The role of the Charity Commission and "public benefit": Post-legislative scrutiny of the Charities Act 2006 - Public Administration Committee Contents

5  Public Benefit

53.  The 1601 Statute of Charitable Uses included a list of purposes that were considered to be charitable.[100] In 1891 these were grouped together into four heads of charitable purposes: the relief of poverty; the advancement of religion; the advancement of education; and other purposes beneficial to the public.[101] It is argued that prior to the Charities Act 2006, there was a presumption in case law that the first three heads were for the public benefit.[102]

54.  It is arguable that the Charities Act 2006 introduced a fundamental change by stating that "it is not to be presumed that a purpose of a particular description is for the public benefit".[103] The Act also places a statutory objective on the Charity Commission to promote awareness and understanding of the operation of the public benefit requirement, through the publication of guidance. The full consequences of this may not have been fully appreciated: it has always been the case that all charities must be established for charitable purposes only, and that a charitable purpose must be "for the public benefit". The Act did not define "public benefit", and this has proved to be of crucial significance.[104]

55.  Guidance on public benefit was published by the Charity Commission in December 2008, and prompted a lengthy legal battle between the Commission and the Independent Schools Council (ISC), which was concerned that the guidance may have meant that some of its members lost their charitable status. The case focused on the methods by which an independent school with charitable status could demonstrate that its charitable purposes were for the public benefit. The ISC stated that the intention of the Charity Commission, in its guidance, was "that the threshold to qualify schools for charitable status would be raised every year to ensure that they provide the maximum possible public benefit". The ISC added:

It cannot be right to hold a sword of Damocles over an organisation and threaten to strip its assets (which is effectively what removing charitable status would do) based on a periodic, fluctuating assessment by an external agency, against hazy benchmarks, of its activities.[105]

56.  The legal battle concluded with a judgment by the Upper Tier Tribunal on 14 October 2011. The Tribunal—the Hon Mr Justice Warren, and Judges McKenna and Ovey—ruled that:

whether such a school is a charity within the meaning of the 2006 Act does not now turn on the way in which it operates any more than it did before. Its status as a charity depends on what it was established to do not on what it does.[106]

The ruling stated that in all cases of fee-charging independent schools with charitable status, there must be more than a de minimis or token benefit for the poor, but that it was for the trustees of a charitable independent school to decide what was appropriate in their particular circumstances, not the Charity Commission.[107] The Tribunal ruled that the Commission must withdraw its guidance on public benefit.

57.  The Tribunal's decision was questioned by Peter Luxton, Professor of Law at Cardiff University, who argued that the ruling was based on an "erroneous view" that "public benefit is not inherent in the categories of purposes listed in the statute".[108] Professor Luxton added:

the Tribunal decision requires some mysterious additional "public benefit" to be shown under every category of charity [...] In this respect the Tribunal's judgment is incompatible with the established case law, which shows that a purpose falling within one of the recognised categories is necessarily for the public benefit.[109]

58.  The Commission's stance on the issue of public benefit was also questioned following its decision in June 2012 to reject the application for charitable status from the Preston Down Trust, part of the Plymouth Brethren Christian Church (or Exclusive Brethren). The Commission's decision letter stated:

As a matter of law, we are not able to satisfy ourselves and conclusively determine that Preston Down Trust is established for exclusively charitable purposes for public benefit and suitable for registration as a charity.[110]

The Brethren announced in July 2012 that they would take the Commission to the Charity Tribunal. In February 2013, after members of the Brethren raised their concerns with this Committee, which were also taken up elsewhere in Parliament, a stay in the Tribunal proceedings was announced to allow time for the Commission to investigate whether a cost-effective alternative to tribunal proceedings could be agreed.[111] At the time of publication, this remains the position.

59.  The legal disputes relating to the Charity Commission's interpretation of "public benefit" and the Charities Act 2006 are complex and touch upon controversial and political questions concerning charitable status. This has also been a considerable financial burden on the Charity Commission and on the charities concerned, which is itself an injustice.

