Examination of Witnesses (Questions 120-139)
MR JOHN
STOKER AND
MR SIMON
GILLESPIE
WEDNESDAY 28 NOVEMBER 2001
120. I am very happy to leave that there. I
take it that you will inform me of the conclusions?
(Mr Gillespie) Yes indeed. I do not think I gave you
an absolute commitment to tell you within a particular time. We
have not had the answers in and I have not been a position to
answer your concerns.
121. That is the absolutely fine. As long as
it is followed up, I am very happy. Can I also pursue another
issue and I am not sure which of you it is best to pursue this
with, perhaps you can pick and choose among yourselves. Charitable
status confers on any organisation very distinct benefits, one
of which of course is their reduction in local taxation for any
properties that they might hold. What investigations or what correlation
do you have with the local authority revenue and benefits departments
whereby you are notified by them of those organisations which
are claiming council tax relief on the basis of their charitable
status? Is that something which you do have correspondence with
revenue and other departments on?
(Mr Gillespie) We approach it from the other way round.
Local authorities are aware obviously of the discount, for want
of a better expression, that can be obtained by charities. The
information on the registration details of charities is available
on our web site. The vast majority of local authorities access
the information on the web site to check out whether an organisation
is legitimate or not, ie, whether it is registered. We have had
a number of cases where councils have approached us to check the
bona fides of particular organisations and we have responded
to those on a case-by-case basis.
122. One of the things that I have had specific
cases of is groups claiming that the property is owned by the
charity when in fact, on further investigation, the charity claims
to know nothing about that property whatsoever. Given that on
the returns submitted by companies to you I presume it is evident
what assets those charities have, is there a way for local authorities
to check off your web site about the properties?
(Mr Gillespie) No, and I do not think that will be
ever be the case, not in the foreseeable future, on a property-by-property
basis because the requirements are for a statement of general
assets rather than a listing of a register of assets to be disclosed.
That information is available from each charity, it is legitimately
able to be disclosed to local authorities and should be disclosed.
123. The obvious problem is that somebody applies
stating that they are a charity when in fact they may not be and
local authorities can check it out on the web site and say, "This
charity exists, therefore we will give them the charitable status",
but on further investigation it can then be found to be wrong.
(Mr Gillespie) This is an issue for the local authority.
We provide baseline information which is available to them. It
gives the address of the charity, for example, for them to contact.
Mr Gardiner: I am not trying to bring you to
book for the fraudulent practices of various property owners.
What I am trying to suggest is perhaps there should be a way for
local authorities and yourselves engaging more closely and co-operating
more closely to avoid such instances.
Chairman
124. In answer to Mr Gardiner, Mr Stoker, who
asked how else can a charity seek to close down except by approaching
you, you said that that is not necessarily the only way. Are you
going to do a note to us on that point? I did not quite understand
your answer.
(Mr Stoker) The point is that charities sometimes
do have the power to wind up so that what happens is that they
wind up under powers they have got and basically they tell us.
So the path to winding up is not necessarily through coming through
us and asking our permission to do so.
Chairman: Thank you. Do you want to come back,
Mr Gardiner?
Mr Gardiner: I am sure the note will be full
and very clear.
Chairman: Mr Richard Bacon?
Mr Bacon
125. Thank you, Chairman. Mr Stoker, when I
first started looking at this I started off with that document
and presumably when you first became boss of the Charity Commission
you took that document, and did you not then treat it as a laundry
list of things that should be a top priority to you?
(Mr Stoker) I did yes.
126. When you said you are a highly quantified
organisation, my colleague was astonished that you have got these
powers. I am not familiar with the debate that led to that but
presumably the 1993 Charities Act did not come out of the blue,
it presumably came out of a response to pressure for the Charity
Commission to have more powers. The Act came in in 1993, you took
over two years ago so you were aware of that Act, aware of the
extra powers and aware of the document that said not only, as
Mr Osborne pointed out at the beginning, that a lack of meeting
existing targets shows a lack of management grip but there are
specific references in here to the slow progress made in using
the powers. Paragraph 55, the Commission's powers were only used
in a small proportion of cases. I cannot find the exact quote,
it is there somewhere. The point is that the need to use the enforcement
powers that were available is clearly flagged up. I am puzzled
given this was your laundry list and you are an extremely quantified
organisation that it was not something that you picked up.
(Mr Stoker) I think the question is why was it important
to use those powers and the answer was to get better performance
on investigations, so approaching that objective in the round,
the way I did it was, first of all, to look at resources and there
are substantial extra resources; to look at management, and we
had a review and we changed the way that we managed it, and we
put clear desk instructions in place that met the concerns that
are referred to specifically.
127. Desk instructions?
(Mr Stoker) Desk instructions.
128. What is a desk instruction?
(Mr Stoker) This is a manual for investigations officers
telling them what they have got to do at various points. It tells
them how to select, how to manage, how to plan, how to close,
how to follow-up investigations. On top of that there are substantial
extra resources going in next year. There is the fact that in
2000-01 we did for the first time hit the targets of closing more
investigations quickly, 75 per cent within 12 months, and we have
also got, compared with 1996-97, a proportion of inquiries which
are establishing causes for concern up from 76 per cent to 90
per cent. So that really was the outline of my response to the
issue which I took to be the broad one of how do we get a better
all round position on investigations.
