Charities Bill [HL]

House of Commons

Session 2005 - 06
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Other Bills before Parliament

Charities Bill [HL]

Charities Bill [HL]
Part 2 — Regulation of charities
Chapter 5 — Assistance and supervision of charities by court and Commission
22

Publicity relating to schemes
22
Relaxation of publicity requirements relating to schemes etc.
For section 20 of the 1993 Act substitute—
“20
Publicity relating to schemes
(1)
The Commission may not—
5
(a)
make any order under this Act to establish a scheme for the
administration of a charity, or
(b)
submit such a scheme to the court or the Secretary of State for
an order giving it effect,

unless, before doing so, the Commission has complied with the
10
publicity requirements in subsection (2) below.

This is subject to any disapplication of those requirements under
subsection (4) below.
(2)
The publicity requirements are—
(a)
that the Commission must give public notice of its proposals,
15
inviting representations to be made to it within a period
specified in the notice; and
(b)
that, in the case of a scheme relating to a local charity (other than
an ecclesiastical charity) in a parish or in a community in Wales,
the Commission must communicate a draft of the scheme to the
20
parish or community council (or, where a parish has no council,
to the chairman of the parish meeting).
(3)
The time when any such notice is given or any such communication
takes place is to be decided by the Commission.
(4)
The Commission may determine that either or both of the publicity
25
requirements is or are not to apply in relation to a particular scheme if
it is satisfied that—
(a)
by reason of the nature of the scheme, or
(b)
for any other reason,

compliance with the requirement or requirements is unnecessary.
30
(5)
Where the Commission gives public notice of any proposals under this
section, the Commission—
(a)
must take into account any representations made to it within
the period specified in the notice, and
(b)
may (without further notice) proceed with the proposals either
35
without modifications or with such modifications as it thinks
desirable.
(6)
Where the Commission makes an order under this Act to establish a
scheme for the administration of a charity, a copy of the order must be
available, for at least a month after the order is published, for public
40
inspection at all reasonable times—
(a)
at the Commission’s office, and
(b)
if the charity is a local charity, at some convenient place in the
area of the charity.

Paragraph (b) does not apply if the Commission is satisfied that for any
45
reason it is unnecessary for a copy of the scheme to be available locally.

Charities Bill [HL]
Part 2 — Regulation of charities
Chapter 5 — Assistance and supervision of charities by court and Commission
23

(7)
Any public notice of any proposals which is to be given under this
section—
(a)
is to contain such particulars of the proposals, or such directions
for obtaining information about them, as the Commission
thinks sufficient and appropriate, and
5
(b)
is to be given in such manner as the Commission thinks
sufficient and appropriate.
20A
Publicity for orders relating to trustees or other individuals
(1)
The Commission may not make any order under this Act to appoint,
discharge or remove a charity trustee or trustee for a charity, other
10
than—
(a)
an order relating to the official custodian, or
(b)
an order under section 18(1)(ii) above,

unless, before doing so, the Commission has complied with the
publicity requirement in subsection (2) below.
15

This is subject to any disapplication of that requirement under
subsection (4) below.
(2)
The publicity requirement is that the Commission must give public
notice of its proposals, inviting representations to be made to it within
a period specified in the notice.
20
(3)
The time when any such notice is given is to be decided by the
Commission.
(4)
The Commission may determine that the publicity requirement is not
to apply in relation to a particular order if it is satisfied that for any
reason compliance with the requirement is unnecessary.
25
(5)
Before the Commission makes an order under this Act to remove
without his consent—
(a)
a charity trustee or trustee for a charity, or
(b)
an officer, agent or employee of a charity,

the Commission must give him not less than one month’s notice of its
30
proposals, inviting representations to be made to it within a period
specified in the notice.

This does not apply if the person cannot be found or has no known
address in the United Kingdom.
(6)
Where the Commission gives notice of any proposals under this
35
section, the Commission—
(a)
must take into account any representations made to it within
the period specified in the notice, and
(b)
may (without further notice) proceed with the proposals either
without modifications or with such modifications as it thinks
40
desirable.
(7)
Any notice of any proposals which is to be given under this section—
(a)
is to contain such particulars of the proposals, or such directions
for obtaining information about them, as the Commission
thinks sufficient and appropriate, and
45
(b)
(in the case of a public notice) is to be given in such manner as
the Commission thinks sufficient and appropriate.

Charities Bill [HL]
Part 2 — Regulation of charities
Chapter 5 — Assistance and supervision of charities by court and Commission
24

(8)
Any notice to be given under subsection (5)—
(a)
may be given by post, and
(b)
if given by post, may be addressed to the recipient’s last known
address in the United Kingdom.”
Common investment schemes
5
23
Participation of Scottish and Northern Irish charities in common investment
schemes etc.
(1)
After section 24(3) of the 1993 Act (common investment schemes) insert—
“(3A)
A common investment scheme may provide for appropriate bodies to
be admitted to participate in the scheme (in addition to the
10
participating charities) to such extent as the trustees appointed to
manage the fund may determine.
(3B)
In this section “appropriate body” means—
(a)
a Scottish recognised body, or
(b)
a Northern Ireland charity,
15

and, in the application of the relevant provisions in relation to a scheme
which contains provisions authorised by subsection (3A) above,
“charity” includes an appropriate body.

