Sector bodies and lawyers have warned MPs that measures proposed in the Charities (Protection and Social Investment) Bill could threaten the independence of charities.
The Charity leaders body Acevo, the Charity Finance Group, the training and publishing charity the Directory of Social Change and the charity law firm Bates Wells Braithwaite have written a joint letter to MPs before the bill’s second reading in the House of Commons on Thursday.
The bill would give the commission new powers, including the ability to issue official warnings to charities, to automatically disqualify anyone with convictions for sexual or terrorism offences from becoming a trustee and to remove any trustee the commission judged "unfit".
The letter includes a list of 10 proposed amendments to the bill, which it urged MPs to consider putting forward and promoting among colleagues.
It says: "We are supportive of many of the provisions of the bill, but we have serious concerns that some of these new powers lack sufficient safeguards and threaten the independence of charities, and should therefore be amended or deleted."
The signatories warn that the commission "should not be able to act in a way which puts inappropriate pressure on charities" and say clear safeguards are needed.
They point to the recent High Court case in which the advocacy group Cage launched a judicial review against the commission after it asked the Joseph Rowntree Charitable Trust to promise it would never fund Cage again.
The Lord Chief Justice, Lord Thomas, who oversaw the case, said the commission could be seen to have "behaved in an extremely high-handed manner". The case was withdrawn by Cage after the regulator acknowledged that it had no power to forbid charities to fund organisations.
The signatories to the joint letter say they have "serious concerns" about the proposed power to issue statutory warnings because it includes no right of appeal, but failure to comply with instructions in a warning could lead to a statutory inquiry.
The amendments suggested in the letter include introducing a right of appeal to the charity tribunal against a statutory warning and removal of the power to publish a warning or, if it is published, ensuring that the charity is not identified.
The organisations also propose a minimum 28 days’ notice before a warning is served and call for the legislation to make it clear that the commission cannot use warnings to direct trustees or fetter their discretion.
The letter argues that a warning should not be automatically linked to trustees being removed or suspended if they are found not to have complied with it after a statutory investigation, and that a warning should expire after an inquiry has taken place.
Commenting on the letter, Sir Stephen Bubb, chief executive of Acevo, said: "We have already seen just what power the commission has tried to gather to itself under existing legislation.
"To date it has been subject to some checks and balances, but as this bill stands it would give the commission, and the individuals in it, carte blanche to pursue agendas they were never meant to adopt – nor, indeed, should. MPs must revise this bill."
The letter calls for removal of the provision for automatic disqualification of any trustee who has convictions for sex offences. It says the proposed power to disqualify trustees whose past or present conduct could be damaging to public trust and confidence in charities should also be removed.
Jay Kennedy, director of policy and research at the DSC, said: "The proposed discretionary power to disqualify is not a minor detail in the charities bill – it actually represents a fundamental shift in power between the state, in the form of the regulator, and civil society."
He said the power was so broad that it meant the commission could, in effect, disqualify someone from being a trustee regardless of whether they had been found guilty of any crime or wrongdoing.
"We understand the reasons the commission wants this power – to deal with a handful of tricky enforcement cases – but ultimately such a fundamental shift is not in the interest of a free and liberal society or the charity sector at large."
A commission spokeswoman said: "Our general position is that we believe the current provisions strike the right balance between ensuring appropriate safeguards, without significantly inhibiting the use of the powers when needed."