Memorandum from the Royal Borough of Kensington
and Chelsea (DCH 142)
1. The Royal Borough of Kensington and Chelsea
("RBKC") welcomes the draft Bill to the extent that
it seeks to update the current legislative framework surrounding
charitable organisations and to introduce comprehensive regulation
of street collections.
2. RBKC's observations relate to that part
of the draft Bill which deals with public collections.
3. Whilst RBKC believes that local authorities
are best placed to carry out the enforcement functions under the
proposed new system, it considers that a central authority such
as the Charities Commission should be responsible for licensing
public collections.
4. RBKC is firmly of the view that it would
not be able effectively to fulfil the licensing functions envisaged
by the draft Bill without very significant additional funding.
5. Furthermore there is little if any evidence
of the likely costs of enforcement and it may well be that additional
funds will have to be secured in order to deal with that aspect
as well.
6. RBKC has various other concerns about
the detail of the proposals and the way in which the system would
operate in practice. In particular RBKC considers the timescales
for dealing with applications for certificates and permits to
be unworkable.
BACKGROUND
1. The Royal Borough of Kensington and Chelsea
("RBKC") welcomes the opportunity to comment upon the
proposals contained in the draft Charities Bill relating to public
collections. RBKC participated in the consultation exercise following
the publication of "Public Collections for charitable, philanthropic
and benevolent Purposes" in September 2003.
2. In essence, RBKC's position remains unchanged
from that set out in response to consultation dated December 2003,
a copy of which is attached hereto for ease of reference.
3. Having considered the relevant provisions
of the draft Bill in some detail, RBKC nevertheless wishes to
comment further on the proposed local authority licensing system
for public collections.
GENERAL REMARKS
4. In principle RBKC welcomes the draft
Bill to the extent that it seeks to update the current legislative
framework surrounding charitable organisations which is both arcane
and fragmented. Furthermore RBKC agrees that there is merit in
harmonising the system in order to take a consistent approach
to public collections both in and outside London.
5. RBKC recognises the need for a stringent
and comprehensive licensing system for charities and particularly
approves the attempt by the proposed legislation to bring within
the regulatory system individuals soliciting direct debit mandates
in the street. This is a phenomenon about which RBKC has long
been concerned as it appears to be one of the London Boroughs
which is targeted for this type of operation. This observation
is however subject to a caveat: RBKC is not satisfied that the
legislation as presently drafted fully addresses the problem caused
by the proliferation of this type of collection; nor does it,
in RBKC's view, tackle the increasing use by charities of individuals
earning commission ("commission agents"). These matters
are considered in more depth below.
6. RBKC's principal misgivings about the
proposed new system for licensing public collections surround
the financial and administrative burden that will be placed upon
local authorities as they struggle to administer the new scheme,
apparently without any income stream. RBKC is extremely concerned
that the draft Bill makes no mention whatsoever of any power to
charge for certificates and permits, although it is possible that
provision may be made for such a power by way of regulations made
under Clause 42.
7. If the proposed new regime is to work
it is imperative that local authorities carry out their responsibilities
effectively and efficiently. RBKC is firmly of the view that this
will prove impossible in the absence of very significant additional
funding.
8. RBKC concurs with the ALG in suggesting
that the Charities Commission, which already has responsibility
for determining applications for charitable status, would be far
better placed than local authorities to administer the licensing
scheme. Furthermore, such an arrangement would have the merit
of guaranteeing a centralised and thus consistent approach.
Will the legislation achieve what it sets out
to achieve?
9. The remainder of this response sets out
RBKC's observations in more detail.
10. RBKC welcomes the inclusion of "other
property" within the definition of "public charitable
collection" in clause 37. As stated in its response to consultation,
RBKC has of late become extremely concerned by the increasing
number of charitable collections within its area involving individuals,
who are often employed by charities on a commission basis, soliciting
direct debit details from the public. RBKC remains to be satisfied
that the legislation as drafted will tackle this problem.
11. Whilst RBKC appreciates that the term
"other property" may be construed to include direct
debit details, it considers that there would be merit in including
in the proposed new section 65(2)(b), after the words "to
give", the words "or to promise to give", in order
definitively to resolve what has hitherto been an area of uncertainty.
12. RBKC remains of the view that collections
of this type by commission agents should be banned altogether.
The legislation fails to accomplish this. Whilst RBKC recognises
that the proposed "due diligence" ground for refusing
to grant a certificate of fitness in clause 40, new section 66F
(1)(c) may serve to dissuade charities from using commission agents,
this test may prove difficult to apply in practice, as to which,
see below.
13. More fundamentally, RBKC is disappointed
that government has not seen fit to ban the use of agents who
are frequently paid a high rate of commission, something which
both reduces the proportion of donations benefiting the intended
recipient and encourages some agents to behave in an intimidatory
and aggressive manner towards members of the public.
14. RBKC welcomes the fact that the proposed
legislation (in enacting the old section 69) will enable permits
for collections to be refused on, inter alia, the basis
that other collections are taking place in the area and that "saturation
point" has been reached. This addresses RBKC's concern relating
to the proliferation of collectors of direct debit mandates.
