Examination of Witnesses (Question Numbers
360-379)
DAME SUZI
LEATHER, MR
ANDREW HIND,
MS ROSIE
CHAPMAN AND
MR KENNETH
DIBBLE
9 OCTOBER 2008
Q360 Mr Walker: Kelvin, just to help
you on that, 5,073 charities were removed from the register, according
to your annual report last year. That is a lot. Why were they
removed? Did they just go defunct?
Mr Dibble: They were removed because
they did not operate or they had no assets or they wound up, basically.
Q361 David Heyes: It is clear that
you have been landed with an impossible task and Parliament are
to blame for that. You are right to say to us that if a change
in the law is required then that is for us to do. Are you agreeing
that you have been landed with an impossible task. If you do agree,
are you doing anything as an organisation to put pressure back
on to say, "You need to look again at the law."
Dame Suzi Leather: It is a bit
like the Irish joke: "How do you get from one place to another?"
"Well, I wouldn't start here." However, I think we will
be in a very different place in three years' time. In three years'
time, we will be able to see what this way of framing the law
is able to deliver. Parliament may not have bitten the bullet,
as it were, and the road we are going down may seem a bit slow
and may seem a bit vague at the moment but I think the overall
impact is going to be to hugely increase both the public understanding
of what charities are and the amount of public benefit that is
being delivered by charities. I think that is a good thing, because
it protects the independence of the sector. It will protect the
diversity of the sector, but it will make the sector much more
accountable.
Q362 David Heyes: Let me press you
further on it. Are you saying to us that it is your belief, as
an organisation, that the law, as framed, can be made to work?
Obviously you are putting a huge endeavour into making a success
of it. Is this a message to us that the law is okay and that it
can be made to work all right: "Give us some time to work
on it, and things will come right"? Or are you saying to
us, "There are so many anomalies and difficulties here that
you, as parliamentarians, have to go away and do something about
it before we go any further, because, if we do carry on, we are
heading for major problems?" What is the message to us? Is
it: "Crack on and hope it will all work out" or "Let's
pause and look again at whether we have the law right"?
Dame Suzi Leather: I am saying:
"Support us in what we are doing—because we are doing
what you have asked us to do—and wait and see what this
delivers—which you will have in two or three years' time."
I remain optimistic. The sorts of things that are being said in
the sector, the sorts of conversations, the sort of determination
that exists within charities to show that they are bringing public
benefit is very great.
Q363 Paul Flynn: Can you convince
us to share your optimism? I remain deeply unhappy about this
absurd suggestion that plucking the best pupils out of state schools
is somehow of public benefit. All through the report there tends
to be a desire to exaggerate the alleged benefits that the charities
produce at the moment. Your guidance gives examples of advancing
religion, including "passive advancement". You talk
about "hidden advancements" and "hidden benefits"
and so on. You suggest as "passive advancement" for
religion: "leaving religious buildings open" so that
people can come in, or "sitting with a deceased person's
body". Compared to the detriment that many of us regard extreme
forms of religion enter into—and some who have come before
us have given extraordinary evidence: people who take a view of
society where they regard three-quarters of the population of
the country as destined for hell—you do seem to have been
very permissive as far as the status quo is concerned, and to
be promoting that rather than bringing the reforms that many of
us were expecting.
Dame Suzi Leather: Advancing religion
is a charitable purpose.
Q364 Paul Flynn: I understand that.
Dame Suzi Leather: I think there
are very good reasons for that. Religion provides a moral and
ethical framework which structures people's lives.
Q365 Paul Flynn: One of the people
who gave evidence to us—although he did not say it in evidence,
but at another time—said with regard to civil partnerships,
"What would they want next? Would they want to marry their
horses?" Comparing civil partnerships with bestiality I would
not have thought was advancing the public view in any way. There
are other religious views that are put forward that are divisive
in society generally.
Dame Suzi Leather: I would disagree
with you about your characterisation of the role of religion in
society. Parliament thinks advancing religion is a good thing,
I think it has in mind the benefits that a religious framework
brings to people. It is clearly a stimulus to active citizenship
and volunteering. It does demonstrate social and individual transformation.
It gives people hope. It emphasises selflessness. It emphasises
compassion. I think that having an emphasis on love, as most of
the main religions do, is a very good thing for society.