Parliament, public benefit and the 2006 Act

60.  The 2006 Act, while placing a requirement on the Charity Commission to produce guidance on public benefit, did not define, or provide direction on what "public benefit" meant. Charity lawyers Francesca Quint and Philip Kirkpatrick noted that the Commission was required to produce guidance that reflected centuries—and thousands of pages—of sometimes contradictory case law.[112]

61.  The Commission has stated that there was a "lack of certainty as to the law relating to the public benefit requirement for the advancement of religion" since the passing of the Act and the statement "it is not to be presumed that a purpose of a particular description is for the public benefit".[113]

62.  Witnesses, argued however, that the Commission's interpretation of the 2006 Act went against what Parliament had intended when the Act was passed. The Plymouth Brethren (or Exclusive Brethren) stated that at the time that Act was passed "the message from the then Government was that charities created to advance established religions had nothing to fear" and described the Commission's decision in the case of the Preston Down Trust as a "shocking turn of events for these charities never prefaced when the Act was passed".[114]

63.  The consideration of intent behind a statute is a complex legal area. There has been a long-standing self-imposed ordinance that the courts "excluded from their consideration when interpreting statutes parliamentary material, including debates, relevant to this statute" in recognition of the "exclusive cognizance" of Parliament over its own proceedings.[115] This rule has been subject to some change in recent years, with very limited consideration of ministerial statements accepted in certain cases, most notably by the House of Lords, sitting in its judicial capacity, in the case of Pepper v Hart in 1992. Erskine May describes the impact of the case on the exclusive cognizance rule as below:

As a result of the decision in Pepper v Hart, the courts now refer to parliamentary material where legislation is considered to be ambiguous or obscure, or leads to an absurdity; where the parliamentary material consists of one or more statements by a Minister or other promoter of a bill, together with such other parliamentary material as is necessary to understand such statements and their effect; and where the statements relied upon are unclear.[116]

64.  We accept the case of the Charity Commission that there is a lack of certainty about religious charities and public benefit in the 2006 Charities Act. This ambiguity suggests that it is reasonable to examine the Official Report for a consideration of the ministerial intent behind the statute.

65.  An amendment was tabled at Third Reading of the Charities Bill by the then Member for Maidstone and the Weald, the Rt Hon Ann Widdecombe, to retain the presumption of public benefit for religious charities, following concern that the Act may challenge the charitable status of religious charities.[117] The now Leader of the Opposition, the Rt Hon Ed Miliband, who took through the Act as a Cabinet Office Minister, stated in response that "the burdens will not be onerous for religious charities" and that the Act was not "intended to lead to a narrowing down of the range of religious activities that are considered charitable".[118] He added that:

Religion has an important role to play in society through faith and worship, motivating charitable giving and contributing in other ways to stronger communities. Both those dimensions will thus usually be apparent from the doctrines, beliefs and practices of a religion. The Charity Commission is clear that most established religions should not have any difficulty in demonstrating their value to society from their beliefs.[119]

66.  Lord Hodgson has argued that the "will of Parliament was to ensure that the words 'public benefit' appeared on the face of the Act and that the Charity Commission should interpret this".[120] Charity lawyer, Francesca Quint, stated that it was "right" for public benefit to be mentioned in the 2006 Act, as it helped to explain the case law developed over centuries, and "brought to the fore the fact that the public benefit principle is an essential part of charitable status and that no purpose is charitable unless it benefits the public in some way".[121] She cautioned, however, that while it was helpful that the Act confirmed that "public benefit meant what it always meant in charity law", this "was not particularly helpful in defining what it did mean, because one then had to work out what charity law said it was".[122] She added that this might mean that the courts relied on "some very old cases that have stood for so long that they can't be changed even if we have moved on in society".[123]

67.  Lord Hodgson told us that the Commission "was given a hospital pass" by Parliament on the issue of public benefit.[124] Sir Stuart Etherington, the Chief Executive of the NCVO, said, however, that while the Commission faced difficulties defining public benefit; part of the problem was attributable to the fact that it "did not interpret public benefit correctly".[125] This view was widely shared by other witnesses. Professor Peter Luxton argued that the Commission produced "voluminous amounts of [public benefit] guidance of questionable accuracy", which it has then used in its decision-making processes "without referring to the case law on which such guidance is (or at least purports to be based)".[126]

