Charity regulation 'in crisis', academic Gareth Morgan tells MPs

The professor of charity studies at Sheffield Hallam University tells the Joint Committee on the Draft Protection of Charities Bill that the proposed legislation would be 'tinkering around the edges'

Gareth Morgan
Gareth Morgan

Charity regulation in England and Wales is in a "state of crisis", according to Gareth Morgan, professor of charity studies at Sheffield Hallam University.

Morgan, who gave oral evidence in Westminster to parliamentarians on the Joint Committee on the Draft Protection of Charities Bill this week, has also released the written submission he sent to the committee in advance of the hearing.

The document says that the draft bill, which proposes giving the Charity Commission new powers such as the ability to disqualify someone it considers unfit from being a charity trustee, is "simply tinkering around the edges".

Morgan’s submission says that if parliament is minded to make time for a new charities bill, "I am surprised that what is proposed by the Cabinet Office is so modest".

It says some of the recommendations of Lord Hodgson’s review of the Charities Act 2006 that needed primary legislation, such as limitations on claiming Gift Aid by charities that fail to file their accounts or the ability for charities to be charged for filing their accounts or for new registration, could have been included in a new bill.

Morgan, who has 25 years of experience carrying out research on the voluntary sector, says in the document that one reason for the crisis in charity regulation is the under-resourcing of the Charity Commission, which means that the regulator is "constantly struggling to maintain an effective service even to ‘normal’ charities that are operating properly – let alone to those charities giving regulatory concern".

It says: "As a result, relatively little action appears to be taken except in the most serious cases, and much of the advisory and guidance work of the commission to encourage charities to comply has had to be cut."

Other reasons for the perceived crisis are the fact that "vast swathes of charities" are not on the register of charities because they are either exempted or excepted from registration with the commission.

Morgan says this is unlike the systems in Scotland and Northern Ireland, where charity registration is, in effect, compulsory.

He says that the draft bill is hard to follow and does little to address a lack of joined-up thinking in areas including charity and tax law.

His submission says that he would make the case for a more broad-ranging "regulation of charities bill", which would repeal all the provisions concerned with the Charity Commission’s regulatory and investigatory powers in the Charities Act 2011 and enable parliament to consider afresh what powers the regulator should have and to clarify the boundaries with HM Revenue & Customs.

This legislation would also consider when misdemeanours in charities should be subject to civil or criminal remedies and whether the commission should be able to act as a prosecuting authority in cases where criminal sanctions might be appropriate.

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