Q366 Paul Flynn: I do not think there
would be any disagreement with that. I think it ought to be the
general view that most religions do good work. You chose the particular
charities you were looking at. One I know very well. It is a very
good charity. I have no criticism of it—I do not want to
identify it—but it happens to be dedicated to providing
a service to a particular religious group and that particular
religious group no longer inhabits that area and they have to
provide a service to other groups of people without religion.
Was it a completely random selection? Because I think this would
be one of the institutions that could easily establish itself
as providing a benefit. Were these soft choices you made or were
they completely random?
Ms Chapman: No, it was not completely
random. To go back to the first 12, we were looking, first of
all, at those charities which previously benefited from the presumption—hence
including education and religion. Then we were mindful of the
public interest in fee charging, so we particularly wanted to
look at independent schools and residential care as two examples
of fee charging. But looking at religion in particular, rather
than looking at particular faiths, we thought it would perhaps
be more helpful to look at charities that advance religion in
a variety of ways. You will see that we have included a religious
broadcaster and we have a place of worship, the temple; we have
a retreat and meditation centre; and we have an evangelical mission.
We thought these would be interesting ways in which a number of
faiths might be advancing religion and which could be replicated
across those faiths. That was the rationale we used there.
Dame Suzi Leather: But, in answer
to your question, offering an open place of worship is bringing
public benefit under the charitable purpose of advancing religion.
You do not have to, in addition, run a soup kitchen.
Q367 Paul Flynn: How will you make
your assessment? What will it be based on?
Ms Chapman: We published the criteria
for how we would assess public benefit. There are three stages
to it. First of all, we have announced the 12. There will be a
kind of information gathering stage from now until Christmas.
We will look at their governing documents, we will look at their
accounts, we will look at any published material—if they
have a website, what is in their leaflets—and we will issue
a questionnaire for them to fill-in. The questionnaire is based
on the criteria for assessing public benefit that we have published.
In some cases, we would like to go and talk to those charities
in a bit more detail and talk to them about three things: (1)
Are their aims charitable within the definition of charity that
is included in the Charities Act? (2) Is the charity capable of
being operated for the charitable aims? (3) In practice, can the
trustees further the aims of the public benefit? As part of the
information gathering stage, we want to ask them, "How much
is it costing you in time and effort, both money and staff, to
comply with this?"—because it is ridiculous to make
an industry out of it—and then, after Christmas, to carry
out an analysis and make a decision about the three points I said
earlier: whether it does meet the definition of a charity; whether
it is capable of operating for those charitable aims; and whether
they in practice are furthering their purposes.
Q368 Chairman: Are they going to
pass or fail?
Ms Chapman: We will make a decision
about whether they are demonstrating public benefit.
Q369 Chairman: So there will be an outcome
in terms of whether they pass or fail?
Ms Chapman: Yes.
Q370 Chairman: But you will have
worked with them in the early stages, as it were, to help them
to pass.
Ms Chapman: At the end of the
day, should one of the 12 have difficulties in demonstrating public
benefit, then we will want to outline some steps with them for
ways in which they can rectify that. We have been very clear about
that from the very beginning.
Mr Hind: To come back to one of
your earlier questions, Chairman, which I think was: "What
will we get at the end of this assessment process?" you and
every member of the public will get—because we will publish
it at the end of the process that Rosie and Dame Suzi have been
outlining—a detailed write-up of the 12 assessments that
we have made, what we have done, the rationale underlining the
conclusions that we have come to and the conclusions we have come
to, together with a summary, I am sure, of general themes running
either through all 12 or through sections of the 12. In cases
where, having made that assessment, we do not conclude that an
individual charity within the 12 meets the public benefit requirement,
there will be some narrative of that, what we have required the
charity to do and so on, over the subsequent period.
Q371 Chairman: The assumption would
be there that the rest of the sector in those areas will read
this and work it out for themselves.
Dame Suzi Leather: Yes.
Mr Hind: Yes. I think this goes
to the heart of this conundrum: How can the Charity Commission
be clear about what is required?—another one of your first
questions. We are very conscious of the fact that charities are
saying to us, "What do we need to do?" It is not right,
as Suzi has said, in our strong view, to publish a matrix of you
need x per cent of this and y per cent of that.
