STRATEGY UNIT REPORT: Charities delighted, but want to debate details

Voluntary organisations last week welcomed the long-awaited review of charity law from the Cabinet Office Strategy Unit. But there was caution over the possibility of increased costs and administration for bigger charities.

NCVO was delighted at a new list of 10 charitable purposes, coupled with a "long overdue

public benefit test for organisations to qualify for charitable status. It immediately started a campaign to get the changes into a new Charities Bill for the 2003 Queen's speech.

Equally over the moon was the Directory of Social Change, which said: "The fact that many charities have not been 'charitable' at all in the usual sense has been a blight on the sector.

In particular, organisations that charge high fees for their services, such as private schools and hospitals, will have to demonstrate their public benefit if they want charitable status.

WCVA, the umbrella body for charities in Wales, was particularly welcoming of measures to let charities trade more freely and to be more entrepreneurial.

The Government is allowing the rest of this year for consultation, and meetings are to be held around the country to hear the views of the sector and the public.

Although the report has been broadly welcomed, charities and umbrella organisations will try to change the Government's mind on a number of points. The Institute of Fundraising is worried about the possibility of an increased administrative burden on organisations that carry out house-to-house collections. Another suggestion likely to come in for robust debate is one for a new independent body to regulate fundraising (see article below).

Small community organisations will be relieved to be freed from the shackles of over-regulation, said David Tyler, director of umbrella body Community Matters.

"This is a revolution for smaller charities which have been hugely over-regulated, especially the multi-purpose ones, and especially those that trade,

he said.

Between 90 and 100,000 charities with income under £10,000 a year will no longer have to bother with Charity Commission registration. Instead, they will be able to register with the Inland Revenue if they want a charity number.

One note of criticism came from the Charity Tax Reform Group. It thought the Government had missed an opportunity to ease the burden of taxation on charities, particularly VAT.

"There is a need for simplification and cutting the cost of compliance, as well as lifting the financial burden,

said Nick Kavanagh, chairman of the group and finance director of Save the Children.

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