Not a bad week for the sector politically - but watch this space

There was good news on business rates, sensible proposals from Lord Hodgson, and much to play for in the new charities act, writes Stephen Cook

Stephen Cook
Stephen Cook

There have been three political developments for the voluntary sector this week, which together amount to something of a curate’s egg. Part of the egg is good, part is potentially good, and the rest awaits the test of time.

The good part was the decision in the Treasury’s review of business rates not to tamper with the 80 per cent mandatory rebate for charities, which is worth £1.5bn a year. There were sighs of relief all round, although the growing financial pressure on local authorities may mean fewer of them will exercise their discretion to spare charities the remaining 20 per cent as well.

But the decision was slightly tainted by being announced through the back door. George Osborne did not mention it in his Budget speech and the accompanying documents did not mention it either. It was confirmed in a roundabout way through conversations between Treasury officials and sector umbrella bodies including the Charity Tax Group and the National Council for Voluntary Organistions.

This makes it look almost as if the government cannot bring itself to announce anything that boosts or makes a concession to charities at a time when they are still under something of a cloud in the media and the public mind; only a week earlier, remember, Gina Miller, co-founder of the True and Fair Foundation and darling of the Daily Telegraph, had produced a well-publicised report arguing that rate relief for charity shops should be scaled back to 50 per cent. Perish the thought, though, that this might have been a factor in the way things were done.

The development that is potentially good was in Lord Hodgson’s review of the workings of the lobbying act. He tackled the crucial vexed question of the definition of campaigning activity, concluding that its definition in the act as activity that "could reasonably be regarded as intending to promote or procure electoral success" was too ambiguous, laid charities and others open to malicious complaints and had had a chilling effect. Hodgson has sensibly  recommended replacing that essentially subjective definition with an objective one – activities that are "actually intended by the third party to influence voters." If this and other sound recommendation in his report are accepted and implemented by the government – and that is a big if – then the potential goodness of this part of the egg will become actual.  For many, of course, it would be better still to repeal the act, but that is probably crying for the moon.

The third development was royal assent for the Charities (Protection and Social Investment) Act. It gives the Charity Commission significant new powers, contains various provisions on fundraising including a reserve power for statutory regulation, and provides greater clarity about the making of social investments by charities. The new commission powers are the parts for which the test of time will be crucial.

Some of the powers close obvious or technical loopholes, but there has been much controversy about a new power to issue warnings to charities that the commission thinks have strayed into low-level misconduct or mismanagement. Some charity lawyers have suggested this might be used as the "weapon of choice" to bring controversial charities to heel, but the commission has refuted this and pledged it will be used fairly. There have also been concerns about the new power to ban from charity trusteeship people the commission considers to be "unfit."

Most of the main powers will not come into force for some time, and in the interim the commission will consult on and produce guidance about how they will be used. A lot of important detail has yet to be decided upon, and there is clearly still a lot to play for. If we end up with measured and proportionate regime for the application of these powers, there will be little for charities to worry about. But if the commission yields to internal or external pressure – from politicians and the media, for example - to use them to demonstrate and confirm to the world how "robust" it has become, then some white legal water may lie ahead.

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