68.  Charity lawyers Philip Kirkpatrick and Francesca Quint stated that the Commission's original guidance on public benefit "did not recognise sufficiently the discretion given to trustees to determine how to pursue their charitable purposes".[127] Ms Quint suggested that "the Commission did not respect the trustees enough. The Commission regarded itself as knowing better than the trustees sometimes".[128]

69.  The Plymouth Brethren (or Exclusive Brethren) argued that the Commission had interpreted the requirement to provide public benefit as a requirement to produce "all-encompassing guidance". Such guidance, the Brethren argued, could not be based in full on case law. As a result the production of all-encompassing guidance involved "an extrapolation from existing cases to fill in the gaps in the law: such extrapolation may or may not be correct in law, but can only be tested through recourse to the Tribunal".[129]

70.  Matthew Burgess of the Independent Schools Council (ISC) stressed that the ISC's Charity Tribunal case was a challenge to the way the Act was interpreted by the Charity Commission, rather than a challenge to the 2006 Act, or its inclusion of public benefit.[130] This interpretation, he believed, was not "politically-led", but simply wrong.[131]

The charitable status of the Plymouth Brethren (or Exclusive Brethren)


71.  We have received conflicting evidence about the nature of the Plymouth Brethren (or Exclusive Brethren) and we have endeavoured to present both sides of the case which has been presented to us. Following the decision of the Charity Commission in the case of the Preston Down Trust we received evidence questioning whether the Plymouth Brethren was another name for an organisation also known as the Exclusive Brethren. When questioned on this point, Garth Christie of the Brethren stated that the word "exclusive" when used in the context of the Brethren meant that they were "exclusive from evil", but that, nonetheless, they were "known as the Plymouth Brethren Christian Church".[132] Several members of the public contacted us to state that the Plymouth Brethren Christian Church was a new name for the Exclusive Brethren and to suggest that the Brethren changed their name to avoid the suggestion that the "exclusive" in their name suggested limited public benefit. Marcus Anderson, a former member of the Church, wrote in evidence to the Committee that:

To avoid being linked with this and other publicity, it appears they have changed their name, as if to disassociate themselves from the name Exclusive Brethren. However, please be assured, this group is one and the same. Their own website was, but has now undergone a brand name change.[133]

We also received evidence from John Weightman, which stated that, until November 2012, the organisation was "known as Exclusive Brethren [...] Despite the claim that Plymouth Brethren Christian Church is the historic name it is an entirely new invention. Two months ago that name did not exist".[134]

72.  We heard that the change of name by the Plymouth Brethren had caused some to confuse the organisation with the separate, Open Brethren, which has approximately 1,000 congregations in the UK that do not follow the doctrine of separation (the Plymouth (or Exclusive) Brethren split from the Open Brethren in 1848).[135] The Open Brethren indeed wrote to the Charity Commission to express their concern at the confusion between the two organisations.[136] We will, for ease of reference, use the term "Plymouth Brethren (or Exclusive Brethren)" to refer to the organisation to which the Preston Down Trust belongs.


73.  The decision of the Charity Commission to refuse the registration of the Preston Down Trust was, the Plymouth Brethren (or Exclusive Brethren) told us, a "bolt out of the blue", following seven years of "dialogue with the Charity Commission".[137] In evidence, the Commission set out how the 2006 Act and case law has defined the requirements to be registered as a religious charity:

In charity law, a religion is a system of belief that has certain characteristics that have been identified in case law and clarified in the Charities Act 2006 which says that the word religion includes "a religion which involves belief in more than one god, and a religion which does not involve belief in a god".

When considering whether or not a system of belief constitutes a religion for the purposes of charity law, the courts have identified various characteristics of religion that describe a religious belief. These are:

  • belief in a god (or gods) or goddess (or goddesses), or supreme being, or divine or transcendental being or entity or spiritual principle, which is the object or focus of the religion
  • a relationship between the believer and the supreme being or entity by showing worship of, reverence for or veneration of the supreme being or entity; and
  • a degree of cogency, cohesion, seriousness and importance; and
  • an identifiable positive, beneficial, moral or ethical framework

Public benefit is a requirement of charities for the advancement of religion as it is for all other charitable purposes. Any presumption of public benefit which was afforded to religious purposes was removed by the Charities Act 2006. The public benefit requirement varies between different charitable purposes and is set out in case law.[138]

