Trustee rules 'could lead to conflicts of interest'

New rules allowing charities to pay their trustees for providing professional services without first seeking permission from the Charity Commission could cause conflicts of interest, according to one sector expert.

Sections 36 and 37 of the 2006 Charities Act, which are due to be implemented this month, will allow trustees to be paid for providing services to their charities. Such arrangements were previously possible only with the commission's consent.

Payment now becomes possible for services such as legal work, accountancy, building and maintenance.

Judith Rich, chair of Charity Appointments and the Diabetes Foundation, said it was a step towards the full payment of trustees. "It will leave the door open to conflicts of interest," she said. "It could cause a riot."

Tesse Akpeki, a governance consultant, said ideally trustees should not be paid even for providing services. "Motivation and money need to be kept separate," she said.

But Rodney Buse, chair of Charity Trustee Networks, said there was merit in the new rules, provided there were safeguards to ensure transparency.

Seb Elsworth, head of policy at Acevo, described the new rules as helpful. "We hope the commission will extend this pragmatic approach to cover payments for being a trustee," he said.

Rosie Chapman, executive director of policy and effectiveness at the commission, said the new rules were not a way of allowing payment for trusteeship through the back door.

"The safeguards around conflict of interest are clear," she said. "The trustee in question cannot be involved in the decision-making, there must be a written agreement and the board must be clear about the benefit that this arrangement brings."

Fact file

Several other sections of the Charities Act are also due to come into force in February:

- Charities will be able to take into account "current social and economic circumstances" as well as "the spirit of the original gift" when redrawing their charitable objects.

- Charitable companies will be permitted to make minor changes to their memoranda and articles of association without the Charity Commission's consent.

- Unincorporated charities with incomes of less than £10,000 will be able to transfer all their assets to other charities or change their purposes by making simple resolutions.

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