Political News: Draft Charities Bill - Scrutiny Committee Report

Stephen Cook

The most eye-catching proposal in the report of the Joint Committee on the Draft Charities Bill, published last week, was not actually among its 54 wide-ranging recommendations.

It was the suggestion that the Government should consider removing charitable status from fee-paying schools and hospitals, but allow them to continue receiving tax breaks if they could prove they were providing public benefit.

The proposal was probably designed to placate those committee members deeply opposed to charitable status for public schools, but its absence from the list of formal recommendations gave heart to the Independent Schools Council.

In its reaction to the report, the council confined itself to saying it was pleased the committee had recognised the importance of educational charities and repeated that its members educated around 500,000 children at virtually no public cost.

As well as soft-pedalling its own idea of removing charitable status from fee-paying schools and hospitals, the committee also backed away from the proposal to write a definition of public benefit into the Bill itself.

This was advocated by some Labour members after the Charity Commission had indicated at one stage that existing case law might have the effect of sparing such institutions from the consequences of public-benefit tests devised by the commission without statutory backing.

Even though its chairman Alan Milburn had described the situation as "a dog's breakfast", the committee opted in the end to make a different recommendtion on public benefit. This was to back the principles of the recent 'concordat', which the Home Office and Charity Commission drew up to qualify the commission's earlier document, and to replicate those principles "either in non-exclusive criteria included in the Bill or in non-binding statutory guidance issued by the Secretary of State".

Backing the concordat was welcomed by Stuart Etherington, chief executive of umbrella body the NCVO. But he went on: "We are far less convinced by the committee's recommendation that non-statutory guidance on public benefit could be issued by the Secretary of State or criteria included in the Bill.This should be a matter for the regulator."

This was echoed by the Independent Schools Council, which drew attention to the part of the report that said allowing ministers to give guidance would allow governments to interfere in the definition of what is charitable.

Recommendations relating to the Charity Commission included reviewing whether the commission was up to its job, reviewing the burden of regulation on charities, and making the commission exercise its powers "proportionately, fairly and reasonably".

The committee also called for a review of fundraising regulation to reduce fraud, said the commission rather than local authorities should grant certificates, and that fundraisers should make it clear to the public if they are being paid. Sue Brumpton, chief executive of the Public Fundraising Regulatory Association, said the Home Office would have to be "practical" about this.

The committee also recommended ditching a requirement that charities demonstrate their "social and economic impact". www.publications.parliament.uk/pa/jt/jtchar.htm.

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