Success factors
387. Throughout our inquiry we have asked how the
success of the draft Bill should be measured. The Home Office
has produced two papers for us on this subject.[407]
They said:
"The legislation is founded on recommendations
made by the Strategy Unit, in its report "Private Action;
Public Benefit", published in September 2002. The impact
of the legislation will be assessed against the aims identified
in that report, which are to:
(a) modernise charity law and status to provide
greater clarity and stronger emphasis on the delivery of public
benefit;
(b) improve the range of legal forms enabling
organisations to become more effective and entrepreneurial;
(c) develop greater accountability and transparency
to build public trust and confidence;
(d) ensure independent, fair and proportionate
regulation.
388. Mr Etherington of the NCVO told us that a successful
outcome from the Bill would be:
"A growing sector, growing levels of public
confidence, as measured, I think, by growing levels of fund-raising
income and growing levels of volunteer engagement…..[more
participation] … but we do not think that there will be a
huge burgeoning of numbers of charities as a result of this Bill".[408]
389. We accept that the high-level objectives for
the draft Bill are not susceptible to quantitive analysis. Nonetheless
we would expect to see quite soon after enactment specific examples
of the draft Bill either achieving the positive results forecast
for it or failing to do so. Much will depend on how the Charity
Commission conducts its tasks. There will be some figures which
can be measured:
a) The number of appeals to the Charity Appeal
Tribunal - the Regulatory Impact Assessment envisages a very tentative
figure of 50 cases a year - a substantial variation either way
from that figure would require some explanation. Similarly, the
success rate of appeals will merit closer study.
b) The number of Charitable Incorporated Organisations
set up - while a slow initial take-up might be expected, we would
expect hundreds of charities to be using this model within three
years.
c) The number of mergers - it may be that there
will be a large number of mergers initially falling to a lower
rate after the backlog is cleared.
390. All these figures should appear in the Charity
Commission's annual report and all interested parties will be
able to question whether the individual provisions of the Bill
are living up to expectations.
391. We recommend that the annual reports of the
Charity Commission should set out the measurable consequences
of the provisions in the new legislation and explain any variations.
392. We have been told that the Home Office will
monitor the impact of the legislation, and that it proposes to
conduct a review of the legislation after a period of five years
following enactment and that the review will assess the impact
of the legislation, and will be published.[409]
While at first concerned that this five year review period seems
long, we accept that the high-level objectives of the draft Bill
probably cannot be judged properly over a shorter timescale.
393. We recommend that the Bill should contain
a requirement for the Secretary of State to review and report
to Parliament on the impact of the Act no later than five years
after Royal Assent and that report should include an assessment
of the effect of the legislation on public confidence in charities,
the level of charitable donations and the willingness of individuals
to volunteer.
394. We have referred in paragraphs 172-192 above
to the accountability of the Charity Commission to the sector
and to Parliament. Our firm impression from taking oral evidence
from the Commission during this inquiry is that a more regular
airing of the Commission's work before a parliamentary committee
would be mutually beneficial. While the Commission's decisions
will, under the draft Bill, be accountable to the Charity Appeal
Tribunal, its overall operation will not. A regular annual evidence
session with a departmental committee would provide an opportunity
for the Commission to explain its finances, working methods and
policy.
405 
