Clause 56: Withdrawal of, or addition or variation of conditions in, certificates

215.     Subsection (1) of this clause enables the Charity Commission to withdraw, or suspend a public collections certificate, or attach or vary conditions to such a certificate in force, where subsection (2), (3) or (4) applies. Subsection (6) clarifies that the Commission's exercise of its powers in subsection (1) does not prevent the Commission from exercising the powers on subsequent occasions, taking account of any conditions it had previously applied to a certificate. The service of notice of a decision, including the provision of reasons and notice of the right of appeal is provided for in subsections (7) and (8).

216.     Subsection (10) provides that a decision by the Commission under subsection (1) to withdraw or suspend a certificate, or add conditions or vary such conditions, will not take effect until the time for bringing an appeal has expired, or if an appeal is brought, until its conclusion. However, subsection (9) enables the Commission to exercise its powers under subsection (1) with immediate effect where it considers it is in the public interest to do so.

217.     Subsection (11) provides that a suspension under subsection (1) shall, subject to any appeal or withdrawal of the certificate, be for no longer than six months, unless the Commission decides sooner to remove the suspension.

Clause 57: Appeals against decisions of the Commission

218.     This clause sets out the rights of appeal against Charity Commission decisions relating to public collections certificates.

219.     Subsection (1) specifies the right of appeal for applicants. Subsections (2) and (3) set out the rights of appeal for certificate holders. The Lord Chancellor's rules for the Tribunal will set out the period within which these rights of appeal may be exercised following the Charity Commission's service of the relevant notification on the person in question. Subsection (4) provides for the Attorney General to appeal to the tribunal against a decision of the Commission. Subsections (5), (6) and (7) provide for the decisions that the Tribunal may make in respect of such appeals.

Clause 58: Applications for permits to conduct public charitable collections in a public place

220.     This clause sets out the process for applications to local authorities for a permit to conduct a collection in a public place. It builds upon the provisions of section 67 of the 1992 Act. Subsection (1) clarifies that promoters of exempt collections as defined in clause 50 do not need to apply for a permit. Likewise a permit is not required for door to door collections, as these are less likely to lead to undue inconvenience to members of the public. Otherwise all collections in a public place require an application for a permit to the local authority in which the collection is proposed to take place. Subsection (3) sets out the information required on the application, some of which will be prescribed in regulations. Subsection (2) sets out the applications process, the timetable for which will be prescribed in regulations. Subsection (4) makes provision for urgent permit applications outside the prescribed period in circumstances where either the public collections certificate application has not been determined by the end of the permit application period, or where it has been determined but with insufficient time for a permit application to be made within the prescribed period.

Clause 59: Determination of applications and issue of permits

221.     This clause builds on the provisions in section 68 of the 1992 Act. It defines the process for local authorities determining and issuing permits to collect in a public place. Subsection (1) provides for the local authority within a prescribed period to issue a permit, or refuse to issue a permit on the grounds of capacity set out in clause 60. Subsection (2) provides for the date(s) of collection(s). Subsection (3) enables local authorities to attach conditions to a permit. The types of conditions that local authorities can apply are limited to those within paragraphs (a) to (d) of subsection (3). Subsection (4) provides that any condition attached to a permit must be consistent with regulations made under clause 63. Subsections (5) and (6) provide for service of notice of the local authority's decision, and the right of appeal to the magistrates' court against it conferred by clause 62.

Clause 60: Refusal of permits

222.     This clause builds on section 69(1)(a) and (b), and 69(2) of the 1992 Act. It sets out, in subsection (1), the ground that local authorities may rely on to refuse to award a permit to conduct a collection in a public place, which is that allowing the collection to go ahead would cause undue inconvenience to members of the public, due to the reasons set out in paragraphs (a) to (d). Subsection (2) enables the local authority to have regard to collections that have already been authorised in determining whether the proposed collection would cause undue inconvenience. Subsection (3) precludes local authorities having regard under subsection (2) to collections which take place in one location on land to which the public has access by virtue of the owner's permission or any enactment, and where the occupier consents to the collections. Subsection (4) clarifies which existing authorised collections local authorities can consider in considering whether to grant or refuse a permit.

