'Charity' to get Scottish definition

The definition of charity is set to take different forms in England and Scotland.

By 2006, Scottish charities will have to comply with principles of public benefit spelled out in statute, whereas case law and the discretion of the Charity Commission are expected to decide charitable status in England and Wales.

In an unexpected u-turn last week, the Scottish Executive included a written definition of public benefit in a bill to set up an indigenous system of charity regulation in Scotland for the first time.

An English and Welsh charities bill was also widely expected to form part of the Queen's Speech at Westminster on Tuesday. But with the Home Office, the NCVO and the Charity Commission all opposed to defining public benefit in the Bill, English and Scottish charity law seem certain to take divergent paths.

The proposed Scottish definition says that a public benefit test must consider whether an organisation provides benefit "to a section of the public only", and whether conditions on obtaining benefit are "unduly restrictive". Any "disbenefit" incurred by the public must also be taken into account - criteria that have never been suggested for charities in England and Wales.

Martin Sime, chief executive of the Scottish Council for Voluntary Organisations, which has campaigned for a written definition, welcomed the new Bill.

He said: "We are heading for a rational system that doesn't rely on old case law from other countries.

"We have the beginnings of a definition, although it's not as strong as we wanted. But we can now focus on what the definition should be, not whether case law should have precedence. This can't be left to lawyers."

But he admitted that "an element of dislocation" between English and Scottish charity law was inevitable.

In England, the Charities Bill could include a compromise on public benefit that gives the Home Secretary the authority to issue non-binding statutory guidance to the Charity Commission on how public benefit principles are to be interpreted.

But the Conservative spokeswoman on civil society, Jacqui Lait, warned that such a power could leave the bill open to party political dispute.

"The Charity Commission is part of the Home Office and if the Government gives instructions to charities that affect public benefit, that amounts to a politicisation of charities," she said.

But she indicated that the Conservatives would help to ease the passage of the Bill through Parliament. "Our intention is to get good law on the statute book. There are issues that need clarification and if the Government gives us that clarification there is no reason why it shouldn't pass before the general election," she said.

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