“The relevant provisions” are subsections (1) and (4) to (6) and (in
relation only to a charity within paragraph (b)) subsection (7).”
20
(2)
In section 25(2) of that Act (application of provisions of section 24 to common
deposit funds) for “subsections (2) to (4)” substitute “subsections (2), (3) and
(4)”.
(3)
At the end of section 25 add—
“(4)
A common deposit scheme may provide for appropriate bodies to be
25
admitted to participate in the scheme (in addition to the participating
charities) to such extent as the trustees appointed to manage the fund
may determine.
(5)
In this section “appropriate body” means—
(a)
a Scottish recognised body, or
30
(b)
a Northern Ireland charity,

and, in the application of the relevant provisions in relation to a scheme
which contains provisions authorised by subsection (4) above,
“charity” includes an appropriate body.
(6)
“The relevant provisions” are—
35
(a)
subsection (1) above, and
(b)
subsections (4) and (6) of section 24 above, as they apply in
accordance with subsections (2) and (3) above, and
(c)
(in relation only to a charity within subsection (5)(b) above)
subsection (7) of that section, as it so applies.”
40

Charities Bill [HL]
Part 2 — Regulation of charities
Chapter 5 — Assistance and supervision of charities by court and Commission
25

(4)
After section 25 insert—
“25A
Meaning of “Scottish recognised body” and “Northern Ireland
charity” in sections 24 and 25
(1)
In sections 24 and 25 above “Scottish recognised body” means a body—
(a)
established under the law of Scotland, or
5
(b)
managed or controlled wholly or mainly in or from Scotland,

to which the Commissioners for Her Majesty’s Revenue and Customs
have given intimation, which has not subsequently been withdrawn,
that relief is due under section 505 of the Income and Corporation Taxes
Act 1988 in respect of income of the body which is applicable and
10
applied to charitable purposes only.
(2)
In those sections “Northern Ireland charity” means an institution which
is a charity under the law of Northern Ireland.”
(5)
In section 100(4) of the 1993 Act (provisions extending to Northern Ireland) for
“extends” substitute “and sections 24 to 25A extend”.
15
Advice or other assistance
24
Power to give advice and guidance
For section 29 of the 1993 Act substitute—
“29
Power to give advice and guidance
(1)
The Commission may, on the written application of any charity trustee
20
or trustee for a charity, give that person its opinion or advice in relation
to any matter—
(a)
relating to the performance of any duties of his, as such a
trustee, in relation to the charity concerned, or
(b)
otherwise relating to the proper administration of the charity.
25
(2)
A charity trustee or trustee for a charity who acts in accordance with
any opinion or advice given by the Commission under subsection (1)
above (whether to him or to another trustee) is to be taken, as regards
his responsibility for so acting, to have acted in accordance with his
trust.
30
(3)
But subsection (2) above does not apply to a person if, when so acting,
either—
(a)
he knows or has reasonable cause to suspect that the opinion or
advice was given in ignorance of material facts, or
(b)
a decision of the court has been obtained on the matter or
35
proceedings are pending to obtain one.
(4)
The Commission may, in connection with its second general function
mentioned in section 1C(2) above, give such advice or guidance with
respect to the administration of charities as it considers appropriate.
(5)
Any advice or guidance so given may relate to—
40
(a)
charities generally,
(b)
any class of charities, or
(c)
any particular charity,

Charities Bill [HL]
Part 2 — Regulation of charities
Chapter 5 — Assistance and supervision of charities by court and Commission
26


and may take such form, and be given in such manner, as the
Commission considers appropriate.”
25
Power to determine membership of charity
After section 29 of the 1993 Act (as substituted by section 24 of this Act) insert—
“29A
Power to determine membership of charity
5
(1)
The Commission may—
(a)
on the application of a charity, or
(b)
at any time after the institution of an inquiry under section 8
above with respect to a charity,

determine who are the members of the charity.
10
(2)
The Commission’s power under subsection (1) may also be exercised
by a person appointed by the Commission for the purpose.
(3)
In a case within subsection (1)(b) the Commission may, if it thinks fit,
so appoint the person appointed to conduct the inquiry.”
Powers of entry etc.
15
26
Power to enter premises and seize documents etc.
(1)
After section 31 of the 1993 Act insert—
“31A
Power to enter premises
(1)
A justice of the peace may issue a warrant under this section if satisfied,
on information given on oath by a member of the Commission’s staff,
20
that there are reasonable grounds for believing that each of the
conditions in subsection (2) below is satisfied.
(2)
The conditions are—
(a)
that an inquiry has been instituted under section 8 above;
(b)
that there is on the premises to be specified in the warrant any
25
document or information relevant to that inquiry which the
Commission could require to be produced or furnished under
section 9(1) above; and
(c)
that, if the Commission were to make an order requiring the
document or information to be so produced or furnished—
30
(i)
the order would not be complied with, or
(ii)
the document or information would be removed,
tampered with, concealed or destroyed.
(3)
A warrant under this section is a warrant authorising the member of the
Commission’s staff who is named in it—
35
(a)
to enter and search the premises specified in it;
(b)
to take such other persons with him as the Commission
considers are needed to assist him in doing anything that he is
authorised to do under the warrant;
(c)
to take possession of any documents which appear to fall within
40
subsection (2)(b) above, or to take any other steps which appear

