Edward
Miliband: That is an important point that should be noted
by the Committee. In
partial reassurance to the hon. Member for Isle of Wight, the hon.
Member for Cheltenham explained why it is right in most cases for the
charity concerned to bear the cost of the appointment of an interim
manager. The commission can, however, in exceptional cases—it
has done so recently—agree to pay the costs itself. As for new
clause 5, it is already the case that receivers and managers may work
for nothing. It is just that none of them chooses to do so. I hope that
I have reassured the hon. Gentleman about
that. There are two
aspects to new clause 9 tabled by the hon. Member for Cheltenham, the
first of which is a sum being agreed in advance and who should meet the
additional costs. There is a real danger in a public tender exercise.
At present, the commission appoints from a panel, but a widely
publicised public tender exercise would do more reputational damage to
a charity than the current system of appointing from a
panel.
Mr.
Turner: I am sure that the Parliamentary Secretary is
aware that the panel is sometimes appointed by public tender. That does
not involve naming each individual charity that it might be called on
to serve in the future. Is that the
practice?
Edward
Miliband: That may be right. I will happily look at the
matter but I am not convinced that there is not a perfectly good system
in place at the moment. I undertake to talk to the commission about how
it chooses its panel and whether, tying together the comments of the
two hon. Gentlemen, there is a sufficiently wide range of candidates
that can come
forward.
2.15
pm On the second
part of the amendment, for the same reasons that the hon. Member for
Cheltenham answered the hon. Member for the Isle of Wight about the
costs being borne by the charity concerned, it would be difficult to
say in advance before one has gone into the organisation to work out
the full extent of its problems and difficulties that a certain sum
must be the limit of how much the interim manager is paid. I take the
points about cost control that have been made across all sides, and I
will go back to the commission from the debate and I am sure that it
will be listening and reading the transcript of our proceedings and
hearing the Committee’s concern, but it is not practical to
decide in advance how much those costs would be
and essentially make the commission bear any additional cost. With that
explanation I hope that I have satisfied the
Committee. Martin
Horwood: I am reassured by some of the Minister’s
statements and certainly by his intention to go back and talk to the
commission. He mentioned both the role of receivers and managers and
possibly considering the suggestion by the right hon. Member for
Cardiff, South and Penarth; to look at the excessive costs being run up
on occasion by people in the position of receiver and manager and in
future of interim manager or trustee, as we decide.
I think that he is being
slightly optimistic, however. First, he said that this happens only
once or twice a year. If that is true in the past 12 months, that is
atypical, because as I mentioned earlier, the Association for Charities
obtained the total list of appointments between 1993 and 2004 and in
some years five or six such appointments were made. It is sometimes
much more common than he suggests in his remarks.
It is a matter of legitimate
concern among charities, particularly among smaller charities that are
growing and developing and are possibly subject to scrutiny because
some of the practices that they may have indulged in may not conform
always to best practice. It might be a legitimate concern for the
Charity Commission that in practice the appointment of the receiver and
manager can end up doing more harm than good, and on occasion lead to
the closing down of the independent charity.
While I take the Minister at his
word on his good intentions to talk to the commission, I am still
minded to press new clause 9 in particular to a vote to ensure that
there is a clear incentive for both the appointed receivers and
managers and for the commission to minimise those excessive
costs.
Peter
Bottomley: I think that the hon. Gentleman has picked the
right new clause to press if he is going to press one, but we all
recognise that the Charity Commission is not part of the debate while
it might agree with one or two of the things that the association has
said; for example, in one case the receiver manager found poor
financial controls and record keeping, inability of trustees to work
together, inadequate charitable activity, the absence of a definitive
membership list, which had apparently been remedied, and the
unconstitutionality of some trustee appointments. I think that people
who were complaining about the Charity Commission accept the criticism
that the charities were broadly just. He has picked the right new
clause.
Martin
Horwood: I am grateful for that generous intervention by
the hon. Member for Worthing, West. He makes a legitimate point that we
are not here to challenge the concept of appointing something
equivalent to a receiver and manager or an interim manager in
principle. Obviously in many cases that will be necessary and as I said
in many of the cases presented by the Association for Charities the
case is certainly arguable and I can see the argument on both
sides.
However, as he suggested I am
going to press new clause 9 to a vote. I beg to ask leave to withdraw
amendment No.
104. Amendment, by
leave, withdrawn.
Amendment made: No. 61,
in schedule 8, page 149, line 16, at end
insert— ‘(za) for
“they have” substitute “it
has”,’.—[Edward
Miliband.]
Mr.
Turner: I beg to move amendment No. 51, in
schedule 8, page 155, line 6, after
‘charity’, insert
‘but so that the
requirements of such regulations shall be the minimum commensurate with
the need to ensure that the statement of accounts provides a true and
fair view of the charity’s financial
position’.
The
Chairman: With this it will be convenient to discuss the
following amendments: No. 52, in
schedule 8, page 155, line 7, after
‘made,’, insert
‘or— (c) for more than one
type of statement to be prepared to reflect the differing natures and
sizes of different
charities,’. Government
amendment No.
62
Mr.
Turner: These are simple amendments. Amendment No. 52
would require that those setting regulations for charities’
accounts be able to prescribe more than one statement
“to reflect the differing natures
and sizes of different
charities.” Amendment No.
51 would provide that
“the requirements...be the
minimum commensurate with the need to ensure that the statement of
accounts provides a true and fair view of the charity’s
financial
position”. Again, that is
designed to put SORP into context, which at present it appears not to
be, and to reflect more clearly the capacity of different charities to
do things
differently. Some
charities—I wish this were in the UK—of the character of
the Bill Gates Foundation, but not of its size, need do no fundraising
at all. All they do is disburse moneys. There is no need for them
therefore to have the same accounting requirements as, say, a large
charity that depends a great deal on
fundraising.
