Memorandum from Tom Levitt MP (DCH 189)
I am writing in my capacity as Chair of the
All Party Parliamentary Group on Charities and the Voluntary Sector.
The group welcomes the publication of the draft
Charities Bill for pre-legislative scrutiny. This is a much needed
reform that will update and strengthen the legal and regulatory
framework for charities. As well as addressing the confusion and
inconsistencies that mar existing charity law, the draft Bill
also makes clear the link between charity and public benefit.
These measures will, we believe, enhance public trust and confidence
in the charitable sector.
The APPG was very pleased that three members
of the scrutiny Committee took the time to attend our recent meeting
and talk about the draft Bill and the pre-legislative process.
As you are aware, our members have significant experience of the
charitable sector as well as considerable knowledge of issues
that affect charities and charity trustees. Of particular concern
is the question of trustee liability where the individuals concerned
have acted in good faith. We believe that this is a real disincentive
for those interested in taking on the role of trustee and unless
addressed could make it more difficult for charities to recruit
in future.
We are therefore pleased that the draft Bill
does make some provision for this:
— the creation of a new legal form,
the Charitable Incorporated Organisation (CIO) will provide limited
liability in the same way that a company limited by guarantee
does; and
— the proposal to give the Charity
Commission the power to relieve from liability for breach of trust
or duty provided that he or she has "acted honestly and reasonably".
Both measures will go a long way towards addressing
the concerns of trustees and will make a real and practical difference.
Members also expressed some concern that the legal position of
trustees in relation to liability insurance remains unclear.
A further issue raised at our meeting is the
role of the Charity Commission and the need for this role to be
clarified in law. Members of the APPG cited examples of cases
where, in their experience, the Charity Commission had been heavy
handed and where the wide range of advice and information coming
from the Commission made it more, rather than less difficult for
trustees to be clear about their own role. There is a concern
that the draft Bill extends the role and powers of the Charity
Commission without placing any limits or responsibilities in terms
of how it exercises those powers.
I hope that the Joint Committee will take on
board these issues as you consider the draft Bill and we wish
you well with your work.
June 2004
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