Memorandum from Association of Charity
Shops (DCH 50)
SUMMARY
1. The Association is the national umbrella
body representing the charity retail sector. Our 200+ charity
members run around 6,000 shops selling almost wholly second-hand
donated goods. On average 44% of stock is obtained by collections
made house-to-house and for some charities this increases to over
80%.
2. Besides raising around £100 million
per annum for the charitable work of their parent charities, charity
shops also play an invaluable role in reusing and recycling over
120,000 tonnes of textiles every year (between one quarter and
a third of the total textiles recycled or reused in the UK) and
deliver a vital social benefit to those on low incomes including
the unemployed, pensioners and students.
3. We have made a number of submissions
concerning the appropriate level of regulation that should apply
to the collection for goods for charity shops to the Strategy
Unit and the Home Office over the period of preparation of the
draft Bill. We are pleased that our representations that such
collections do not pose significant issues of public trust, confidence
or capacity have been accepted. The removal of such collections
from the licensing regime is welcome.
4. However, the benefit of this deregulatory
measure has been totally negated by the specific notification
requirements set out in section 66 C (2) of the draft Bill. The
requirement to notify the precise day or dates and locations of
each collection to local authorities at least 14 days and no more
than six months in advance takes no account of how these collections
are organised and is unworkable. Such a requirement would cost
charities very significant sums of money in administration and
result in shops running out of stock, suffering reductions in
sales and the sums they raise for charity. There is no proportionate
benefit from such a detailed notification system.
5. A change to this requirement in the Bill
is therefore vital if charity shops are not to be placed under
a disproportionate and potentially threatening notification regime
the penalties for breaking which would be severe (the new penalty
of a fine of up to £1,000 for failure to notify for each
offence). As the Standing Committee is particularly reviewing
whether or not the draft Bill introduces proportionate regulation
and whether the proposals for the regulation of fundraising are
workable, we seek the Committee's support for an appropriate amendment
to be made to the notification requirements for the collection
of goods and set out in more detail our arguments and alternative
proposal in support of this below. It is particularly pertinent
to note the Scottish Executive's positive statement in their consultation
document to the draft Charities and Trustee Investment (Scotland)
Bill that collections of goods for charity shops will not be regulated
in Scotland as there is no evidence of public nuisance or confidence
issues associated with such collections and they remain outside
the scope of the definition in Scotland of "public benevolent
collections."
6. Finally, as a membership body whose members
are mainly small, locally based organisations, we are concerned
at the short time available for responses to be made to the Standing
Committee. We have circulated our response to all our members
for their information so that they have a chance to develop appropriate
responses of their own but in reality, few will have the resources
to do this within the timescale set out.
HOW CHARITY
SHOPS COLLECT
GOODS
7. Charity shops are relatively small in
area. Stock is donated directly to the shop and in addition many
charities collect house-to-house by the dropping off of collection
sacks through letterboxes and subsequently collecting from doorsteps.
The activity is largely impersonal and there is much evidence
to show that donating to charity shops in this way is strongly
supported by the public (see the Association's earlier submissions
to the Home Office and Strategy Unit at Annexes 1 and 2). This
activity also contributes significantly to environmental targets
for the reuse and recycling of clothing, books etc.
8. Because the shops are small, the space
allocated for the receipt and sorting of stock is restricted.
Stock received is sorted, priced, put on the shop floor or removed
for recycling on a daily basis. This work is almost entirely carried
out by an army of over 100,000 volunteers. Maximising sales is
dependent on maintaining good stock levels and regularly refreshing
the stock on sale. The collection of goods house-to-house supports
this where necessary. The collection activity is devolved to local
level (either to the individual shop or to a small group of shops)
and decisions on when and where to collect are based on stock
levels, anticipated needs, the availability of collectors and
vehicles on a regular and continuing (weekly) basis. Consideration
is also given to other management information on stock quality,
rates of return and the good practice requirement of the Association's
own Kitemark scheme to avoid overlapping collections with other
charities.
9. Three case studies illustrate how collections
are organised by different-sized charity shop organisations and
how the proposed detailed notification system would impact on
them.
(i) A small local charity with two shops
in two different local authority areas in Greater London collects
house-to-house intermittently when stock levels are low. After
a particularly wet week they find stock levels alarmingly low
and arrange for their volunteer driver to come in and work with
one of their staff to collect house-to-house for a couple of days.
