Policy and Politics: Comment - Luke FitzHerbert of the Directory of Social Change

In her recent letter to Third Sector, Geraldine Peacock argues for keeping the 'case law' approach to defining 'public benefit' in the current Charities Bill. She argues it is the commission's intention to develop day-to-day practice in the light of modern conditions.

Until recently, we agreed with her. However, a recent paper from the commission itself is the reason for us changing our minds. The paper suggests that the commission will, in fact, be prevented from meaningful action by its own interpretation of what existing case law can permit.

As Peacock herself says: "The legal principles of public benefit are determined by law." The debate is about what that law actually is, and the commission's new paper, Public Benefit - The Legal Principles, sets out to answer the question. It says that there must be an identifiable public benefit, but then gives as an example a scanner in a hospital which benefits the public at large by enabling the hospital to use its resources in other ways.

By this token, any service provision is for public benefit. Any school, or clinic, for example, and no matter how high its charges, must automatically benefit the public at large by enabling existing resources to be used in other ways.

The only other relevant proviso is so easily met that it is toothless: the charity concerned must not entirely (sic) exclude those who are less well off. This means, as far as we can make out, that the new test will have no meaning at all, provided that just one person on a low income can be shown to benefit.

This was not the intention of those promoting the Bill, and we ask that the Government reconsiders accepting the Scrutiny Committee's recommendation that it must be changed. We suggest the insertion of the simple definition of public benefit found in the equivalent Scottish Bill, and which seems to have met with acceptance in Scotland. The NCVO proposes another way of getting the same result. But the Bill must be changed.

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