Clause 61: Withdrawal or variation etc. of permits

223.     This clause is based on the provisions of section 70 of the 1992 Act, with the addition of subsections (4) and (6). Subsection (1) enables a local authority to withdraw a permit, or attach or vary conditions to a permit, on the grounds specified in subsections (2), (3), or (4). Subsection (6) clarifies that the local authority's exercise of its powers does not prevent it from exercising the powers on subsequent occasions, taking account of any conditions it had previously attached or varied.

224.     Subsections (7) and (8) provide for service of notice of a local authority's decision, and the appeal rights conferred by clause 62(3). Subsection (9) requires local authorities to notify the Charity Commission of a withdrawal of a permit. Subsection (10) provides that where a local authority withdraws or attaches or varies the conditions on a permit in force, the decision would not take effect until the time limit for bringing an appeal expired or the appeal concluded.

Clause 62: Appeals against decisions of local authority

225.     This clause sets out, in subsections (1), (2), and (3) the rights of appeal to magistrates' courts against local authority decisions. It builds on the provisions of section 71 of the 1992 Act.

226.     Subsections (4) and (5) clarify that the proceedings are subject to the Magistrates' Courts Act 1980, and set out the timetable for the appeal. Subsection (6) provides for an appeal against the decision of the magistrates' court to the Crown Court. Subsections (7) and (8) provide the remedies available to the magistrates' court or the Crown Court in such appeals. Subsection (9) places a local authority under a duty to comply with the directions of the court, although in the case of directions given by the magistrates' court this is stayed until the time for bringing an appeal to the Crown Court has expired, or any appeal before the Crown Court has been concluded.

Clause 63: Regulations

227.     Subsections (1) to (3) of this clause contains provision, similar to section 73 of the 1992 Act, for the regulations which the Secretary of State may make in relation to public charitable collections. Subsection (5) enables the regulations made under this clause to provide that failure to comply with a specified provision of the regulations be an offence, with a maximum penalty of a level 2 fine (£500) for the offence. Subsection (6) requires consultation prior the making of regulations under this clause.

Clause 64: Offences

228.     This clause provides for the same offences as section 74 of the 1992 Act in respect of charitable collections. Subsection (2) of this clause is wider than that of the 1992 Act, as it includes the different types of applications and notifications proposed in the Bill. The maximum penalty of a level 5 fine (£5,000) provided for by subsection (3) of this clause is higher than the corresponding maximum penalties in section 74 of the 1992 Act.

Clause 65: Offences by bodies corporate

229.     This clause reflects section 75 of the 1992 Act, for the purposes of this Chapter and regulations made under it. It clarifies the circumstances in which officers of corporate bodies, as well as the corporate body itself, are guilty of an offence.

Clause 66: Service of documents

230.     This clause reflects section 76 of the 1992 Act, for the purposes of this Chapter. It specifies the requirements for serving notices to persons or corporate bodies under this Chapter. In the case of a person other than a body corporate, these include delivering it to the person, leaving it at his last known address in the UK, or posting it to him at that address. A notice may be served on a body corporate by delivering or sending it to the registered or principal office in the UK, or if it does not have such an office in the UK, any place where it carries on its business. A person or corporate body may also notify a specific address for the service of notices under this Chapter.

Clause 67: Statements indicating benefits for charitable institutions and fund-raisers

231.     This clause amends section 60 of the 1992 Act.

232.     Subsections (2) and (3) read with subsection (5) amend sections 60(1)(c) and 60(2)(c) of the 1992 Act to require a professional fundraiser to state the amount of his remuneration in connection with an appeal; or, if that amount is not known at the time of the appeal, to give as accurate an estimate of the amount as is reasonably possible in the circumstances. Currently a professional fundraiser is required to state only in general terms the method by which his remuneration is determined, which has in practice been imprecise and has offered little assistance to those it was designed to help.