Each case needs to be looked at on its merits, but, over time,
there will be a body of analysis from the assessments we make
which is out there in the public domain, and it will get easier
and easier for any charity to assess what they are doing against
published decisions to see whether they make it or they do not
make it.
Dame Suzi Leather: This is good
regulatory practice. This is principle-based regulation, not rule-based
regulation.
Q372 David Heyes: But how long will
that take? You have said it will emerge over time, but you presumably
have some feel for how long would be an unacceptable amount of
time? Presumably, in the meantime, some organisations will be
operating and pretending to be charities and, ultimately, they
are going to fail the test. How long is it going to take?
Mr Hind: There are a number of
things happening. The first review of the 12 will be completed
in the spring. But, as Suzi says, any sensible regulator is not
going to look in detail at every single organisation in the sector
for which it has responsibility. We are not going to undertake
assessments of 190,000 charities, but we will be monitoring the
reports that they are producing, the trustee reports, and where
there are cases that cause us concern, we will look at those immediately.
Q373 David Heyes: But this is not
entirely in your hands, is it, because the Charity Tribunal has
a role and, ultimately, there is litigation, judicial review,
decisions being made by judges on a case-by-case basis. That all
implies, potentially, a huge amount of time passing by until you
have a clear picture emerging. In the meantime, all these organisations
are continuing to function and go about their work, and they are
not legitimate charities. Eventually that will prove to be the
case. How long is all that likely to take beyond your ability
to control the timescale?
Dame Suzi Leather: There will
be this review in 2011. I think it is right to have that period
of time, actually. I do not think this is the sort of thing that
is going to happen overnight.
Q374 Kelvin Hopkins: The legislation,
in my view, is too fuzzy. If it had been harder-edged, it would
have made your life easier. If you come to a situation where you
have to make a judgment about whether a charity should be a charity
any more, it could become a really big political issue, and then
you would throw it back to us and say, "Your legislation
was not clear about this. If you had made definite, hard-edged
definitions, it would have been a lot easier for us." In
a sense, do you think the Act is not as good as it should be and
we have failed?
Dame Suzi Leather: I think you
asked me that question some time ago and I gave you my answer!
Q375 Chairman: Yes. It was a rather
nice answer!
Dame Suzi Leather: Thank you.
Q376 Chairman: Are you planning to
expand your compliance work? Potentially, this is going to produce
big trade for you, is it not?
Mr Dibble: One essential and key
role for a regulator is its compliance function. The Commission
recently reviewed its priorities in its work and has supported
it with more resources. We are confident, with the resources we
have, that we can carry out an effective and more than compliance
function for the Commission for the benefit of the sector.
Q377 Chairman: Was that a yes: that
you are going to expand it?
Mr Dibble: It will be expanded
only in so far as there is a need for it to be expanded in terms
of the complaints which come to us about the administration of
charities.
Chairman: He is like a minister! Very
good, though.
Q378 Paul Flynn: We have these cases
of charities: there is one, allegedly, in Wales that was set up
to provide petticoats for fallen women and we know of a public
school that exists to provide education for the orphans of the
soldiers who died in the Battle of Waterloo. We have others where,
clearly, they cannot continue with their original function. The
case that you are looking at is one where the residential home
exists to provide a service and the people are not there any more.
They would close down if they had to revert to providing that
service for which they were originally there. What is your view
on this? What happens to these charities? Do you encourage them
to continue and to diversify into something else? If they do that,
are they abiding by their founding principles?
Dame Suzi Leather: A rather wonderful
characteristic of the charity sector is that the charity endures
but its beneficiaries may change because social and economic circumstances
have changed. We have to ensure, with the charity, that the charitable
assets are being used in the closest possible way to the original
purposes of the charity. For instance: if a charity was set up
to support the family of people who were killed in the Boer War,
what does that mean today? It means looking after the families
of people who have been killed fighting in Iraq and Afghanistan.
Q379 Chairman: We are going to end
there. What is clear is that, whatever else it has done, this
attention to public benefit, as you were saying a while ago, has
forced every charitable organisation in the country to think afresh
about its underlying purpose.
Dame Suzi Leather: Yes.
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