74.  The Commission stated that its decision was based on the legal consideration of "whether the organisation is advancing the Christian religion for the public benefit, according to charity law".[139] The Commission further cited the judgment of the Upper Tier Tribunal in the Independent Schools Council case, which stated:

Returning to the example of religion, not only is there to be no presumption that religion generally is for the public benefit […] but that there is no presumption at any more specific level and thus no presumption that Christianity or Islam are for the public benefit and no presumption that the Church of England is for the public benefit.[140]

The evidence added that the Commission was "obliged to have due regard to decisions of the Tribunal".[141]

75.  The Commission emphasised that a charity advancing religion has to show that the "aim of the organisation is to advance the religion in a way that is for the public benefit", rather than simply acting in the name of religion. The Commission added that:

The wider public must benefit from a religious organisation seeking to be a charity. It cannot be established solely for the benefit of the followers or adherents of the religion, the aim must be for the benefit of the public. The public may benefit by participating in the services of the religion, or, where the religious beliefs and practices, reflected in the doctrines and codes of the particular religion, encourage its followers or adherents to conduct themselves in a positive and socially responsible way in the wider community.[142]

76.  The Commission described its decision in the Brethren case as "finely balanced" because of the "particular doctrines and practices promoted by the Preston Down Trust":

Preston Down Trust promotes particular beliefs and practices, in particular the doctrine of separation which is central to their beliefs and way of life and this has the consequence of limiting their engagement with non-Brethren and the wider public. The evidence we were given showed that the doctrine of separation as preached by the Trust requires followers to limit their engagement with the wider public, and there was insufficient evidence of meaningful access to participate in public worship.[143]

The Commission concluded that "the evidence of beneficial impact on the wider public was not sufficient to demonstrate public benefit".[144]

77.  The Plymouth Brethren (or Exclusive Brethren) dismissed the argument that the organisation did not act for the public benefit, and sought to address concerns over what the Commission described as the "doctrine of separation". The Brethren's evidence stated:

Non-Brethren may attend our services. Generally, our Holy Communion service alone is for Brethren, but we would not expect to turn away a non-Brethren [...] In short, we believe that our gospel halls advance the Christian religion through advancing the beliefs of the Plymouth Brethren Christian Church. We are not a closed order, but live in society, take part in open preaching and our gospel halls are open to non-Brethren.[145]

78.  We received a substantial weight of evidence in support of the Brethren, including statements from dozens of non-Brethren members who wished to state for the record that allegations that Brethren members do not integrate with the wider community and non-Brethren members were false.[146]

79.  We also heard that the Plymouth Brethren (or Exclusive Brethren) had not experienced similar issues with charity registration in other jurisdictions. Bruce Hazell, of the Brethren, stated that their organisations in Scotland had not experienced any issues with their charitable status.[147] The evidence from the charities regulator in Australia was that the equivalent Brethren organisation had been granted charitable status, as it was "presumed that bona fide religious organisations are for the public benefit".[148] This presumption, however, is what the 2006 Act in England and Wales set out to remove.

80.  The decision in the case of the Preston Down Trust is the first time that the Charity Commission has refused charitable status to a religious group on the grounds of public benefit, as set out in the 2006 Act. In October 2012, however, the Commission refused an application for charitable status from the Pagan Federation, stating that the organisation was "not established exclusively for charitable purposes for the public benefit, because it does not meet all the essential characteristics of a religion for the purposes of charity law, nor is it for the public benefit".[149]

81.  The Plymouth Brethren (or Exclusive Brethren) have warned that the Charity Tribunal decision may affect other faith charities that hold services in which "non-believers may attend but not participate in all aspects".[150] The Christian Institute agreed, arguing that "the charitable status of established Christian churches is threatened because of the Charity Commission's approach to public benefit".[151] Jon Benjamin, the Chief Executive of the Board of Deputies of British Jews, has also warned of the similarities between the Brethren as "deeply devout, very traditional and detached in many ways from what they would regard as pernicious influences in modern society" and the practices of some organisations practising Judaism. Mr Benjamin warned that "the concern must be that parts of the Jewish community may now be vulnerable to censure or even de-registration by the Commission".[152]

