Analysis: Wide-ranging review of the 2006 Charities Act gets under way

Examination led by the Conservative peer Lord Hodgson will include the remit of the charity tribunal and the licensing and regulation of fundraising, writes Andy Ricketts

Charities Act 2006 to be reviewed
Charities Act 2006 to be reviewed

The appointment of Lord Hodgson to lead the review of the Charities Act 2006 has been popular. The Conservative peer, who is also president of the National Council for Voluntary Organisations, spoke in the Lords for the Tories while the act was going through parliament, and will be familiar with many of the issues he is about to tackle.

His experience of running the Big Society Deregulation Taskforce, the government-commissioned review of red tape in the sector that reported earlier this year, will also have given him plenty of background material.

Its wide-ranging terms of reference appear to have allayed fears among charity lawyers that the review, which was stipulated in the 2006 act, will be no more than a box-ticking exercise.

Nicola Evans, senior associate, Bircham Dyson Bell"There seems to be a genuine wish to try to have the legal framework progressed," says Nicola Evans, senior associate at the law firm Bircham Dyson Bell.

Ann Phillips, partner at the law firm Stone King, says she is "very hopeful that it will be a useful exercise".

The review has two main aims: to report on the effectiveness of the act and to consider whether further changes could be made to improve the legal and regulatory framework for charities.

Within those aims, Hodgson will also consider subjects ranging from public benefit to the success or otherwise of the charity tribunal, the operation of charity merger provisions and a recommendation of the Calman Commission on Scottish devolution, which said there should be a UK-wide definition of the word "charity".

Fundraising could prove to be the knottiest area. The terms of reference include the licensing regime for public charitable collections - provision for the reform of which were included in the 2006 act but have never been enacted - and the progress of the Fundraising Standards Board, launched in 2007 for the self-regulation of fundraising activity.

Senior fundraising figures have privately expressed doubts about whether the FRSB, the Public Fundraising Regulatory Association and the Institute of Fundraising, which all provide oversight to aspects of UK fundraising, should continue to operate cheek by jowl.

The FRSB in particular will come under the microscope because the 2006 act empowers the government to introduce a statutory system for the regulation of fundraising if self-regulation is deemed to have failed. It immediately welcomed the review and issued a statement on its achievements so far.

Colin Lloyd, chair of the FRSBColin Lloyd, chair of the FRSB, says he looks forward to working with Hodgson and "gaining his feedback about what could be done to enhance the self-regulatory scheme".

Simon Morrison, director of marketing and communications at the IoF, says it is canvassing its members' opinions on the review. "We want to make sure that self-regulation is working as it should be," he said.

Timescales are tight: Hodgson will work one day a week and has to submit his final report to Nick Hurd, the Minister for Civil Society, before parliament rises in mid-July.

Stephen Lloyd, senior partner at the law firm Bates Wells & Braithwaite, will provide specialist legal advice; Office for Civil Society officials will also provide support.

Meanwhile, the Law Commission will start looking at aspects of charity law in late 2012, taking in Hodgson's conclusions.

It will produce its own report in 2013, with the possibility of further legislation. "If the project proceeds to a final report with draft bill, we anticipate that publication will be in late 2015," says a statement on the Law Commission's website.

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