Examination of Witnesses (Questions 440-459)
DEPARTMENT FOR
SOCIAL DEVELOPMENT
3 MAY 2006
Q440 Chairman: There are a lot of
good questions there. Give us good, comprehensive answers that
will convert us all to be absolutely convinced that you have all
the right solutions and you are going to implement them with the
vigour and urgency that should characterise people charged with
this duty?
Mr Wall: I will do my best, Chairman.
The quickest way to identify that is the ways in which we envisage
the powers of the Commission being different from the powers of
the Commission in England and Wales. Currently, the Commission
for England and Wales does not cover all charities, it covers,
as I understand it, only about 60% of the sector. Some of those,
schools, for example, perhaps will not be considered to be high
risk, but small charities would be probably one area where there
could be the establishment of sham charities and the need for
broader regulation, so we are proposing that all charities will
be subject to registration, regardless of size. Secondly, there
will be a public benefit test in the Northern Ireland regulation
which the Commission will apply. The third and perhaps most important
in terms of your concerns as regards financial control, there
will be much more rigorous accounting standards that will apply
in terms of regulation of charities in Northern Ireland. Currently
in England and Wales charities which spend over £90,000 per
annum have to declare their full accounts and only where they
have a turnover of over half a million pounds do they have to
carry out a full professional audit. Under the proposals that
we are putting forward, all charities will be required to produce
evidence of their accounts. For those spending less than £10,000
a year, they will have to produce an independent examination of
their accounts. For those between £10,000 and £100,000,
they will have to produce full accrual accounts plus independent
examination; and for those spending in any one year more than
£100,000 they will have to carry out a full professional
audit. There will be a regulatory framework which will be much
tighter, in terms of examining the financial probity of registered
charities, all registered charities.
Q441 Chairman: How soon can all that
become operative?
Mr Wall: According to the timetable
we have at the minute, we are hoping to commence the establishment
of the Commission next year. I would hope that we would have the
Commission operating fully as quickly as possible, and we will
certainly be mindful as regards the concerns in terms of the control
of crime. There is an issue, however, in that it will take a certain
amount of time actually to get people on to the register.
Q442 Chairman: Good people will be
watching and listening with interest to your evidence, and all
these vague descriptions of time are a little bit tantalising,
so can you put some figures on as quickly as possible? We have
got "shortly" down, so we are making some progress,
but when do you think the people of Northern Ireland can feel
that if they give money to a charity they are indeed giving money
for a charitable purpose?
Mr Wall: It is intended that the
Commission will be established in March 2007. I would hope that
within 12 months we would have clear evidence of a Charity Commission
operating which the Northern Ireland public can depend upon.
Q443 Chairman: So give with great
care until 2008 and then you can give with abandon?
Mr Wall: One should always give
with care, I trust.
Q444 Rosie Cooper: How will the Charity
Commission be alerted, other than via the accounts, which no doubt
can be handled if you are sufficiently interested to make sure
of that? In England and Wales they tend to wait for people to
`phone in, and we have looked at various task forces where the
police do not notify each other, they do not go out proactively
themselves seeking evidence of fraud. How will they operate, what
will be the thing that starts an inquiry?
Mr Wall: An inquiry by a member
of the public will be one route. We are establishing a regulatory
forum, which will include the regulators across the UK but will
also include the police and the Revenue. The legislation will
also include gateways, in terms of sharing information between
the Revenue and the Police Service and the Commission.
Q445 Rosie Cooper: Will that be required,
or will it be they find out about an organisation which they think
is possibly not a charity and being used for the wrong reasons;
will they be required to pass on that information to the Charity
Commission and other organisations, or will it be just left in
the air, they may do, they may not?
Mr Wall: Are you talking about
the police or the Revenue?
Q446 Rosie Cooper: If the Revenue
find out, will they be required to make sure the Charity Commission
know, will they be required to pass it on to the police and the
Organised Crime Task Force, or whatever; will that be required?
I think it is really important, because otherwise some people
will say it is perhaps not high on their agenda and it will just
go by the by.
Mr Wall: I think it will be clearly
in the interests of the objectives of both the Police Service
and the Inland Revenue, where crime is suspected, to share that
information with the Commission, in terms of ensuring improved
regulation and control of crime.
Q447 Rosie Cooper: Is there a difference
between "in the interests of" and "required";
that is the point I am trying to get to?