82.  William Shawcross told us that there was "no way in which the Commission would wish to discriminate against Christians or indeed any other religion", and noted that the Commission had registered "1,000 new Christian or Christian­related charities in the last year, and 400 new charities of other religious faiths".[153] He argued that the concern about the Brethren's case was in relation to "their doctrine of separation and exclusiveness", and "how much public—as opposed to private—benefit they could give".[154]

83.  Sam Younger, the Commission's Chief Executive, also sought to counter the suggestion that the Commission were "picking on" the Brethren by insisting that the Commission was required, when it received an application for registration as a charity, to consider that application on its merits.[155]

84.  In evidence to us, Garth Christie of the Plymouth Brethren (or Exclusive Brethren) purported to read from the letter from Kenneth Dibble at the Charity Commission which declined the application for charitable status from the Preston Down Trust. Mr Christie read out an extract of the judgment of the Upper Tier Tribunal as if it was Mr Dibble's own view, thus attributing legal opinion to the Charity Commission. Mr Christie's extract from Mr Dibble's letter also included text which the Commission stated bore "no relation to anything in that letter", and was, in fact, taken out of context from comments Mr Dibble had made to this Committee in the previous Parliament to discuss the application for charitable status from the religion of scientology. The Commission argued that "such a misrepresentation is a serious matter" and described this part of the Brethren's evidence as "seriously misleading".[156] Mr Christie of the Plymouth Brethren (or Exclusive Brethren) apologised unreservedly to us for this "inadvertent" mistake.[157] We are grateful for his apology and clarification. Mr Christie's letter is at appendix B.

85.  Parliament should be under no illusion about the scale of the task it presented to the Charity Commission when it passed the Charities Act 2006, which required the Commission to produce public benefit guidance without specifically defining "public benefit". This has had the effect of inviting the Commission to become involved in matters such as the charitable status of independent schools which has long been a matter of party political controversy.

86.  In our view, it is for Parliament to resolve the issues of the criteria for charitable status and public benefit, not the Charity Commission, which is a branch of the executive. In this respect the Charities Act 2006 has been an administrative and financial disaster for the Charity Commission and for the charities involved, absorbing vast amounts of energy and commitment, as well as money.

87.  We are far from happy with the manner in which the Charity Commission has conducted policy concerning public benefit. We have, however, received clear advice from the Attorney General that it is not Parliament's role to make decisions on the charitable status of particular organisations (see appendix A). We will not therefore prejudge the Tribunal decision in the case of the Preston Down Trust, part of the Plymouth Brethren (or Exclusive Brethren). For the purposes of this Report, we are therefore treating the Preston Down case as sub judice and will not make a substantive comment on the Commission's decision, until any judicial proceedings on the case have been concluded.

A statutory definition of public benefit?

88.  We considered whether a statutory definition of public benefit would be helpful in clarifying the law on this point. In his review, Lord Hodgson dismissed this suggestion and argued that a fixed definition would quickly become out-of-date in a changing world.[158] William Shawcross, Chair of the Charity Commission, agreed and stated that, in choosing not to define public benefit in the Act, "Parliament was correct: it has to evolve under case law".[159] This view was also accepted by the Minister, who stated that "on balance we should continue to rely on case law rather than seeking to make a statutory definition of 'charity'".[160]

89.  Alternative proposals for clarifying the law without a statutory definition were proposed. Francesca Quint, who agreed that a statutory definition could be "fossilised" by a changing context, suggested that, as in Scotland, there should be "some guidance in legislation to indicate what has to be taken into account in assessing public benefit".[161] Ms Quint also recommended that it should be made clear that "the Commission, the courts and the tribunals are not bound by precedent in the sense that they can take account of social and economic circumstances".[162]

90.  The Plymouth Brethren's (or Exclusive Brethren's) evidence recommended that Section 4(2) Charities Act 2011 (s3(2) of the 2006 Act) and s17(1) Charities Act 2011 (s4(1) of the 2006 Act) should be repealed.[163] The Brethren has also recommended a review by the Law Commission of the meaning of charity and the obligation on the Charity Commission to produce public benefit guidance.[164] Peter Luxton, Professor of Law at Cardiff University has also called for the Commission's public benefit objective to be abolished, alongside the repeal of the duty on the Commission to produce public benefit guidance.[165]

91.  The Charity Commission's evidence argued that there was a "lack of certainty as to the law relating to the public benefit requirement for the advancement of religion" since the passing of the Charities Act 2006. This lack of certainty, and the Commission's interpretation of the Act, have led to the questioning of the charitable status of independent schools and the Plymouth Brethren Christian Church (or Exclusive Brethren) and concerns over the wider impact on faith charities.

