance."

The Charity Commission declined to comment on the briefing.

- The story originally said that the briefing did not highlight any particular powers the NCVO was concerned about.

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