Mr Wall: I would need to check
the actual wording of the legislation, to give you an answer.
I will provide that for you at a later date.
Q448 Chairman: Perhaps it would be
sensible to have a requirement for co-operation with the Organised
Crime Task Force, and perhaps you could take that one on board?
Mr Wall: I will take that on board.
Q449 Stephen Pound: Did you say seven
to nine thousand, or 79,000?
Mr Wall: Seven to nine.
Q450 Stephen Pound: I was just working
out in my head whether that was one charity for every 31,000 people;
it seems to me a pretty extraordinary figure. There are a number
of charities that I am personally involved in, like the RNLI and
the Soldiers', Sailors' and Airmen's Families Association, which
are UK charities, so even though they operate in Northern Ireland
they are based in the UK. How many of those charities that you
are talking about are ones which already come within the aegis
of the Charity Commission because they happen to have their office
of record in GB?
Mr Wall: I have not got numbers.
There are different kinds of charities in terms of the relationship
with GB; some Northern Ireland branches, if you like, have more
autonomy than others, as a kind of franchise. My guess is that
we are talking in the hundreds, not above a thousand, a smaller
number.
Q451 Stephen Pound: I may say, I
am just trying to reduce your workload here.
Mr Wall: If a charity operates
in Northern Ireland under the new regulatory system, they will
have to register separately in Northern Ireland, but there will
be administrative mechanisms to ensure that information is shared
between the different Commissions to ensure that there is not
too onerous an administrative burden placed upon charities.
Q452 Stephen Pound: An organisation
like Guide Dogs for the Blind, for example, or even Greenpeace,
or whatever, if they are registered here, would still have to
register locally?
Mr Wall: They would still be required
to register in Northern Ireland.
Q453 Stephen Pound: Have you considered
a case of 15 years ago? There was an organisation called the West
Belfast Family and Children Support Services Group, which was
in fact a front for the IRA, and a number of people in the part
of west London that I live in gave money to this, thinking it
was for the suffering children, and it ended up causing suffering
to children. The people who gave that money were actually charged
under the then anti-terrorism legislation, including someone rather
close to me. Has that consideration come in, because it seems
to me, if you have got even a partially unregulated system at
the present time, it is not only the fact that the money is going
to undesirable places but actually you are creating criminals
here?
Mr Wall: The new system will not
be partially unregulated, it will be more regulated than anywhere
else in the United Kingdom.
Q454 Stephen Pound: That message
to the potential donors would go out?
Mr Wall: That is right and we
are also introducing stringent controls in terms of public collections
of monies, which will apply to all charities.
Q455 Stephen Pound: Who will license
the public collections?
Mr Wall: The Commission will issue
an authorisation for any organisation that wants to collect money
publicly. The council then will have to issue a specific permit
in terms of the specific collection that is intended.
Q456 Stephen Pound: For street collection
and on private premises?
Mr Wall: No, not on private premises;
for public collections.
Q457 Chairman: I think it is very
important that you do take on board the concerns of the Committee
that the involvement, or potential involvement, of criminal elements,
be they paramilitary-based or otherwise, must be dealt with by
close liaison with the Organised Crime Task Force and other means.
I am sure you do take all that on board, and I am sure that you
also have some idea of the amount of funds that have been diverted
to illicit use, so you know presumably the extent of the problem
that you are going to be facing?
Mr Wall: We are certainly convinced
of the extent of the problem. I think the relationships that have
already been established between the various authorities will
enable us to build well upon that. I also think we have mechanisms
to be able to measure the problem in future.
Q458 Gordon Banks: Very briefly,
because Lady Hermon somewhat stole my thunder on some issues I
was going to raise. Going back to the Goldstock Report, which
basically you said was not a pattern that you wanted, that you
were looking for, do you see that there are any other sectors
which could benefit from regulation in a way that Professor Goldstock
did actually suggest; sectors such as taxi firms?
Mr McGrath: I am not sure we have
a view on that, to be honest.
Q459 Gordon Banks: You do not think
there is any other sector in Northern Ireland that could benefit
from IPSIGs, if you like, that you would have an interest in?
Mr McGrath: Our primary interest
in terms of the Department, in terms of the sector, is the voluntary
and community sector, which is actually a very vibrant and active
sector in Northern Ireland. As a Department, there is not another
sector that we have sponsorship or oversight of, apart from the
licensing trade we have just spoken about and other elements in
social policy.
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