Under questioning by MPs, Lord Hodgson has defended his recommendation to allow large charities to pay their trustees without consent from the Charity Commission.
The Conservative peer’s review of the Charities Act 2006, published in July, recommended that all charities with annual incomes of more than £1m should be able to pay their trustees without getting permission from the Charity Commission, as they are currently required to do.
Appearing this morning before MPs on the Public Administration Select Committee this morning, Hodgson said larger charities were "big businesses" and that it was right to allow such organisations to pay trustees in order to get the right people and that trustees should be encouraged to use their judgement.
The hearing is part of the committee’s inquiry into the implementation and operation of the Charities Act 2006.
David Heyes, the Labour MP for Ashton-under-Lyne, asked Hodgson if he felt there was a risk the measure would encourage a "pull" of trustees to larger charities.
Hodgson responded by saying mistakes would be made but that the principle of trustee judgement remained. "Instead of trying to think of cases where things could go wrong, accept that there will be mistakes but that we are trying to find ways to free up people to use their judgement – not to have to go to the Charity Commission but make a decision and stick by it," he said.
Heyes asked Hodgson why he did not feel that all charities should have the right to pay trustees without the regulator’s consent. Hodgson said that paying trustees was potentially a more significant issue for charities on smaller incomes because payment would represent a larger proportion of their total income.
For this reason, he said, it was right that these charities should still seek permission from the Charity Commission before paying.
"Small charities should still have to make that application [to the commission] for reasons of conflict and reasons of transparency."
Hodgson also told MPs on the committee that statutory regulation for face-to-face fundraising would be too costly to implement.