Interview: Lord Hodgson promises a wide-ranging review

The Conservative peer tells Kaye Wiggins how he plans to examine the Charities Act 2006

Lord Hodgson
Lord Hodgson

Lord Hodgson of Astley Abbotts, the jovial and outspoken Conservative peer, has softened his tone since being appointed by the government to carry out a wide-ranging review of the Charities Act 2006.

Hodgson was appointed to the role last November after producing the Unshackling Good Neighbours report on cutting red tape for charities earlier in 2011. Before his appointment, he voiced strong opinions on charity law, saying he thought an increase in the payment of trustees was "coming, if we like it or not" and that the strict criteria for bringing a case to the charity tribunal should be removed because "it is almost impossible to find a case that fits within the tribunal's narrow parameters".

Now, with two civil servants from the Cabinet Office looking on, he is less forthright and more keen to stress the importance of an open-minded approach to the reform of charity law. On the issue of reworking the act's contentious section on public benefit, Hodgson says: "Sorry to be boring about this, but I have no views at present. For me to say either way now could pre-empt the whole purpose of this review."

Instead, he wants the review to be shaped by the views of charities and the public. "We are six or eight weeks into this review, and it's all on the table," he says. "Nothing has been decided."

From now until April, he will hold regional meetings in England and Wales where he hopes to collect "real-life examples" of how and why the law should be amended.

"If it's just written in the confines of an ivory tower, what on earth are we bothering about it for?" he says. "What made the red-tape taskforce valuable was the real-life examples, which I believe are worth any amount of paper."

There has been some debate in the sector about whether the five-year review, stipulated in a clause in the 2006 act, would be wide-ranging or would merely tinker with some of the more technical details of charity law. Hodgson says there will be a bit of both. "There's going to be a sort of anorak's corner - well, a specialist corner - for people who are really concerned about the specialist aspects of the law," he says. "But the report will also have the big stuff."

The "big stuff", it seems, will address fundamental questions about what it means to be a charity. "There are some philosophical, big-picture questions we're looking at," he says. "For instance, does becoming a charity impose certain duties on you because you have the imprimatur of the charity and the tax benefits? What, if anything, is the taxpayer entitled to ask you as a charity to do in return?"

Another big question, Hodgson says, is how tightly the sector should be regulated. "On the one hand, too much regulation stifles innovation," he says. "At the other extreme, you have a free-for-all, in which case the public's trust and confidence is damaged because they don't think there's enough regulation.

"We are trying to find out where you draw the line between process, which means introducing tick-boxes to make sure things have been done properly, and judgement, which is about leaving it to charity trustees to make their own decisions and justify them to beneficiaries, donors and the public."

One option, Hodgson says, could be to introduce a new system of "co-regulation" in which charities with shared interests group together to regulate each other, rather than being regulated by the Charity Commission. "Church charities, sports groups and parent-teacher associations could develop regulation in a way that made sense to their members, leaving the commission responsible for the larger groups," he says.

Another big issue is the regulation of fundraising. The 2006 act set out plans for the Charity Commission to regulate face-to-face fundraising, but these have not been enacted, partly because of the regulator's limited funds.

"We're not going to be able to pass by the fundraising regulation issue, because it is upmost in people's minds," says Hodgson. "In theory, people don't like chugging. They don't like being approached on the street, but it is obviously effective or charities wouldn't do it.

"Trying to find a structure that balances the very reasonable need of charities to try to raise money with the public's wish for a degree of privacy is going to be challenging. So please, O public, O charities, write in and tell us how you think this could be done in a way that maintains public trust and confidence."

Hodgson believes it is only right that the review addresses some of the bigger issues rather than merely tightening certain legal details. "Would you not expect us to be asking these questions?" he says. "If you just wanted a legal review of the Charities Act and you wanted to deal with the specialist stuff, that could be done by a lawyer. I'm not a lawyer."

SCOPE OF THE REVIEW:

The 2006 act does not prescribe limits for the review, but says it will consider:

Public confidence - The Charity Commission is charged with "increasing public trust and confidence in charities".

Charitable donations - Parliamentarians were concerned that the requirements of the act would reduce giving.

The willingness of individuals to volunteer - They were also concerned that the new law might depress volunteering.

Excepted charities - The act said some charities excepted from the requirement to register with the commission would have to register.

Lord Hodgson will be collecting submissions from charities and members of the public until April. To contribute, email charitiesactreview@cabinet-office.gsi.gov.uk.

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