10 Post-legislative scrutiny of the
Charities Act 2006
52. Charities play a vital role in our society. We
follow the work of charities and of the Charity Commission as
the Cabinet Office has a watching brief over the Charity Commission,
which is a non-ministerial department. In the 2012-13 Session
we carried out post-legislative scrutiny into the Charities Act
2006. This was a major piece of charity legislation, intended
to reduce bureaucracy, particularly for smaller charities; to
modernise the definition of "charitable purposes"; to
modernise and increase the accountability of the Charity Commission;
and to maintain public trust in charities.[66]
53. Our inquiry followed a number of important developments
in charity law and policy, including long-running legal battles
on the issue of public benefit for religious organisations and
independent schools; media reports of significant public concern
caused by face-to-face fundraisers, or "chuggers"; and
the reduction in the Charity Commission's budget by 33% in real
terms between 2010/11 and 2014/15.
54. Our inquiry was thorough and comprehensive; we
received almost 200 pieces of written evidence, and held six oral
evidence sessions. We also commissioned a review of charity legislation
by the National Audit Office to inform our inquiry.
55. The Government accepted many of our recommendations.[67]
The self-regulation of fundraising has been put "on-notice"
as we recommended; with a commitment from the Government to report
back to Parliament in 2017.[68]
The Government also accepted in principle the recommendation that
charities should publish their spending on campaigning and political
activity. The Charity Commission will also take forward our recommendations
for a proportionate and flexible system of fines for late returns
to the Commission; and for certain charities to declare how much
of their income was received from public or government sources
and how much was received from private donations.[69]
56. We warned that the proposed introduction of charges
for the registration of new charities or the submission of annual
returns would be, quite simply, a tax on charities and charitable
work. The proposed charges would have acted as a block on the
creation of new charities and the dynamism and charitable spirit
of the volunteers working hard in their communities, and we welcome
the Government's decision to accept our view.[70]
57. The Government accepted our "compelling"
argument against an increase in the threshold for compulsory registration
with the Charity Commission, which the Committee argued could
reduce public trust in charities. The Government also agreed with
the Committee that giving charities an automatic right to pay
trustees could undermine the voluntary ethos at the heart of the
sector.[71]
58. We were disappointed that the Government failed
to accept the need for Parliament to legislate to clarify the
legislation on the question of charities and public benefit. We
welcomed, however, the Government's view that the public benefit
test should not be such a significant focus of the Charity Commission's
resources when compared to its other core regulatory objectives.[72]
We note that the unaddressed issue of public benefit may face
our successor Committee.
59. Our scrutiny of the Government's approach to
the charitable sector during this Parliament also included our
inquiry into the 'Big Society', which the Prime Minister placed
at the centre of his political agenda, and which occupied a central
place in the Coalition Agreement. We warned that the public had
little clear understanding of the Big Society project, and there
was confusion over the Government's proposals to reform public
services. We noted the uncertainty about how many charities in
general, and small and local community groups in particular, were
willing and able to deliver public services.[73]
66 Public Administration Select Committee, Third Report
of the Session 2013-14, The role of the Charity Commission and "public benefit": Post-legislative scrutiny of the Charities Act 2006,
HC 927, December 2013 Back
67
HM Government, Government Responses to: 1) The Public Administration Select Committee's Third Report of 2013-14: The role of the Charity Commission and "public benefit": Post-legislative scrutiny of the Charities Act 2006 2) Lord Hodgson's statutory review of the Charities Act 2006: Trusted and Independent, Giving charity back to charities,
Cm8700, September 2013 Back
68
As above Back
69
Public Administration Select Committee, Fourth Special Report
of Session 2013-14, The role of the Charity Commission and "public benefit": Post-legislative scrutiny of the Charities Act 2006: Charity Commission Response to the Committee's Third Report of Session 2013-14,
HC 927, December 2013 Back
70
HM Government, Government Responses to: 1) The Public Administration Select Committee's Third Report of 2013-14: The role of the Charity Commission and "public benefit": Post-legislative scrutiny of the Charities Act 2006 2) Lord Hodgson's statutory review of the Charities Act 2006: Trusted and Independent, Giving charity back to charities,
Cm8700, September 2013 Back
71
HM Government, Government Responses to: 1) The Public Administration Select Committee's Third Report of 2013-14: The role of the Charity Commission and "public benefit": Post-legislative scrutiny of the Charities Act 2006 2) Lord Hodgson's statutory review of the Charities Act 2006: Trusted and Independent, Giving charity back to charities,
Cm8700, September 2013 Back
72
HM Government, Government Responses to: 1) The Public Administration Select Committee's Third Report of 2013-14: The role of the Charity Commission and "public benefit": Post-legislative scrutiny of the Charities Act 2006 2) Lord Hodgson's statutory review of the Charities Act 2006: Trusted and Independent, Giving charity back to charities,
Cm8700, September 2013 Back
73
Public Administration Select Committee, Seventeenth Report of
Session 2010-12, The Big Society, HC 902-I, December 2011 Back
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