Martin
Horwood: I am grateful for the hon. Gentleman’s
comments on the matter, but I am slightly confused. It seems to me that
the advantage of SORP is its universality. Even if the declared
fundraising costs are nil, there is a huge virtue in everyone following
the same standard. However, in the interests of work-life balance and
the time of day, I shall restrict my comments to
that.
Peter
Bottomley: A friend of mine essentially leads the
trusteeship of a significant charity, and was amazed when approached by
someone from the Charity Commission and asked, “Why
aren’t you trying to raise more money?” She replied with
the point that my hon. Friend made, “Actually, the job of our
trusteeship is to spend the money that it has got, and is perfectly
adequate for the purposes for which it was established. We do not want
to be told to raise money, if we decide that we do not need to”.
A degree of sensitivity would be worthwhile. I am sure that the Charity
Commission
is capable of distinguishing between charities that raise money and
those that do not. It should not be telling people which of the two
they should be
doing.
Edward
Miliband: First, let me deal with my amendment in this
group. Essentially, it is a minor amendment consequent on the
conversion from “Commissioners” to
“Commission”.
I am afraid that the hon. Member
for Isle ofWight gets no stars for his two amendments,
uncharacteristically. Amendment No. 52 is unnecessary because section
86 of the 1993 Act, which applies to all regulation under this Bill,
allows already for the Secretary of State to make provision for
different cases. Indeed, current regulations do exactly that.
I understand the hon.
Gentleman’s intention behind amendment No. 51, but I do not
think that it is fit for purpose—to use the current
parlance—because it would be placed in a paragraph dealing
specifically with requirements on settlor trusts. I am sure that it is
not his intention, but the amendment would essentially introduce a new
“true and fair” yardstick for settlor trusts and their
statements of accounts. That would introduce SORP into a part of the
law applicable only to settlor trusts, and a whole new raft of
accounting standards for settlor trusts, which I am sure is not the
deregulatory intent for which he wishes to be
famous. The other thing
about it is that paradoxically, it would introduce new requirements
relating to settler trusts but would also, by using the phrase
“minimum commensurate”, relax the obligations. It would
not require settler trusts to comply with more general regulations
relevant to all charities—for example, by disclosing the
salaries of a charity’s highest paid employees.
I am afraid that this is
comprehensively a no-stars amendment. I hope that the hon. Gentleman
will withdraw
it.
Mr.
Turner: That is the sort of mark that I would have given
it as well. I beg to ask leave to withdraw the amendment.
Amendment, by leave,
withdrawn. Amendments
made: No. 62, in schedule 8, page 156, leave out lines 39 and 40
and insert— ‘(c) for
“the Commissioners so request, be transmitted to them”
substitute “the Commission so requests, be transmitted to
it”,
and’. No.
63, in
schedule 8, page 158, line 9, at
end insert ‘, and (c) for
“they may” substitute “it
may”.’. No.
64, in
schedule 8, page 164, line 41, at
end insert— ‘(2A)
Omit— (a) in the
definition of “exempt charity” in subsection (1), the
words “(subject to section 24(8) above)”,
and (b) subsection
(4).’. No.
184, in
schedule 8, page 165, line 7, at
end insert— ‘(ba) in the
definition of “institution”, after
““institution” insert “means an institution
whether incorporated or not,
and”.’. No.
196, in
schedule 8, page 165, line 15, at
end insert—
‘169A In section 100(3) (extent) for
“Section 10” substitute “Sections 10 to
10C”.’. No.
185, in
schedule 8, page 169, line 32, at
end insert— ‘Constitutional
Reform Act 2005 (c.
4)In Part
3 of Schedule 14 to the Constitutional Reform Act 2005 (the Judicial
Appointments Commission: relevant offices etc.) after the entries
relating to section 6(5) of the Tribunals and Inquiries Act 1992
insert— “President
of the Charity
Tribunal | Paragraph
1(2) of Schedule 1B to the Charities Act 1993
(c. 10)”.’. | Legal
member of the Charity
Tribunal | | Ordinary
member of the Charity
Tribunal | |
No.
186, in
schedule 8, page 169, line 32, at
end insert— ‘Charities and
Trustee Investment (Scotland) Act 2005 (asp
10)The Charities and Trustee
Investment (Scotland) Act 2005 has effect subject to the following
amendments. In section 36(1)
(powers of OSCR in relation to English and Welsh
charities)— (a) for
“Charity Commissioners for England and Wales inform”
substitute “Charity Commission for England and Wales
informs”, (b) for
“under section 3” substitute “in accordance with
section 3A”, and (c) for
“section 3(5) of that Act,” substitute “subsection
(2) of that
section,”. In section
69(2)(d)(i) (persons disqualified from being charity
trustees)— (a) at the
beginning insert “by the Charity Commission for England and
Wales under section 18(2)(i) of the Charities Act 1993 or”,
and (b) for “under
section 18(2)(i) of the Charities Act 1993 (c. 10),” substitute
“, whether under section 18(2)(i) of that Act or
under”.’. No.
187, in
schedule 8, page 169, line 32, at
end insert— ‘Equality Act
2006 (c. 3)(1) The Equality
Act 2006 has effect subject to the following
amendments. (2) In section
58(2) (charities relating to religion or
belief)— (a) for
“Charity Commissioners for England and Wales” substitute
“Charity Commission”,
and (b) for “the
Commissioners” substitute “the
Commission”. (3) In
section 79(1)(a) (interpretation) after “given by” insert
“section 1(1) of”.’.—[Edward
Miliband.] Schedule
8, as amended, agreed
to.
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