The proposal to give the Charity Commission the power to disqualify charity trustees based on their fitness to be in the role is "extraordinarily broad and should be scrapped", according to the Directory of Social Change.
The draft Protection of Charities Bill says that the commission may disqualify a person from being a trustee if it is felt that "past or continuing conduct by the person, whether or not in relation to a charity, is damaging or likely to be damaging to public trust and confidence in charities generally or in the charities or classes of charity specified or described in the order".
"In our reading of it, this means that the Charity Commission could disqualify anybody from being a trustee if it thinks they should be disqualified," the DSC’s written evidence to the joint committee of MPs and peers scrutinising the legislation says.
The training, publishing and support charity says in its submission that the commission "generally does a good job in understanding, applying and communicating the law". The DSC says it acknowledges that there are "some quite specific gaps" in the commission’s enforcement powers, and that it is right that these be addressed.
But it also says it does not believe that misconduct, mismanagement, fraud and terrorist abuse in the charity sector are as widespread as has been suggested. "Parliament should avoid using ‘sledgehammers to crack nuts’ in the law," the DSC submission says.
In addition to opposing the commission having the power to disqualify what it considers unfit trustees, the DSC says that the power to disqualify a trustee based on their having failed HM Revenue & Customs’ own "fit and proper persons" test should not be included in the law. "Including this provision in charity law as a criterion for disqualification would seem to validate a problematic and controversial administrative procedure introduced by HMRC," it says.
The submission also expresses concerns that the powers of redress for trustees disqualified or otherwise subject to the new powers might be insufficient. The DSC says that it is debatable whether the charity tribunal "has so far lived up to its billing as a swift and low-cost means of challenging the Charity Commission’s decisions", and says it "may still be beyond the reasonable means of many trustees". The DSC also says that the commission’s constrained resources mean it might not be able to priorities requests to review its decisions or waive automatic disqualifications.
The deadline for written submissions to the draft Protection of Charities Bill committee was last week, although only two submissions have so far been made publicly available. Oral evidence sessions continue in January.