92.  In its approach to the question of public benefit, the Charity Commission chose not to rely on previous jurisprudence, as it could be argued Parliament intended, in the light of the vacuum of definition left by the Act. Ultimately the Charities Act 2006 is critically flawed on the question of public benefit and should be revisited by Parliament.

93.  We recommend that the removal of the presumption of public benefit in the 2006 Charities Act be repealed, along with the Charity Commission's statutory public benefit objective. This would ensure that no transient Government could introduce what amounts to substantive changes in charity law without Parliament's explicit consent. If the Government wishes there to be new conditions for what constitutes a charity and qualifies for tax relief, it should bring forward legislation, not leave it to the discretion of the Charity Commission and the courts.

100   Cabinet Office, Trusted and Independent, p 8 Back

101   Ibid. pp 8-9 Back

102   Charity Commission, Analysis of the law underpinning charities and public benefit, December 2008 Back

103   Charities Act 2006, section 3 Back

104   The Independent Schools Council -v- The Charity Commission and others, The Upper Tribunal Tax and Chancery Chamber decision, TCC-JR/03/2010, 14 October 2011 Back

105   Ev 91 Back

106   The Independent Schools Council -v- The Charity Commission and others, The Upper Tribunal Tax and Chancery Chamber decision, TCC-JR/03/2010, 14 October 2011 Back

107   Ibid.  Back

108   Ev w89 Back

109   Ibid. Back

110   Letter from Kenneth Dibble, Charity Commission, to Julian Smith, 7 June 2012, Back

111   "Updated statement on Preston Down Trust", Charity Commission,, 6 February 2013 Back

112   Qq 192-193 Back

113   Ev 152, Charities Act 2006, Section 3 Back

114   Ev 99 Back

115   Erskine May, 24th edition (London, 2011), p 231 Back

116   Ibid. p 232 Back

117   HC Deb, 25 Oct 2006, col 1608 Back

118   Ibid. Back

119   Ibid. col 1609 Back

120   Q 26 Back

121   Qq 142, 143 Back

122   Q 143 Back

123   Q 148 Back

124   Q 25 Back

125   Q 77 Back

126   Ev w89 Back

127   Q 189 Back

128   Q 190 Back

129   Ev 143 Back

130   Q 150 Back

131   Q 152 Back

132   Q 240 Back

133   Ev w83 Back

134   Ev w92 Back

135   "Open Brethren write to the Charity Commission to stress differences with Exclusive branch", Third Sector, 14 January 2013 Back

136   Ibid.  Back

137   Qq 226, 228 Back

138   Ev 152 Back

139   Ibid. Back

140   The Independent Schools Council -v- The Charity Commission and others, The Upper Tribunal Tax and Chancery Chamber decision, TCC-JR/03/2010, 14 October 2011 Back

141   Ev 152 Back

142   Ibid. Back

143   Ibid. Back

144   Ev 152 Back

145   Ev 99 Back

146   Ev w98-154, ev w162 Back

147   Qq 231-233 Back

148   Q 324 Back

149   "Law & Governance - Points of law - Paganism fights on principle", Third Sector, 11 December 2012 Back

150   Ev 99 Back

151   Ev w47 Back

152   "Preaching to the unconverted", The Board of Deputies of British Jews, December 2012,  Back

153   Q 530 Back

154   Q 523 Back

155   Q 542 Back

156   Ev 141 Back

157   Ev 141 Back

158   Cabinet Office, Trusted and Independent, p 29 Back

159   Q 508 Back

160   Q 557 Back

161   Qq 145, 148 Back

162   Q 148 Back

163   Ev 143 Back

164   Ibid. Back

165   Ev w89 Back

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Prepared 6 June 2013