NCVO Pointers on PASC Review of Charity Act

  • NCVO have released some key pointers to help understand the inquiry in to the Charity Act.

    The report on the implementation of the Charities Act 2006 says the Charity Commission is being asked to do too much, with too little.

    The charitable sector is at the heart of UK society, involving millions of people and £9.3 billion received in donations in 2011/2012. Around 25 new applications for charitable status are received by the Charity Commission every working day.

    Summary of the PASC report on the state of the legislation that regulates charities and their charitable status says that:

    • one of the keys tests set by the Charities Act 2006 for determining charitable status-the public benefit test-is "critically flawed";
    • the Government should revise the statutory objectives for the Charity Commission, to allow the Commission to focus its limited resources on regulating the sector;
    • the proposal to increase the financial threshold for compulsory registration of a charity with the Charity Commission should be rejected;
    • charities should publish their spending on campaigning and political activity.

    NCVO have given a brief summary to help understand the report released by the Public Administration Select Committee (PASC).

    Public benefit: Possibly the most significant part of the report. Whereas currently charities are required to demonstrate that they provide a public benefit, the report suggests that a presumption of public benefit should be re-instated. (Although this is slightly unclear, as the Upper Tribunal has clarified that there was never a presumption in the first place.) It also suggests a greater role for parliament in defining public benefit.

    Charity Commission: the report recommends revising the Commission's statutory objectives, to ensure it can focus on regulation. We agree that the Commission's regulatory role must be its core focus. While greater clarity on this may be welcome, this must not be an excuse to curtail the Commission's powers.

    Registration threshold: the Committee does not propose raising the current threshold.

    Charges: the Committee rejects the idea of introducing charges for registration or submission of annual accounts.

    Penalties: the Committee supports Lord Hodgson's proposal that the Charity Commission should introduce some form of penalty for late filing of accounts.

    Payment of trustees: the Committee shares NCVO's view that voluntary trusteeship is a key pillar of our sector, and that as a matter of principle trustees should not be paid.

    Campaigning: we were a bit concerned about what the report would say here, especially considering the strong views expressed by some members of the Committee during the evidence sessions. While giving perhaps a little bit too much attention to those who think charity campaigning should be restricted, it is reassuring that the report recognises that the current rules on charity campaigning are fit for purpose and should not be tinkered with.


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