Memorandum from Universities UK (DCH 315)
INTRODUCTION
Universities UK is the representative body for
all universities in the United Kingdom. We support and promote
the work of Universities, a thriving and diverse sector which
provides benefits for all. UUK membership includes institutions
that are exempt charities, institutions that are registered charities,
institutions established by Royal Charter and institutions that
are companies limited by guarantee. All the members of UUK take
their obligations under Charity Law seriously and ensure that
they act in an appropriate and responsible manner.
Universities UK strongly supports the inclusion
of "the advancement of education" in the Bill as a charitable
purpose. Universities provide benefits both to the increasing
number of individuals who attend universities and to society as
a whole. The passage of the Higher Education Act 2004 and the
establishment of the Office for Fair Access will mean that universities
can build on the widening participation work they already carry
out and provide financial help to students through larger bursaries.
They also engage with their local communities, for example, through
the provision of artistic and cultural events and through the
use of their sporting facilities. A recent UUK publication in
partnership with Sport England found that 88% of institutions
have partnerships with local sports clubs[158].
UUK would be happy to provide the Committee with further examples
of such work.
QUESTIONS
Does the draft Bill strike the right balance between
flexibility and accountability? How can the danger of over-regulation
be avoided? How will this affect smaller voluntary-run charities?
Universities UK supports the proposal for principal
regulators to be identified for HE institutions in England and
Wales. The original purpose of this approach was to ensure that
existing mechanisms for accountability were used as much as possible
and to avoid unnecessary increased bureaucracy. We wholeheartedly
support this principle and encourage the Home Secretary to ensure
that this is sufficiently prominent in the legislation that identifies
the principal regulator for the sector. The Home Office has already
accepted that the higher education sector is highly regulated
and used this as an example of why the principal regulator route
was being proposed. A balance will need to be struck between ensuring
that all charities are effectively accountable, and ensuring that
the accountability regime is flexible enough to accommodate sector
specific conditions.
The danger of over-regulation can best be avoided
by ensuring that there is minimal change in the powers of principal
regulators and there is clear guidance to ensure minimum regulation
and maximum use of existing accountability mechanisms. The best
approach to ensure effective accountability with minimum regulation
is a risk-based sampling approach.
Will the Bill improve public confidence in charities?
Will it encourage more giving and volunteering?
Any general reassurance on the accountability
of charities is welcome as is the clarification provided by the
Bill about the definition of a charity. We hope that this will
support universities in their efforts to build up endowments.
Are the 12 new charitable purposes the draft Bill
proposes for a charity satisfactory—should there be additions
or deletions? Is the phrase "public benefit" best left
undefined in the Bill? Do fee-paying schools which are charities
demonstrate adequate public benefit arising from their activities?
Yes, the 12 new charitable purposes are satisfactory.
Universities UK strongly supports the inclusion of the "advancement
of education" as a charitable purpose. The phrase public
benefit is best left undefined because a definition in the Bill
would be too rigid for the diversity within the charitable sector.
Are there aspects of the draft Bill which would
permit the charity and voluntary sector to play a greater role
in the delivery of public services if they wished to do so?
No comment.
What are the likely benefits and costs of the
draft Bill? What level of funding will be necessary for the Charity
Commission to carry out its additional tasks effectively?
The benefits are in general increased public
reassurance, although in relation to the HE sector there is little
evidence that there was public concern about the charitable status
of institutions or that institutions were failing to comply with
Charity Law. The costs of the draft Bill in the HE sector will
depend upon the way the principal regulator undertakes its role.
For example a rigid insistence of the adoption of the Charity
Statement Of Recommended Accounting Practice (SORP) would involve
considerable administrative costs, whereas it is suggested that
there should be a phased development of the HE SORP to meet the
needs of the Charity SORP, thereby reducing administrative costs
whilst achieving the same aim.
Is it right that the draft Bill does not include
the recommendation in the Strategy Unit consultation paper, Private
Action, Public Benefit, that charities should be allowed to trade
as part of their normal activities without the need to set up
a trading company?
Whilst recognising the risks associated with
allowing charities to engage in trading activities, it is suggested
that such trading activities should be allowed, perhaps with reference
to the setting of a maximum turnover. This could be related to
the statutory audit threshold for small companies, currently £5.6
million or a maximum percentage of turnover, say 10%, whichever
is the lower.
Are the proposals to regulate fund-raising workable?
No comment.
Are the specific proposals in the draft Bill (such
as the new corporate legal form, the Charitable Incorporated Organisation)
adequate, workable and beneficial?
No comment
July 2004
158 Manoussakis, paragraph 45; Metropolitan Church,
paragraph 117. Back
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