Memorandum from Delegates at Mazars' Northern
Charity Workshops held on 23 and 25 June 2004 in Huddersfield
and Manchester respectively (DCH 316)
We set out below the comments made by delegates
under the eight themes under which the joint committee is considering
the draft Charities Bill.
1. Does the draft Bill strike the right balance
between flexibility and accountability?
Observation that the sector is not over regulated
presently.
Will provide clarity for smaller charities.
Standard information return—this may create
additional reporting work—it should be a part of the trustees
report which is presented in a standard format to allow comparison.
Audit changes. The Independent Examiner of charities
with income in excess of £250,000 has to be suitably qualified.
If he or she also has to be a Registered Auditor this would cause
difficulty as the Independent Examiner has to be an individual
not a firm and it is usually firms that are registered as auditors.
Consideration should be given as to whether
a firm can be an Independent Examiner.
2. Will the Bill improve public confidence
in charities? Will it encourage more giving and volunteering?
(we also considered greater flexibility to pay trustees within
this heading)
No—public are not aware of the Bill.
No—public give to charities they are akin
to.
Increased public profile of Charity Commission
would help.
Concern that if the Charity Commission does
not have the resources to handle its extra roles and responsibilities
they may be unable to deal with situations appropriately and give
the public less confidence.
Improving the education of the public on these
issues may assist in giving but not volunteering
Difficult to educate public—so unlikely
to have an effect on public confidence.
What does give the public confidence? There
is a problem with educating the public, the Bill is unlikely to
have an effect on the public confidence.
Could charity trustees not be "compensated"
rather than paid.
It is difficult to get trustees at all!
How would the bill deal with out of date trust
deeds—ie those that do not permit the payment of trustees?
It is a worry currently about not paying trustees
who could give a quality service that charities could be missing
out. However, this could be difficult if a problem (conflict?)
arises—how would the charity deal with it. On balance it
is not a good idea.
Legislation against payments to trustees gives
charities a good way out—"sorry we can't"
Relief for personal liability (for breach of
trust carried out in good faith) was welcome.
Payment of trustees—generally should be
discouraged. Perhaps Charity Commission should issue a standard
contract between trustee and charity.
3. Are the 12 new charitable purposes satisfactory,
is the phrase "public benefit" best left undefined and
do fee paying schools demonstrate adequate public benefit?
No other purposes that we are aware of.
Catch-all final subsection should be sufficiently
comprehensive.
Good that human rights has been included in
the headings.
One group felt that "public benefit"
should be left undefined; another group felt that it should be
capable of being clearly understood by the public and that it
should be defined.
Feeling that the benefit that schools provide
should be more clearly demonstrated.
Felt that schools should be charitable but should
be encouraged to widen public benefit in the community.
How do you discriminate between the high profile
public schools and more local schools and faith schools?
4. Are there aspects of the draft Bill which
would permit the charity sector to play a greater role in delivering
public services if they wish to do so?
Payments to trustees within the proposed rules
may help with this.
5. What are the likely costs of benefits of
the draft Bill?
The Charity Commission should have a substantial
increase in funding to carry out the additional tasks.
Concern that the Charity Commission may need
to charge fees to charities
6. Is it right that the draft Bill does not
include the recommendation that charities should be allowed to
trade without the need to set up a trading company?
Yes.
There should be a dispensation criteria of trading
up to a percentage of a charity's income.
Whilst recognising the problem, it would ease
the burden if trading were allowed in the charity. Good governance
should ensure that the risk element is minimised.
People may be prevented from taking low risk
trading ventures which could be important to keep a charity running.
7. Are the proposals to regulate fund raising
workable?
The reserve power of the Secretary of State
to veto aggressive fund raising and the potential impact on finances
of charities was a concern.
Concern that local authorities do not have resources
to deal with situations appropriately which could undermine public
confidence.
Will any rules tighten up where street collections
go, eg percentage going to administration, percentage to charitable
purposes, which is of interest to the public?
8. Are the specific proposals such as the
charitable incorporated organisation adequate workable and beneficial?
Yes.
Positive about CIO.
It would be better only reporting to one body.
Can Charity Commission cope with all the regulation,
will it be adequately funded?
CIO is a good idea.
July 2004
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