Had they been constrained by the proposed notification system—they
would have had to have notified the local authorities concerned
at least 14 days in advance of the date or dates of the collections
(unknowable at that point in time) and either could not have carried
out the collections and faced a significant decline in the sales
in their shops or would have been breaking the new law and be
liable to a substantial fine. Neither is a reasonable position
to be placed in.
(ii) A children's hospice in the Midlands
running around 25 shops in 10 different local authority areas
currently applies for licences to collect from each and receives
permission for periods of up to a year on the basis that they
will be collecting between once a month and once a week for each
for their shops. It is worth noting that specific date notification
is currently not required by local authorities granting licences
to collect; instead a generic description of the frequency and
general location of the collections is accepted in granting licences.
Although this charity will be relieved of the burden of applying
for these licenses—they would have a far heavier burden
to carry in notifying exact collection dates and locations to
each of the local authorities for each collection at least 14
days in advance. So whereas they currently make 10 applications
and 10 reports in a year—they would be faced with attempting
to make a notification for each collection carried out by each
shop to each local authority. On an average of one collection
per shop per week this would amount to a minimum of 25 x 50 (operating
weeks in the year) = 1,250 notifications a year assuming that
no one shop collects across more than one local authority area
(very unlikely in urban settings). The bureaucratic burden on
the charity would significantly raise its operating costs and
decrease what its shops raise for the hospice's vital work. And
this assumes that the date or dates of the collections and precise
locations can be specified accurately in advance, which they cannot
because collections are carried out continuously as and when the
need for stock arises, when vehicles and drivers are available
and in the light of other management information such as response
rates, quality of stock and where other recent collections have
taken place.
(iii) A national charity with 450 shops currently
in receipt of a Home Office Exemption order currently makes approximately
45,000 house-to-house collections per annum. If their shops managers
failed to make a notification for just 10% of these collections
this could cost the charity £4.5 million a year in fines
or half the funds raised by their shops for their charity's work.
This is clearly an untenable situation and is certainly not what
the draft Bill is intended to achieve in "supporting and
encouraging a vibrant and diverse voluntary sector."
We hope it is clear from the above that there
is an urgent need to modify the notification requirements set
out in the draft Bill for the collection of goods in order that
an unworkable level of regulation is not introduced as part of
the new Bill.
FRAUDULENT COLLECTIONS
10. We understand that the notification
requirement has been included in the draft Bill in order that
local authorities are well placed to deal with the problems of
fraudulent collections. The Association has always argued that
by far the gravest problems of house-to-house collections arise
from the "bogus" or fraudulent collections made by commercial
bodies purporting to be collecting for some "charitable"
or benevolent purpose—see page 9 of the Association's earlier
submission at Annex 1 for examples. We have therefore supported
the need for local authorities to know which charities are collecting
in their areas so that they can focus their attentions on unauthorised
collections. We believe this can be achieved by a simple annual
notification by charities collecting goods house-to-house that
they will be collecting in the area giving details of the approximate
frequency or scale of collections along with details of the purpose
of the collections, their general location and the details of
the organiser. This would enable local authorities to maintain
a register of authorised collections that could be referred to
if there was a cause for concern. This is the model proposed by
the Association in its original submission to the Strategy Unit
(paras 18—20 of Annex 2 attached). Fraudulent collections
carried out by bogus companies generally blitz an area with collection
sacks and then move on to another town or county within days.
They mislead the public as to the "charitable" nature
of the collection. Catching or stopping them is difficult and
certainly would not be helped by knowing on which day or dates
charities were collecting. There is therefore no proportionate
benefit in a specific date notification system. What is required
is for Trading Standards and the police to act swiftly and effectively
where such collections take place without the required prior notification
or where other aspects of the law have been broken.
AMENDMENT SOUGHT
11. We therefore believe that paragraph
66 C (2) of the draft Bill should be amended so that the notification
required for the collection of goods house-to-house by charities
to local authorities should be made only on a periodic basis (eg
annually) and in more general terms as regards timing/frequency
and location. It should not be required for every individual collection.
This is currently the type of information submitted to local authorities
when applications for local licences to collect goods house-to-house
are made. Such a general notification system would continue to
provide local authorities with the information necessary to enable
them to monitor and control unauthorised collections whilst enabling
charity shops to continue to successfully collect stock, raise
vital funds for their charities and play their role in maximising
re-use and recycling. In addition appropriate guidance should
be issued to local authorities as to the required format of the
notification information.
We are happy to provide further information
in support of our submission if required and are grateful for
the Committee's active consideration of our concerns.
June 2004
| 
