Charity Commission says proposed new powers 'would be used proportionately'

A briefing issued today before tomorrow's second reading of the charities bill says the legislation will plug loopholes and solve underlying weaknesses in enforcement

Regulator: responded to letter from sector organisations
Regulator: responded to letter from sector organisations

The Charity Commission says that its proposed new powers under the charities bill would be used proportionately and only in a small number of cases.

The regulator issued a briefing today before tomorrow’s second reading in the House of Commons of the Charities (Protection and Social Investment) Bill, saying the legislation would help to plug loopholes and solve "basic, underlying weaknesses" in its existing enforcement abilities.

The bill, which has already passed through the House of Lords, would allow the commission to issue official warnings to charities, to disqualify those with criminal records relating to sexual and terrorism offences from serving as trustees and to direct charities to be wound up after investigations.

The new measures in the bill have been met with increasingly strong resistance from the sector. Yesterday, the sector bodies Acevo and the Charity Finance Group, the training and publishing charity the Directory of Social Change and the law firm Bates Wells Braithwaite wrote a joint letter to MPs warning that the new powers could threaten charities’ independence.

The National Council for Voluntary Organisations has also expressed concern about the existing version of the bill.

But in its own briefing, the commission says: "The bill will strengthen the commission’s ability to tackle the most serious forms of abuse.

"These powers will only directly affect a very small proportion of charities, but it is hoped they will make a significant difference in those cases."

The letter from sector bodies warned MPs that the power to issue an official, non-appealable warning gave rise to "serious concerns".

But the commission’s briefing says: "This power fills a crucial gap and is a simple, expedient, reasonable and proportionate way of dealing with lower levels of breaches where the risks and impact on charitable assets and services are not as serious so as to warrant more severe regulatory action."

The letter also raised concerns about the proposed power for the commission to disqualify anyone it deemed unfit to be a trustee, even if they had not been convicted of a crime.

The commission’s briefing says the draft legislation "provides a number of specific statutory safeguards" and the power "must be exercised in accordance with the commission’s statutory functions, duties and objectives".

It says the commission is required "to act proportionately, consistently and target only cases in which action is necessary".

The commission’s briefing concludes: "At second reading, we urge MPs to support this important bill that will provide the commission with the necessary tools to regulate effectively."

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