2 Background to the Charities Act
2006
A brief history of charity regulation
Lord Hodgson: "the fundamental principles
of charity and philanthropy are deeply ingrained in this country's
culture".
597: The country's
oldest charity: King's School, Canterbury—still in
existence today—is established.
1601: Queen
Elizabeth I gives Royal Assent to the Statute of Charitable Uses,
which sets out the first definition of charity in English law
and the purposes for which a charity could be established.
1853: The Charitable
Trusts Act establishes the Charity Commission.
1891: Lord Macnaghten's
judgment in the Pemsel case (Income Tax Special Purpose Commissioners
v. Pemsel) groups different charitable purposes under four heads:
the relief of poverty; the advancement of education; the advancement
of religion; and other purposes beneficial to the community.
1916: The Police,
Factories etc (Miscellaneous Provisions) Act requires a charity
to obtain a licence for charitable collections in public places.
1939: The House
to House Collections Act introduces regulations for charities
fundraising through house-to-house collections.
1960: The
Charities Act introduces the register of charities and gives
the Charity Commission powers to investigate charities.
1992: The Charities
Act introduces compulsory registration for all charities with
an income over £1,000 and new regulations for fundraising.
1993: The 1992
and 1960 Acts are consolidated into a new Charities Act.
2002: The
publication of Private Action, Public Benefit, which
followed a review of charities and the not-for-profit sector by
the Strategy Unit in the Cabinet Office.
2004: The
introduction of the Draft Charities Bill, which
aimed to provide a legal and regulatory environment to enable
all charities to realise their potential as a force for good in
society; to encourage a vibrant and diverse sector, independent
of Government; and to sustain high levels of public confidence
in charities through effective regulation.
2004: The Introduction
of the Charities Bill (following scrutiny of the Draft Bill by
a Joint Committee).
2006: The Charities
Act receives Royal Assent. The Act states that: all charities
must be established for charitable purposes only, that a charitable
purpose must be "for the public benefit", and that "it
is not to be presumed that a purpose of a particular description
is for the public benefit".
2011: The Charities
Act 2006, the Recreational Charities Act 1958, and most of the
Charities Acts 1992 and 1993 are consolidated into the Charities
Act 2011.
2012: Lord Hodgson
publishes his review of the 2006 Act.
9. The piecemeal regulation of this sector (set
out in the timeline) is due in part to the history of charity
regulation, which dates back to the Statute of Charitable Uses
1601.[22] This, as Lord
Hodgson noted, "set out the first definition of charity that
existed in English law" and set out the purposes for which
a charity could be established.[23]
While there were further reforms to the law, introducing, for
example, the Charity Commission in 1853, and strengthening its
powers in 1960, the 1601 Act, and the definition of charity, remained
largely unchanged at the start of the 21st century,
when as Lord Hodgson has said, it was "clear that reform
was [...] much needed".[24]
10. The regulation of fundraising has often developed
separately, with much of the present legislation dating back to
1916 and 1939.[25] We
heard that the age of the legislation meant that it did not "contemplate
the new varied and sophisticated means of fundraising that charities
engage in" in the present day.[26]
11. Proposals to "modernise" charity
law were made in 2002 with the publication of Private Action,
Public Benefit, by the Strategy Unit in the Cabinet Office,
which followed a review of charities and the not-for-profit sector.[27]
This report led into the drafting of the Draft Charities Bill
2004, which aimed:
a) to provide a legal and regulatory environment
that will enable all charities, however they work, to realise
their potential as a force for good in society;
b) to encourage a vibrant and diverse sector,
independent of Government; and
c) to sustain high levels of public confidence
in charities through effective regulation.[28]
12. The Draft Bill was considered by a Joint
Committee of both Houses, which listed the areas in which the
Draft Bill sought to legislate, including "expanding the
list of charitable purposes, removing the presumption of public
benefit, defining the role of the Charity Commission, establishing
a new Charities Appeal Tribunal to hear appeals against Charity
Commission decisions, introducing a new legal form for charities
and regulating public charitable collections".[29]
The Joint Committee warned, however, that there was an "imprecise
rationale behind the draft Bill".[30]
13. Nevertheless, the Charities Bill was presented
in the House of Lords in December 2004, and was immediately re-introduced
following the General Election in 2005, receiving Royal Assent
in November 2006.[31]
22 Charitable Uses Act 1601 Back
23
Cabinet Office, Trusted and Independent, p 8 Back
24
Ibid. p 18 Back
25
Q 16 Back
26
Ev w86 [Note: references to 'Ev wXX' are references to written
evidence published in the volume of additional written evidence
published on the Committee's website.] Back
27
Cabinet Office, Private Action, Public Benefit , September
2002 Back
28
Draft Charities Bill, Cm 6199, May 2004 Back
29
Joint Committee on the Draft Charities Bill, The Draft Charities
Bill, HC (2003-2004) 660-I, para 12 Back
30
Ibid. para 21 Back
31
Cabinet Office, Trusted and Independent, p 13 Back
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