New legislation could save the sector £28m over next 10 years

The Charities Bill is estimated to deliver cost savings for charities of at least £28m over its first 10 years.

A document published by the government about the legislation, which covers charities in England and Wales, estimates it will save about £2.8m a year over the next decade.

In the Queen’s Speech last month, the government said the new Charities Bill would “address a range of issues in charity law which hamper charities’ day-to-day activities, by implementing the majority of the recommendations in the Law Commission’s 2017 report Technical Issues in Charity Law”.

The Law Commission made 43 recommendations aimed at removing inappropriate burdens to save charities time and money.

In March the government announced it would accept all but six of the Law Commission’s proposals.

The new factsheet highlights four key measures in the new legislation: amending governing documents, improving land transactions, making use of permanent endowments and helping incorporations and mergers. 

The bill will allow charities to amend their governing documents more easily, with Charity Commission oversight where appropriate, and give them more flexibility to obtain tailored advice when they sell land, and remove unnecessary administrative burdens.

The changes will help increase flexibility for how charities use their permanent endowment, remove legal barriers to charities merging and give trustees advance assurance that litigation costs in the charity tribunal could be paid from charitable funds.

Other measures in the bill include expanding and rationalising the circumstances in which funds from a failed fundraising appeal can be applied to a charity’s other aims and remuneration for trustees who have supplied goods.

The bill will also enable the commission to authorise payments to trustees for “exceptional skill and effort with which they have carried out work for their charity in circumstances where it would be unjust not to do so”, and enable charities to make relatively small ex-gratia payments without seeking the regulator’s permission.

The bill was introduced to the House of Lords last month and a date for the first debate about the measures is yet to be announced. 

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