Government drops plans to give exempt status to UK's largest charity

The government has abandoned plans to make the British Council an exempt charity. 

The Conservative peer Lord Hodgson of Astley Abbotts had tabled a motion that would have expressed his opposition to the move, but said the motion had been shelved because the proposal it referred to had been withdrawn.

Third Sector was subsequently told that the government had decided to abandon plans to give exempt status to the British Council, which is the UK’s biggest charity by annual income. 

It is understood that the Foreign, Commonwealth and Development Office changed its mind on the matter after a review. 

The government last month put down legislation aimed at making the council an exempt charity. 

The move would have meant the organisation would retain charitable status and would still be required to comply with charity law. 

But, unlike other charities, it would not be able to register with the Charity Commission, would not be directly regulated by the commission and instead would have another principal regulator.

In addition, it could only be investigated by the commission as part of a statutory inquiry at the request of its principal regulator. 

Government departments do not have the regulatory powers of the commission, so would need to ask the commission to open an inquiry if any statutory powers were needed. 

In this case, the British Council would have the FCDO as its principal regulator. 

Hodgson, who conducted a review of the Charities Act 2006, had put down a “regret motion” that was due to be debated in the House of Lords at a later date. 

He had been concerned about the principle of charities being moved away from Charity Commission regulation and instead being supervised by government departments that have no obvious expertise in charity law. 

The motion said the legislation to give the British Council exempt status would “introduce further unnecessary complexity to the regulation of the charity sector; will result in divided responsibilities for ensuring compliance with charity law; and therefore risk undermining public trust and confidence in the sector”. 

Hodgson had said he had nothing against the British Council, but was opposed to the principle of charities being taken away from regulation by the Charity Commission. 

He told Third Sector today he was pleased that the government had decided against giving the charity exempt status because it was very important for public trust in the sector that there was clarity in how charities were regulated. 

The FCDO declined to comment. 

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