129. We have got here in paragraph 17: "We
urge the Commission to show more drive in exploiting the opportunities
to achieve greater effectiveness for which the 1993 legislation
provides." Here four years later we have got in 2.15: "Given
that weaknesses were substantiated in 191 inquiries in 2000-01
and that 53 took more than 12 months to resolve a more assertive
use of powers might have been expected." You mention various
reasons for not using the powers. It is not because of the management
messages so you have obviously been putting out the stuff. But
is not part of management doing more than putting out messages
and ensuring follow through and that something is done?
(Mr Stoker) That is why we have got the project that
has been put in place to follow through the changes we put into
the management of investigations to analyse what is actually happening
to ensure that the changes that we have written into the new arrangements
are being followed through and to understand better what is happening.
I am not in any way reluctant to see greater use of these powers
where they can actually solve problems and close down investigations.
130. Can I raise another issue mentioned both
in the report from four years ago and in this one, and that is
the issue of trustees and selecting trustees and the scrutiny
that goes on. The Committee of Public Accounts Report four years
ago said that the Commission was not making full use of information
on unsuitable trustees, this is paragraph 23 xi, and standard
procedures were not in place to check prospective trustees of
newly registering charities against the records of unsuitable
trustees. Standard procedures were not in place. When you turn
to this four years later you find in paragraph 3.11: "The
... Commission has not yet issued guidance on the subject"—that
is of who should be suitable to act as trustees—"The
Commission plans to do so once it has finished consulting on what
information it should gather on individual trustees." Four
years ago it was pointed out that you were not making full use
of information on unsuitable trustees and standard procedures
were not in place and four years later we are still waiting for
guidance so people know what they should be looking for. I fully
understand the point you made that the Commission expects charities
themselves to operate checks and standards to ensure that all
new appointees are suitable to act as trustees. Plainly you cannot
do all of that yourselves, just like companies to some extent
should be making sure they have got good directors. I fully understand
that. Nonetheless they cannot do it as easily as they might be
able to unless they have got some sort of standard guidance, and
four years later you still have not issued any.
(Mr Stoker) With respect, the first part of that question
was about the arrangements that we had in place, standard procedures
for ourselves in the Commission checking the position of trustees
who were going to be appointed to newly registering charities.
Is that correct?
131. Just reading from here, this is Paragraph
3.11, "The Commission plans to do so"—that is
issue guidance on the subject—"once it has finished
consulting on what information it should gather on individual
trustees ..."
(Mr Stoker) That is about the appointment of trustees
to existing charities.
132. Whether it is an existing or a new one
surely there is a suitable laundry list of people whose characteristics
you would not want as trustees? You would not want murderers,
thieves paedophiles. It would not take that long to draw up a
laundry list.
(Mr Stoker) There is a laundry list at the moment
for existing charities. What we do accept is it is not brought
together conveniently in a way which would be most useful to charities
which are appointing trustees. With respect, the answer to the
first part of your question is that the standard procedures for
checking trustees who were to be appointed to newly registering
charities, which the Committee criticised the Commission for not
having in place in 1997, are now in place. One of the things that
the NAO Report acknowledges is that there has been a good deal
of advance on the rigour of the procedures that the Commission
uses to scrutinise applicants for registration at the point of
registration including trustee checks.
133. Perhaps I could take up the question of
case two for a minute. Mr Osborne raised this a minute ago. This
talks about a case under investigation that ran for nearly three
years without clear objectives and planning. You mentioned that
you did not have clear risk assessment guidelines in place and
I know you started your remarks at the beginning by saying you
are putting more focus on risk. It also says in relation to case
two: "The Commission apologises to the charity because it
had not informed the charity that an inquiry had been opened."
Whatever set of standard procedures one had in place would that
not be a rather obvious one, to have to tell them that they were
being investigated?
(Mr Stoker) It might not always be appropriate if
the knowledge that they were being investigated might lead them
to do something which would get round the purpose for which they
were being investigated.
134. In this particular case you were relying
exclusively on the word of the Chief Executive and did not meet
with the trustees and other key stakeholders.
(Mr Stoker) I am certainly not defending this as a
well-handled case in this or in other respects.
135. That is a relief. I wanted to ask you about
training. It says in 2.11 that inquiries carried out by more experienced
staff were generally better planned, better scoped and better
carried out inquiries, and there is a need for closer supervision
of less experienced staff. What training and supervision is in
place right now in order to ensure that that experience is passed
on?
(Mr Stoker) There is extensive training. There has
been training specifically carried out to introduce investigations
staff to the new procedures to make sure they understand them
and the need to implement them. There is also a good deal of on-the-job
training which takes place in the management line between skilled
investigators and less experienced investigators. Levels of experience
are a factor taken specifically into account in instructions about
how investigations are to be selected and allocated at different
levels within the grading of the Department, and the Commission
is, in fact, a very extensive and very committed training organisation.
We have been reaccredited as an `Investor in People' for a further
three years on the basis of what was supposed to be a 18-month
mid-term assessment.
136. How many staff have you got devoted to
investigations?
(Mr Stoker) I would need to check the number.
137. Figure 5 on Page 13 says there are 51 based
in London, Liverpool and Taunton. Is that 51 figure accurate?
(Mr Stoker) That figure is out of date. The figure
would be slightly higher and of course it will get higher again
when the money from the 2000 Comprehensive Spending Review comes
on stream in March next year.
138. How much money do you have altogether?
(Mr Stoker) £21 million.
139. I thought I heard you say that and wrote
that down. How many staff do you have altogether?
(Mr Stoker) At the time of this report it was 547.
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