Should Local Authorities be responsible for licensing
charities and for enforcing the new system?
15. Whilst RBKC welcomes the fact that the
draft Bill will give it some degree of control over public collections
taking place within its area, it considers that it will be wholly
unequal to the task of administering the licensing functions conferred
upon it in the absence of very significant additional funding.
The costs implications of the proposals are considered further
below. The absence of an appropriate income stream will place
an intolerable burden upon its Licensing Team which, by the time
the draft legislation comes into force, will already be struggling
to cope with its duties under the Licensing Act 2003 and, possibly,
the Gaming Act 2005.
16. RBKC stands by its original suggestion
that the Charities Commission should be responsible for licensing
charitable collections. However it is of the view that local authorities
are better placed to carry out the attendant enforcement functions,
albeit there are costs implications of this aspect as well.
FUNDING AND
RESOURCES
17. Nowhere in the draft Bill is there any
reference to a power to charge for certificates of fitness or
permits. RBKC is extremely concerned by this apparent omission
and would urge that provision is made for charging, whether it
be in the primary legislation or by way of regulations.
18. As to the level of the charge, RBKC
would like to see this set at a realistic level which covers not
only the licensing element but also the total cost of administering
and enforcing the new regime. If such does not prove to be the
case, RBKC is concerned that it will not be able to meet its new
responsibilities effectively.
19. At present there is very little, if
any, evidence to indicate what the cost of enforcement is likely
to be. RBKC fears that the cost could be high, especially given
some of the practical problems that may arise, as to which, see
below. RBKC is particularly concerned about this as it is one
of the London Boroughs which attracts large numbers of charitable
collections. Were the enforcement responsibilities to be passed
to RBKC and licensing responsibilities to go elsewhere, or in
the absence of the power to charge realistic fees for licensing,
it might be that additional funding would need to be secured to
cover the costs of enforcement.
20. Furthermore RBKC is concerned by the
costs implications of the appeal route set out in clause 40, new
section 66H. The risk of being held liable for costs in the courts
(particularly in the Crown Court) will place an additional burden
on local authorities and may lead to a reluctance to oppose appeals.
TIMESCALES
21. RBKC has concerns in relation to the
proposed timescales set out in the Bill clauses 40, new section
66D(3)(a) and clause 41(3), new section 67(3) and (3A). RBKC is
not satisfied that it would be possible to carry out all the necessary
inquiries during the tight timescale set by the new section 66D(3)(a).
Furthermore the question must be posed as to whether the police,
who will be responsible for carrying out the checks required by
the new section 66H, will have the resources to comply with the
tight time limits.
22. RBKC wishes to highlight the fact that,
under the legislation as presently drafted, new section 67(3A)
requires the inquiries referred to above to be carried out within
14 days of the application for a certificate of fitness if last-minute
applications for permits for collections are to be avoided. It
appears to RBKC that it will prove to be impossible to adhere
to these timescales.
OTHER PRACTICAL
ISSUES
23. RBKC notes that certificates of fitness
may last for a maximum period of five years. It anticipates difficulties
in dealing with applications for the same if all, or the majority
of, applicants ask for the maximum duration in that those certificates
will all come up for renewal at the same time.
24. In relation to collections which are
proposed to be carried out trans-authority, RBKC is of the view
that the test for determining which is the "appropriate local
authority" set out in clause 40, new section 66D(5)(c) is
not sufficiently clear; this may lead to disputes. The issue of
where a charity "principally conducts its business"
may prove a difficult one to resolve.
25. Of more concern is the fact that charities
may use this lack of clarity to exploit the system by consistently
making applications to authorities which they have identified
as being "soft targets".
26. Whilst RBKC welcomes the "due diligence"
ground for refusing certificates of fitness in clause 40, new
section 66F(1)(c) in that it should encourage those who operate
collections to exercise control over the way in which the collection
is carried out, the application of this criterion is likely to
cause practical difficulties. In the absence of a central register
it will be a difficult, costly and time-consuming process to determine
whether an applicant has been guilty of failing to exercise due
diligence in the past. This exercise will become impossible in
cases where a charity has moved its operations into a local authority's
area from elsewhere.
27. This consideration reinforces RBKC's
view that a central agency such as the Charities Commission should
be responsible for licensing charities.
CONCLUSION
28. RBKC welcomes the draft Bill in principle
to the extent that it seeks to regulate public collections in
a consistent and comprehensive manner. However it does not believe
that local authorities should be the recipient of licensing functions.
29. RBKC's principal concerns relate to
the question of where the resources to operate the new system
are to be found. However it has a number of other concerns on
the detail of the proposals and concerning the operation of the
new regime in practice.
30. RBKC would ask that its comments are
taken into account and would welcome the opportunity to make oral
representations to the Joint Committee if so invited. In addition
it would welcome the opportunity to have further input into the
detail of regulations and so on once the final decision has been
made.
June 2004
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