Government rejects suggestion to make it easier for charities to challenge Charity Commission decisions

The Department for Digital, Culture, Media & Sport says it will accept all but six recommendations made by the Law Commission in 2017

The government has rejected recommendations that would make it easier for charities to challenge Charity Commission decisions.

The Department for Media, Culture and Sport has responded to the 43 recommendations made by the Law Commission report in 2017.

The Technical Issues in Charity Law proposals were designed to ease the administration and regulation of charities and the government has accepted all but six of the recommendations. 

The rejected suggestions include considering a review of charities’ right of appeal against decisions made by the regulator.

The government also rejected a recommendation that would allow charities to appeal directly to the courts for authorisation to pursue charitable proceedings.

The government response said: “This would remove an important protection of charity assets: Charity Commission approval prevents charity funds being wasted on litigation that is without merit.”

The government did agree to the proposal for simplified rules on the rights of trustees to release money from permanent endowments and invest those endowments, and accepted that trustees should have statutory powers to borrow from their organisation’s permanent endowment.

It will also be easier to amend governing documents, and the government accepts the introduction of a new statutory power allowing trustees to make small ex gratia payments without having to obtain the prior authorisation of the Charity Commission.

In her foreword to the response, Baroness Barran, the minister for civil society, said: “In principle, we accept the vast majority of the report’s 43 recommendations, and will look to implement them when parliamentary time allows.”

Legal experts welcomed the news, but called for more information from the government on when it will find time to implement the recommendations. 

Nicola Evans, charities counsel at the law firm BDB Pitmans, said: “It’s great news that the government has responded positively to the Law Commission’s report today.

"The minister’s statement highlights the ‘enormous value that charities contribute to our economy and society’, so it must be hoped that the government will now find parliamentary time to implement the recommendations.”

Chris Priestley, partner in the charities and philanthropy team at the law firm Withers, said he also looked forward to the government finding legislative time for the Law Commission project to “bear fruit”.

He said: “At a time when charities face enormous pressure to deliver more while enduring severely diminished resources; anything which reduces the administrative burden and makes operations easier has to be welcomed.”

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