233.     Subsection (4) amends section 60(3)(c) of the Charities Act 1992, which requires a commercial participator to make a general statement outlining the method of determining the benefit to the charitable institution or institutions concerned. Subsection (4) substitutes for section 60(3)(c) a revised section 60(3)(c) which, when read with the amendment made by subsection (5), requires the statement to indicate:

• the amount (or an estimate of the amount if the amount is not known at the time) of the consideration given for goods or services sold or supplied by the commercial participator which is to be given to or applied for the benefit of the charitable institution or institutions concerned;

• the amount (or an estimate of the amount if the actual amount is not known at the time) of the proceeds of the promotional venture undertaken by a commercial participator which are to be given to or applied for the benefit of the charitable institution or institutions concerned;

• where an agreement with a commercial participator has been made authorising him to represent that charitable contributions are to be given to or applied for the benefit of the institution concerned, the statement would indicate the amount (or an estimate of the amount if the amount is not known at the time) of the sums given by way of donation in connection with the sale or supply of goods or services which are to be given to or applied for the benefit of the charitable institution or institutions concerned.

234.     Subsection (5) provides for a new subsection (3A) to be inserted after subsection (3) of section 60 of the 1992 Act. It provides that the notifiable amount of remuneration is the actual amount if that is known at the time of the statement, otherwise an estimated amount of the remuneration or sum, calculated as accurately as possible in all the circumstances.

Clause 68: Statements indicating benefits for charitable institutions and collectors

235.     This clause inserts new sections 60A and 60B into the 1992 Act. They provide that where paid employees, officers, or trustees of a charity or connected company are acting as collectors, they must make a statement when making appeals.

236.     New section 60A makes provision for collectors that are paid employees, officers, or trustees of a charity or connected company that are soliciting for a donation for a charitable institution or charitable, philanthropic or benevolent purpose.

237.     Subsection (4) of new section 60A provides the information that must be made in such a statement where the collector is soliciting for a donation for one or more specific charitable institutions. Subsection (5) provides the information that must be made where the collector is soliciting for a charitable, philanthropic, or benevolent purpose, rather than a specific institution. Home Office guidance will set out the appropriate forms of statements that could be used.

238.     Subsections (6) and (7) define those covered by this provision. Subsection (8) provides an offence for failure to comply with these provisions, along with a maximum penalty of a level 5 fine (£5,000). Subsection (9) applies the defence in s.60(8) of the 1992 Act, which refers to the taking of reasonable precautions and exercising due diligence.

239.     New section 60B provides an exclusion for lower-paid collectors from the requirements in section 60A. It is based on section 58(3) of the 1992 Act, which provides the same exclusion for lower-paid professional fundraisers. Subsections (2) and (5) specify the earnings limits. Subsection (6) provides an order-making power for the Secretary of State to vary the earnings limits in this section.

Clause 69: Reserve power to control fund-raising by charitable institutions

240.     The Government accepted the Strategy Unit recommendation that a self-regulatory initiative should be established based on a new voluntary Code of Practice which would promote and raise awareness of good practice in fundraising. The Institute of Fundraising sponsored an independent Commission ("The Buse Commission") to explore different models for a system of self-regulation, to consult and recommend a preferred model. Proposals for the scheme were published early in 2005, with the scheme expected to be launched in 2006. The Government believes that self-regulation should be the first resort in improving fundraising standards and practices. The advantage of self-regulation in that area is that fundraising organisations would be centrally involved in devising and implementing regulation and would be more committed to it. However, the Secretary of State would retain the power to impose statutory regulation should self-regulation prove to be ineffective and clause 67 empowers the Secretary of State to do that. On 14 March 2005 the Government published a consultation paper on the principles for assessing the success of the self-regulation of fundraising. The consultation has now closed, but copies of the consultation paper are available on the Home Office website at www.communities.homeoffice.gov.uk/activecomms/charity-reg/reg-pub-chartable-collect/. The Government will make an announcement on the criteria that will be used to assess the success of self-regulation shortly.

