Extra safeguards are needed in the charities bill

The proposals before the Commons give too much discretion to the Charity Commission, says Stephen Cook

Charity Commission
Charity Commission

As the Charities (Protection and Social Investment) Bill returns to the Commons today for its second reading, the Charity Commission has asserted that new powers to which sector bodies are objecting would be used proportionately and only in a small number of cases.

Before MPs put their trust in this assertion and vote these powers through without amendment, they should perhaps study the commission’s recent track record. The key case in point is, of course, the one involving the Joseph Rowntree Charitable Trust.

In this case the commission acted so immoderately and in such haste that its actions were the subject of judicial review in the High Court and it was obliged to agree a statement that amounted to an admission that it had gone too far and been obliged to climb down.

With this in mind, it would be unwise for MPs to take for granted that the commission will always act proportionately. As for "a small number of cases", a single injustice or excess among that small number would be enough to discredit the law and those applying it.

The objections and proposed amendments to the provisions of the bill are set out today in a briefing document to MPs by the chief executives’ body Acevo, the Charity Finance Group, the Directory of Social Change,  the international development umbrella body Bond and the specialist charity law firm Bates Wells Braithwaite.

The provisions that are causing most concern are: the power of the commission to issue warnings to charities that it thinks are doing things that amount to misconduct and mismanagement; a power for the commission to disqualify certain people from being charity trustees; and a clause that automatically disqualifies from charity trusteeship people who have committed certain offences.

Taking them in reverse order, the automatic disqualification includes, indiscriminately, all people who have been convicted of sexual offences, even if those convictions are spent under the terms of the Rehabilitation of Offenders Act. (It doesn’t, incidentally, include those who have been convicted of murder). This will be a body blow to some charities in the criminal justice sphere that rely on ex-offenders.

The vetting and barring arrangements are designed to place appropriate restrictions on people whose past offences make it inappropriate for them to work with vulnerable beneficiaries or the public. This extra, deeply illiberal provision should be removed from the bill.

The proposal for the commission to have the power to disqualify certain people from being charity trustees or from occupying senior positions in charities is also alarming because it is expressed in such broad terms. The  commission will be permitted to bar anyone whose "past or continuing conduct, whether or not in relation to a charity, is damaging or likely to be damaging to public trust and confidence in charities generally." This is an extraordinary catch-all which gives the commission, in effect, a power of veto that it does not have to justify. The briefing sensibly proposes that this power should only be exercised by the charity tribunal.

But the provision in the bill that is perhaps most worrying in its present form is the one that allows the commission to issue a warning to charities if it considers their actions amount to misconduct or mismanagement. It does not allow for a charity to receive a reasonable amount of notice that a warning will be issued, allows no right of appeal and permits the commission to publish the warning. The commission’s contention that a right of appeal exists, in effect, by means of seeking judicial review does not convince.

The briefing to MPs suggests there should be 28 days notice, calls for a right of appeal to the charity tribunal, and argues that publishing the fact that a warning is being issued should not include the name of the charity. It will be recalled that the commission mentioned further publicity when it was persuading the JRCT to give an undertaking never again to fund the controversial advocacy group Cage.

A member of the Charity Law Association’s working party on the bill suggested recently that warnings like this could be used by the commission as a "weapon of choice" or even as a form of punishment. Without proper safeguards, the concern will inevitably be that the commission wants this power as a quick and easy way to bring charities to heel when it spots something it doesn’t like, or when a charity – to borrow a phrase from a commission statement during the JRCT affair – does not behave "in the way the public would expect."

In summary, the commission’s proposition of "trust us, we’re a regulator" cannot be relied upon. It has recently, in specific terms, put charities on notice that they can no longer expect the benefit of the doubt, and it has shown itself to be far from immune from acting disproportionately. In the case of the JRCT its actions verged on the vengeful, even though the charity had not infringed charity law.

By the same token, the legislature should not give the commission the benefit of the doubt. The commission already has strong and wide-ranging powers. The  more contentious of the extra powers in this bill require stronger safeguards to protect the vital independence of charities, and MPs should insist on those safeguards in the coming days.


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