Sector bodies split over planned power to disqualify trustees

A consultation on proposals to give new scope for action to the Charity Commission has sparked debate over their viability

Charity Commission
Charity Commission

Charity umbrella bodies and representative groups are divided over whether the Charity Commission should be given a new power to disqualify people from being trustees.

The Cabinet Office consultation on proposed new powers to disqualify trustees and deal with mismanagement closed yesterday.

Responses to the consultation, seen by Third Sector, show varying opinions on proposal two in the document, which suggests giving the commission a new power to disqualify individuals from trusteeship.

The consultation put forward two options: one that would give the commission a limited power to disqualify under specific circumstances as defined by a list, and a broader discretionary power to disqualify people whose conduct makes them unfit to be a trustee.

The first option is supported by the policy body the Directory of Social Change and the Wales Council for Voluntary Action; the second option is supported by the local infrastructure body Navca.

Submissions from the National Council for Voluntary Organisations and from a working group of the Charity Law Association support neither option.

The NCVO puts forward an alternative system that would involve the creation of three new categories for disqualification, including crimes that are "so repugnant to society that the individual would not be tolerated in a position of trusteeship".

The proposal for a new power for the regulator to direct a charity to wind up and apply all its assets to charitable purposes is also met with caution. The NCVO says: "A general unconstrained power would be going too far because it could lead to excessive interference in the existing statutory and court processes."

The DSC says the proposal as drafted "is far too vague" in the amount of discretion it gives the commission. The CLA does not support the measure. Navca says the power "does appear to be proportionate".

The CLA response points out that the circumstances surrounding the tax-avoidance vehicle the Cup Trust "would not have been affected by any of the extended powers which are set out in the proposals".

The NCVO response says it "remains of the view that the real change that is required is not a legal one, but a cultural and strategic one". The 11-member CLA party, chaired by Jo Coleman of IBB Solicitors, says the consultation contains "insufficient detail" in many cases to allow it to reach conclusions.

It also criticises the timing of the consultation, which began in December, saying that the Christmas break would have diminished the level and quality of responses.

Jay Kennedy, director of policy and research at the DSC, said: "We would again remind the government of the commission’s strategic priority of promoting compliance through guidance."

The consultation asked if terrorism should be among crimes added to the current list of offences that automatically disqualify trustees. Navca agrees, and the NCVO says terrorism should be dealt with "on a case-by-case basis". The CLA provides in its response a more specific definition for which range of terrorism offences might be included.

Changing the commission’s powers to allow it to remove a disqualified trustee attract general support.

A Cabinet Office spokeswoman said it could not say when the summary of responses or a government reply would be ready.

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