Supplementary memorandum from the Home
Office (DCH 352)
THE REGULATORY IMPACT ASSESSMENT (RIA)[1]
COSTS TO
THE LOCAL
AUTHORITIES
In terms of costs to the local authorities the
potential impact of the draft Charities Bill is limited to the
introduction of a new unified scheme for public collections.
A copy of the consultation on public collections
was sent to all the local authorities in England and Wales as
well as the London Boroughs. A Partial Regulatory Impact Assessment
accompanied the consultation and asked for information in terms
of costing.
Using information provided by 37 local authorities
(including the City of London) the Government was able to provide
an estimate as to the cost of administering the current licensing
regime. The RIA suggests that the average figure should be treated
with caution and goes on to explain that the costs varied considerably
from one local authority to the next.
The Government has assessed the cost impact
of the new scheme on local authorities as neutral. It has reached
that conclusion by comparing the requirements of the current licensing
regimes with the requirements of the proposed scheme. In some
respects the scope of the licensing regime has been extended,
for example, the extension of the definition of public place and
the inclusion of direct debit solicitation but in other respects
it has been reduced, for example, by the removal of the collection
of goods house to house from the scope of the scheme and the implementation
of the lead authority proposal.
The Government recognises that under the proposals
there would be particular cost implications for the London Boroughs
and has agreed that funding would be provided for that.
The Government is confident in the assessment
of the cost impact on local authorities provided in the RIA. It
is the best estimate of costs given the information available.
Notwithstanding that, the Home Office would welcome representations/evidence
from the Local Government Associations about costs and will continue
to meet with them to discuss their concerns.
PUBLIC BENEFIT
CHECKS
The RIA does not consider the costs to the Charity
Commission of undertaking public benefit checks, as this measure
is not included in the legislation. The RIA considers only the
costs of implementing the provisions of the draft Bill. The public
benefit check would be an administrative mechanism for the Charity
Commission to check on the public character of charities.
Given that the Charity Commission is currently
refining the nature and scope of these checks, any figures produced
at this stage would be highly speculative.
TAX RELIEFS
FOR NEW
CHARITIES
It is unlikely that the Charities Bill would
lead to any significant increase in the number of charities entitled
to tax reliefs. The proposed definition of charity, that is the
extension of the list of charitable purposes, reflects what is
currently considered to be charitable today and would not result
in automatic increase in the number of organisations having charitable
status.
Both exempt and excepted charities, while not
registered with the Charity Commission, are currently entitled
to claim tax relief from the Inland Revenue and domestic rate
relief.
ENFORCEMENT/MONITORING
COSTS
The majority of the provisions in the Bill are
permissive rather than restrictive.
Those measures that do require enforcement,
such as ensuring the registration of exempt and excepted charities,
have been included within the RIA and are based on figures provided
by the Charity Commission.
The one area where the policy remains within
the enforcement remit of the Home Office is the possible implementation
of regulatory mechanisms should the self-regulation of fund-raising
fail. The criteria to decide whether self-regulation is working
would be applied via secondary legislation so would not form part
of the current RIA.
Monitoring and evaluating the legislation will
be the responsibility of the Home Office and Charity Commission.
Costs associated with this work would be from within existing
resources.
CONFIDENCE IN
THE RIA
Every effort has been made to ensure that the
RIA is as accurate as possible. A reasonable degree of variance
has been built in to the costs given within the RIA and a range
of possible costs has been given on most areas. We are confident
that the figures within the RIA represent the most accurate representation
of the costs involved and remain intrinsically sound.
August 2004
1 A note on this was sought from the Home Office following
the evidence given by Fiona Mactaggart and Richard Corden on 21
July 2004. The Committee specifically requested details on the
RIA with regards to local authorities' costs, the costs to the
Charity Commission of carrying out public benefit checks, the
costs of additional tax reliefs to new charities, and the costs
of enforcing and monitoring the Bill. Back
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