241.      Subsection (1) of this clause confers a new power on the Secretary of State by inserting a new section 64A into the 1992 Act. The power is to make regulations to control charity fundraising (defined in new section 64A(2)) if the Secretary of State deems it necessary or desirable. In particular, the regulations may impose a good practice requirement on persons managing charitable institutions (in charities those persons are the charity trustees). Such regulations would be subject to the affirmative resolution procedure.

242.     Subsections (4) and (5) of new section 64A, read together, define the good practice requirement. The power enables, under subsection (6) the regulations to provide that persistent failure to comply with the regulations constitutes an offence the penalty for which, on summary conviction, is a fine not exceeding level 2 on the standard scale (£500).

Clause 70: Power of the Secretary of State to give financial assistance to charitable, benevolent or philanthropic institutions

243.     This clause gives the Secretary of State an express statutory power to give financial assistance to organisations that are established for charitable, benevolent or philanthropic purposes rather than relying on the annual Appropriation Act. This power extends only to funding activities which benefit the whole or any part of England. Government funding of similar organisations operating in Wales is devolved to the National Assembly for Wales (see clause 71).

244.     Under clause 68 the Secretary of State may give financial assistance in any form (subsection (2)). Such assistance may be given subject to terms and conditions (subsections (3) and (4)). The Secretary of State may delegate his functions under this clause (subsections (6) and (7)). He must report annually on his exercise of the power conferred by this clause (subsections (8) and (9)).

Clause 71: Power of the National Assembly for Wales to give financial assistance to non-profit organisations

245.     This clause gives the National Assembly for Wales an express statutory power to give financial assistance to organisations that are established for charitable, benevolent or philanthropic purposes. This power extends to funding activities which directly or indirectly benefit the whole or part of Wales.

246.     Under clause 71 the Assembly may give financial assistance in any form (subsection (2)). Such assistance may be given subject to terms and conditions (subsections (3) and (4)). The Assembly may delegate their functions under this clause (subsections (6) and (7)).

247.     The Assembly must report annually on the exercise of the power under this clause (subsection (8)).

Clause 72: Report on the operation of this Act

248.     Clause 72 gives statutory effect to the Government's undertaking to carry out an independent review of the operation of the Bill five years after Royal Assent, as recommended by the Joint Committee on the draft Charities Bill ⁸ (subsection (1)).

⁸ The Joint Committee's report is available at http://www.publications.parliament.uk/pa/jt/jtchar.htm

249.     Subsection (2) sets out particular matters that the review must address. The reviewer must compile a report of his conclusions (subsection (3)), and the Secretary of State must lay a copy of the report before Parliament (subsection (4)).

Clause 73: Orders and regulations

250.     The Bill contains a number of provisions giving the Secretary of State power to make orders and regulations. Clause 73 applies to any orders and regulations the Secretary of State makes under the Bill.

251.     Subsection (2) is a common-form provision setting out matters for which orders or regulations may provide.

252.     Subsections (3) to (5) distinguish between regulations which are subject to the "negative resolution" procedure and those which are subject to "affirmative resolution". The distinction is essentially that "negative resolution" regulations take effect as soon as they are made, but can be cancelled if Parliament passes a resolution striking them down, while "affirmative resolution" regulations need a positive resolution from Parliament to bring them into effect. Regulations and orders made under powers listed in paragraphs (a) to (d) of subsection (4) require the "affirmative resolution" procedure; all other orders and regulations except for commencement orders made under clause 77, are to be made by the "negative resolution" procedure.

