The Charity Commission is not the “all-powerful regulator of its sector”, according to the Conservative peer who conducted a review of the Charities Act 2006.
Speaking in a House of Lords debate of latest Charities Bill, Lord Hodgson of Astley Abbotts said he had a “really serious concern” about the new legislation.
Hodgson said the commission could only appeal to the charity tribunal for a ruling relating to the operation of charity law if the Attorney General gave it permission to do so.
He said he had recommended in his review that the regulator should be free to appeal to the tribunal provided it informed the Attorney General of what it was doing, a position that was supported by the Law Commission but rejected by the government.
“Therefore, the bill as drafted means that the Charity Commission remains in the last resort under the sway of the Attorney General,” Hodgson told parliament.
Hodgson had previously said: “I imagine that most members will think of the Charity Commission as the all-powerful regulator of its sector. I certainly did before I began my review. In fact, it is not.
“Its ultimate power is subject to the permissions of the Attorney General.”
He went on to say that was “an extraordinary position for the sector regulator to find itself in”.
He said: “It is as though one of the financial regulators, seeking a ruling on a point of law, had first to go to the Treasury to get the go-ahead. People would think that an extraordinary restriction on a regulator’s independence and power, and so it is.”
Hodgson said that the “in-principle defect” was made worse by the performance of the Attorney General’s duties because the Charity Commission had been waiting almost four years for a decision on whether it could take a case to the tribunal involving an apparent conflict of interest involving trustees of the Royal Albert Hall.
The more than decade-long case revolves around seat-holders, who are allegedly able to make tens of thousands of pounds a year by selling tickets well above their face value, making up the majority of the charity's trustees, creating a potential conflict of interest.
The commission has been trying to persuade the charity to amend its governance arrangements so that seat-holders are in the minority on its board.
Because the charity has refused to comply, the commission first asked the Attorney General for consent to refer the case to the tribunal in September 2017.
The Attorney General at the time, Jeremy Wright, gave his consent in January 2018, but withdrew it when the hall threatened to seek a judicial review of his decision.
Hodgson said the latest Charities Bill was “otherwise excellent”.
Baroness Barran, the minister for civil society, responded to Hodgson by saying: “I understand that my noble friend Lord Hodgson is unhappy that the government did not accept this recommendation.
“However, the Attorney General has an important and valued role as protector of charities, and it would be wrong to change this as a result of a single complex case, as cited in the case of the Royal Albert Hall.
“To put this in context: references to the tribunal are rare; there have only been two since it was set up in 2009.”
A spokesperson for the Charity Commission said the issue of the regulator having to ask the Attorney General for permission to apply to the charity tribunal for a ruling on a point of charity law was a matter for parliament.