Charities Bill [HL]
Part 2 — Regulation of charities
Chapter 5 — Assistance and supervision of charities by court and Commission
27

to be necessary for preserving, or preventing interference with,
any such documents;
(d)
to take possession of any computer disk or other electronic
storage device which appears to contain information falling
within subsection (2)(b), or information contained in a
5
document so falling, or to take any other steps which appear to
be necessary for preserving, or preventing interference with,
any such information;
(e)
to take copies of, or extracts from, any documents or
information falling within paragraph (c) or (d);
10
(f)
to require any person on the premises to provide an explanation
of any such document or information or to state where any such
documents or information may be found;
(g)
to require any such person to give him such assistance as he
may reasonably require for the taking of copies or extracts as
15
mentioned in paragraph (e) above.
(4)
Entry and search under such a warrant must be at a reasonable hour
and within one month of the date of its issue.
(5)
The member of the Commission’s staff who is authorised under such a
warrant (“the authorised person”) must, if required to do so, produce—
20
(a)
the warrant, and
(b)
documentary evidence that he is a member of the Commission’s
staff,

for inspection by the occupier of the premises or anyone acting on his
behalf.
25
(6)
The authorised person must make a written record of—
(a)
the date and time of his entry on the premises;
(b)
the number of persons (if any) who accompanied him onto the
premises, and the names of any such persons;
(c)
the period for which he (and any such persons) remained on the
30
premises;
(d)
what he (and any such persons) did while on the premises; and
(e)
any document or device of which he took possession while
there.
(7)
If required to do so, the authorised person must give a copy of the
35
record to the occupier of the premises or someone acting on his behalf.
(8)
Unless it is not reasonably practicable to do so, the authorised person
must comply with the following requirements before leaving the
premises, namely—
(a)
the requirements of subsection (6), and
40
(b)
any requirement made under subsection (7) before he leaves the
premises.
(9)
Where possession of any document or device is taken under this
section—
(a)
the document may be retained for so long as the Commission
45
considers that it is necessary to retain it (rather than a copy of it)
for the purposes of the relevant inquiry under section 8 above,
or

Charities Bill [HL]
Part 2 — Regulation of charities
Chapter 5 — Assistance and supervision of charities by court and Commission
28

(b)
the device may be retained for so long as the Commission
considers that it is necessary to retain it for the purposes of that
inquiry,

as the case may be.
(10)
Once it appears to the Commission that the retention of any document
5
or device has ceased to be so necessary, it shall arrange for the
document or device to be returned as soon as is reasonably
practicable—
(a)
to the person from whose possession it was taken, or
(b)
to any of the charity trustees of the charity to which it belonged
10
or related.
(11)
A person who intentionally obstructs the exercise of any rights
conferred by a warrant under this section is guilty of an offence and
liable on summary conviction—
(a)
to imprisonment for a term not exceeding 51 weeks, or
15
(b)
to a fine not exceeding level 5 on the standard scale,

or to both.”
(2)
In Part 1 of Schedule 1 to the Criminal Justice and Police Act 2001 (c. 16)
(powers of seizure to which section 50 applies), after paragraph 56 insert—
“Charities Act 1993 (c. 10)
20
56A
The power of seizure conferred by section 31A(3) of the Charities Act
1993 (seizure of material for the purposes of an inquiry under section
8 of that Act).”
Mortgages of charity land
27
Restrictions on mortgaging
25
(1)
Section 38 of the 1993 Act (restrictions on mortgaging) is amended as follows.
(2)
For subsections (2) and (3) substitute—
“(2)
Subsection (1) above shall not apply to a mortgage of any such land if
the charity trustees have, before executing the mortgage, obtained and
considered proper advice, given to them in writing, on the relevant
30
matters or matter mentioned in subsection (3) or (3A) below (as the case
may be).
(3)
In the case of a mortgage to secure the repayment of a proposed loan or
grant, the relevant matters are—
(a)
whether the loan or grant is necessary in order for the charity
35
trustees to be able to pursue the particular course of action in
connection with which they are seeking the loan or grant;
(b)
whether the terms of the loan or grant are reasonable having
regard to the status of the charity as the prospective recipient of
the loan or grant; and
40
(c)
the ability of the charity to repay on those terms the sum
proposed to be paid by way of loan or grant.