Clause 74: Amendments, repeals and transitional provisions

253.     Subsections (4) and (5) of this clause are standard provisions in many Bills, giving the Secretary of State an order-making power which allows him to make supplementary etc provision for the purposes of this Bill or for giving full effect to it. An order under subsection (4) may modify any "enactment", which includes both primary and secondary legislation.

Clause 75: Pre-consolidation amendments

254.      This clause provides the Secretary of State with an order-making power to facilitate the consolidation of charities legislation in whole or in part. Subsection (1) specifies the power. Subsections (2), (3) and (4) provide for the timing for such an order to come into force, and limit the use of this power so that it may not be re-exercised once an order made under this clause has come into force.

Clause 76: Interpretation

255.     This clause supplies the meaning of various words and phrases where used in this Bill.

Clause 77: Commencement

256.     Subsection (1) brings this clause, and the other provisions listed in this subsection, into effect on the date the Bill receives the Royal Assent. Subsection (2) provides for the remainder of the Bill to be brought into force by order - known as a commencement order - made by the Secretary of State. Subsection (3) allows him to make commencement orders bringing different provisions of the Bill into force on different dates.

Clause 78: Short title and extent

257.     All provisions in the Bill extend to England and Wales. Subsection (3) specifies which provisions of this Bill also extend to both Scotland and Northern Ireland. Subsection (4) specifies the one provision of the Bill that also extends to Northern Ireland but does not extend to Scotland.

FINANCIAL EFFECTS OF THE BILL

258.     The main impact for the implementation of this legislation will be on the Charity Commission. There will be costs for the Department for Constitutional Affairs in setting up and operating the Charity Tribunal, and for magistrates' courts appeals, for principal regulators of exempt charities in monitoring compliance with charity law, and local authorities in Greater London taking on a new role in licensing public charitable collections. The regulatory impact assessment provides details of these costs, and how they have been calculated. The Home Office will meet the costs of implementation, other than the Charity Commission's costs.

259.     One-off costs:

• Establishing the Charity Tribunal estimated at £145,000.

• Charity Commission costs of establishing its public collections certificate licensing operation, and issuing certificates in advance of the scheme commencing as between £4.3m and £7.4m dependent on volumes of applications and their complexity.

• Costs to the Charity Commission of the proposals for exempt charities, between £546,000 and £1,014,000.

• Costs to the Charity Commission of the proposals for excepted charities, between £350,000 and £650,000.

260.     Continuing costs:

• Charity Commission costs resulting from changes to the Commission estimated at £431,000.

• Charity Tribunal costs estimated as between £700,000 and £1.4m dependent on case volumes and complexity.

• Charity Commission costs of processing appeals between £444,000 and £602,400 dependent on case volumes and complexity.

• Charity Commission operation of public collections certificate licensing as between £2.7m and £8.5m, dependent on volumes of applications and their complexity.

• Costs to London Boroughs of taking on their function in issuing permits for public charitable collections, up to £94,000.

• Costs to magistrates' courts of appeals against local authority licensing decisions, up to £10,500.

• Costs of principal regulators of exempt charities, between £19,820 and £68,360.

• Costs to the Charity Commission of the proposals for exempt charities, between £220,000 and £408,500.

• Costs to the Charity Commission of the proposals for excepted charities, between £138,000 and £256,000.

EFFECTS OF THE BILL ON PUBLIC SERVICE MANPOWER

261.     There are two areas of the Bill which will impact on public service manpower.

• The first is in relation to the Charity Commission taking on the function of the authority issuing and monitoring public collections certificates. This is a new function for the Commission, which will require additional staff resources to carry it out. The number of additional staff will be dependent on the volume of applications and number of certificates in force. Further research is required into the likely number of applicants in order to provide an accurate estimate.

• The second is in relation to the establishment and operation of the Charity Tribunal, which will require administrative support in the Tribunals Service.