Charity Commission extends official warnings notice period

The regulator has been given extra powers to issue warnings to charities and disqualify people from trusteeship

Charity Commission
Charity Commission

The Charity Commission has increased to 28 days the amount of notice it will give to charities before it issues an official warning, new documents show.

The commission was granted extra powers to issue warnings to charities and disqualify people from trusteeship by the Charities (Protection and Social Investment) Act 2016, and has today published its response to two consultations on draft guidance on the new powers.

The regulator revealed that it plans to give charities 28 days notice of its intention to issue them with warnings – an increase from 14 days in the draft guidance – unless there are good reasons for longer or shorter notice periods in a particular case.

It has also changed its plans to have a default assumption in favour of publishing the warning, saying instead that it will consider in each case whether publication is appropriate.

The commission today published its response to the consultation, a question-and-answer document for trustees and the operational guidance that commission staff will use when deciding whether to issue a warning.

The commission can issue an official warning when it considers there has been a breach of trust or duty or other misconduct or mismanagement in a charity, but which is not serious enough to warrant the opening of a statutory inquiry.

The operational guidance on warnings says the commission would normally publish a warning where it considered that doing so would be likely to help secure compliance by the trustees with their duties, protect public trust and confidence in the charity or charities more widely, be the most effective way of highlighting a regulatory issue to the wider sector, promote transparency, protect potential donors or be in the public interest for any other reason.

But it says the commission would not publish if the effect could represent a risk to someone’s personal safety, contravene confidentiality requirements, risk national security, cause disproportionate prejudice to the charity and/or its beneficiaries or not be in the public interest.

The consultation response says: "Some respondents were concerned that the commission might use warnings as a quick way of responding to complaints, to ‘gag’ campaigning by charities [or] in response to political or media pressure to take action.

"The commission will not use warnings in these ways."

The document says it would be unlikely to issue warnings for honest mistakes.

The commission has also released a question-and-answer document, a consultation response and an explanatory statement on its power to disqualify someone from acting as a trustee or senior manager in a charity for up to 15 years.

In the explanatory statement it says it could also disqualify a whole trustee body where necessary.

The commission says it will give at least a month’s notice to people it plans to disqualify, and give notice to other trustees at the charity as well as the public.

One of the conditions for which someone could be disqualified – "past or continuing conduct, whether or not in relation to a charity that is, or is likely to be damaging to public trust and confidence in a charity or charities" – has been criticised as too broad.

In its response, the commission says it will consider each situation on a case-by-case basis and will have to identify how such conduct is or is likely to be damaging to public trust and confidence in a charity or charities. The regulator says that "likely" in this context would have to mean more than just a hypothetical or remote possibility that trust and confidence would be damaged.

It also divides the disqualifications into three: a lower band with a ban of less than five years, a middle one of five to 10 years, and an upper band of 10 to 15 years for the most serious cases.

The commission says it received almost 100 responses across the two consultations.

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