Memorandum from British Heart Foundation
(DCH 153)
1. GENERAL COMMENTS
1.1 In general, we welcome the bill's proposals
to modernise charity law and initiatives to increase public trust
and confidence in the sector.
1.2 We support the aims of the Coalition
for a Charities Act, believing that:
— the Charity Commission should be
able to ensure that charities continue to demonstrate public benefit
after registration;
— the Act should provide for the development
of new charitable purposes to allow for charity law to adapt over
time to reflect society; and
— the Act should focus the new Charity
Commission on its primary purpose of ensuring that public benefit
is at the heart of charitable purposes, not, as currently proposed,
be given a remit to assess the social and economic impact of charities.
2.1 COMMENTS
RELATING PRINCIPALLY
TO SECTION
66(C) WHICH
DEALS WITH
THE DOOR
TO DOOR
COLLECTION OF
GOODS
(i) The Foundation welcomes the provision
that the collection of goods on a door to door basis should be
exempt from the requirement to obtain a certificate of fitness
or permit. The current regulations were not designed with this
type of collection in mind and are, in many respects, unworkable.
It has been accepted that this type of collection does not raise
issues of public confidence or capacity (not printed)[92].
(ii) Unfortunately the potential benefits
of this deregulation both to the Foundation and, we believe, to
almost all charities which operate charity shops are totally eliminated
by the requirements of Section 66(c)(b); that the details of each
collection must be notified to the local authority not less than
14 days before the day on which the collection commences. For
reasons explained below this requirement would add hugely to the
charity's expenses in running its 450 shops, has the potential
to make it liable to fines running into millions of pounds and
would almost certainly make the operation of its shops effectively
impossible.
(iii) Each of the Foundation's shops undertakes
about 2 (and in some cases more) small scale collections each
week, each covering only a few streets, but totalling some 45,000
collections each year. The sale of goods collected door to door
accounts for over 80% of the total shops' total turnover. Less
frequent but larger scale collections are impractical because
of lack of storage space in shops and because there are too few
staff to sort and price large volumes.
(iv) Each shop turns over most of its saleable
stock each week and the size and number of future collections
cannot be planned in any detail as much as 14 days in advance
since the stock requirement cannot be known at that time.
(v) Even where a collection has been planned
(usually a day or two before it takes place) its date may be subject
to change because of the non availability of a collector and/or
vehicle or for other operational reason. In addition the precise
street or streets in which a collection will take place cannot
be notified with certainty (the Draft Bill refers to the requirement
to notify "locality"). This is because a collector may
have to change the collection plan if he or she learns on checking
with householders that another charity has recently collected
in that street.
(vi) The Draft Bill quite rightly seeks to
deregulate the door to door collection of goods. In consequence
it does not give local authorities the power to specify where
or when such collections should take place and it has been demonstrated
that this would be both unworkable and unnecessary. It can therefore
be of no possible benefit to local authorities to receive and
record tens of thousands of notifications in respect of an activity
which is otherwise exempt from the provisions of the Act.
(vii) The proposed fine of £1,000 for each
failure to notify a collection is totally disproportionate. The
nature of the activity requires that only individual shop managers
can decide that a collection is necessary and make the notification.
All shop managers work under pressure and they vary considerably
in knowledge and experience. It is not inconceivable that due
purely to human error perhaps 10% of collections might not be
notified. A failure rate at this quite modest level could cost
the Foundation some £4.5 million in fines equivalent to about
50% of the net revenue which it receives from its shops. A failure
rate of 20% would eliminate this revenue.
2.2 AN ALTERNATIVE
PROPOSAL
(i) The Foundation's alternative proposal,
and that of the Association of Charity Shops, is that charities
should be required to notify annually each local authority in
whose area they intend to collect goods on a door to door basis.
This would give local authorities all the information which they
require and are able to use. There can be no benefit from more
frequent notification.
(ii) The Foundation's proposal meets a main
objective of the bill to minimise bureaucracy and reduce administrative
costs. It would also enable local authorities to identify easily
organisations which had not notified a legitimate intention to
collect and to take appropriate action. It has been accepted that
fraudulent collections by commercial organisations, which mislead
the public into believing that their purpose is charitable, are
a significant problem.
(iii) The British Heart Foundation fully supports
the submission of the Association of Charity Shops which comments
on the likely effects of the proposed regulations not only on
national charities such as the Foundation but also on charities
which operate shops locally or regionally.
2.3 CLOSING COMMENTS
We believe that section 66 (c) (b) is unworkable
and that the proposal would be catastrophic to the charity's income
from our charity shops. We hope the committee will consider our
proposal, which has been approved by a large number of charities.
We would welcome the opportunity to give evidence
to the committee on this aspect of the Bill.
Note to clerk of committee
If the members of the Committee would find it
beneficial to visit a charity shop we would be delighted to facilitate
a visit.
June 2004
92 The Gallup Organisation-research conducted 2001. Back
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