Memorandum from Wales Council for Voluntary
Action (WCVA) (DCH 131)
EXECUTIVE SUMMARY
1. Introduction
1.1 Wales Council for Voluntary Action (WCVA)
represents the interests of voluntary organisations, community
groups and volunteers in Wales. It has 1,000 organisations in
direct membership and is in contact with many more through national
and regional networks.
1.2 WCVA welcomes the publication of the
draft Charities Bill (the Bill) and commends the government's
commitment to reforming charity law. Our full response to the
Bill is set out in an accompanying document.
2. Key issues
2.1 WCVA welcomes the fact that the Bill
includes the provision to increase the number of members of the
Commission from five to nine, including the Chairman. However,
we are concerned over the provisions in Cl.1(3)(b) We believe
the appointment of a Welsh Commissioner to be crucial to the credibility
of the Commission in Wales and, therefore that the wording "so
far as reasonably practicable" should be removed—see
para. 3.8 of our full response.
2.2 We express reservations in para. 2.2
about the form the Bill has taken and feel a consolidating Bill
would have been preferable.
2.3 A number of Welsh language issues are
raised including that surrounding the primacy of Welsh constitutions
for legal interpretation—see para. 2.4.
2.4 The decision to forego the original
proposals concerning trading presented in Private Action Public
Benefit (PAPB) should be reconsidered—see para. 2.5.
2.5 Cl.44 of the Bill makes provision for
the Secretary of State to give financial assistance to charitable,
benevolent and philanthropic institutions in England only. The
relevant explanatory notes set out the government's rationale
for this clause and refer to a corresponding power held by the
National Assembly for Wales. WCVA wishes to draw to the Joint
Committee's attention a serious anomaly that has been inadvertently
created by these provisions, and refers it to our detailed comments
on this clause in para. 3.38.
2.6 Cl.1(b) should be removed to place the
meaning of "charity" solely on the requirement to have
exclusively charitable purposes and not rely on High Court jurisdiction—para.
3.1.
2.7 WCVA has significant reservations about
the development of new charitable purposes by analogy as set out
in Cl.2(4), and the impact the Commission's new social and economic
impact objectives will have on the interpretation of public benefit.
Our detailed comments are contained in paras. 3.4 and 3.6 respectively.
2.8 WCVA welcomes the Commission's general
function to support charities as expressed in Cl.5, S.1C(2) but
requires that this be undertaken within clearly defined boundaries
which recognise such support should be solely confined to regulatory
matters—para. 3.11.
2.9 WCVA welcomes the introduction of the
Charity Appeal Tribunal but feels its remit is too narrowly drawn—para.
3.13.
2.10 The power to facilitate mergers in
Cl.34 of the Bill is cautiously welcomed subject to the establishment
of clear guidelines in this respect—para. 3.32.
2.11 A variety of points are made in relation
to the provisions surrounding fundraising in paras. 3.33 to 3.37.
3. General issues
3.1 WCVA makes comment on numerous other
issue including: the omission of charitable purposes proposed
in PAPB; inclusion of excepted and exempt charities into the Commission
regime; cy-pre"s applications; audit and examination
of accounts; the charitable incorporated organisation; remuneration
for Trustee services, and the power to spend capital.
1. INTRODUCTION
TO WCVA
1.1. Wales Council for Voluntary Action
(WCVA) represents the interests of voluntary organisations, community
groups and volunteers in Wales. It has 1,000 organisations in
direct membership and is in contact with many more through national
and regional networks.
1.2. WCVA's mission is to strengthen voluntary
and community action at the heart of a civil society in Wales
that:
— is inclusive and offers equality
of opportunity;
— empowers people to participate and
fosters community leadership;
— encourages and promotes the independence
of voluntary action;
— celebrates and reflects linguistic
and cultural diversity and choice; and
— engages in genuine partnership with
other sectors on a "who does what best" basis.
2. GENERAL COMMENTS
ON THE
DRAFT CHARITIES
BILL
2.1. WCVA wholeheartedly welcomes the publication
of the draft Charities Bill (the Bill) and the opportunity to
submit evidence to the Joint Committee further to our response
to the consultation Private Action, Public Benefit (PAPB). That
response was based on wide consultation with the charity and voluntary
sector in Wales, including two meetings funded by the Cabinet
Office.
2.2. Whilst the modernisation of charity
law will enhance an already vibrant sector and further promote
the benefit it provides to the public, we regret the form the
Bill has taken. The wide consultation, and expressed strategy
to create a modern framework for charity activity, is not best
served by an amending Bill. In our opinion a consolidating Bill,
effectively bringing together in one piece of legislation all
extant statutory charity law, would have been preferable. The
Bill in its present form will not facilitate easy understanding
of the statutory regime by non-legally qualified trustees and
those managing charities.
2.3. In our earlier response WCVA said:
"The report recommends that legislation should enable the
number of Commissioners to be increased from five to nine, with
one Commissioner appointed by the Secretary of State for Wales;
and that the Charity Commission (CC) should open an office in
Wales. This responds to representations made by WCVA for a Commissioner
for Wales to ensure effective representation and oversight of
the Commission's work and role in Wales and we are pleased that
this proposal has been accepted." We welcome the fact that
the Bill includes the provision to increase the number of members
of the Commission from five to nine, including the Chairman, and
that consultation will take place with the National Assembly for
Wales concerning the appointment of one member. Our reservations
about the wording of the Bill, in this regard, are expressed below
in para 3.8.
2.4. An ongoing Welsh language issue deriving
from the language primacy of constitutional documents in Welsh
is reflected in Schedule 6 S69C(5) of the Bill (relating to the
new Charitable Incorporated Organisation (CIO)) and is dealt with
in our comments on Chapter 8 below. However, as a matter of general
principal WCVA is concerned that, for the purposes of legal interpretation,
the English version of a constitution is considered to be the
"master document" by the CC and the courts. We suggest
that if a charity constitution is submitted in Welsh then legal
interpretation should emanate from this version. A similar situation
pertains in the Companies and Insolvency Acts and thus we understand
the practical difficulties surrounding this language skills issue,
but this in itself should not be a barrier to addressing it at
a Commission and judicial level—if not in this Bill.
2.5. The decision of the government to resist
the proposals in PAPB concerning charity trading should be revisited.
It is fair to say that WCVA expressed some reservations about
the new trading regime, particularly relating to the proposed
duty of care (para 26, response to PAPB). However, we are concerned
that the pressure to omit this reform from the Bill has mainly
emanated from larger charities and does not reflect the needs
of medium and small-scale charities. Admittedly, there remain
concerns over liability but on balance WCVA is of the opinion
that, with suitable education surrounding the launch of the CIO,
charities of all sizes are sufficiently responsible to make their
own decision about pursuing this course or remaining with the
present system of utilising a non-charitable trading company (see
comments on Chapter 8 below). The benefit afforded by decreased
cost and administration, in our opinion, outweighs the perceived
risks of trading within a single charitable entity. And, it should
not be forgotten that many charities already trade in this manner
when pursuing a primary purpose trade or one in furtherance of
their objects—we are not aware that this has caused significant
liability problems.
2.6. Cl.44 of the Bill makes provision for
the Secretary of State to give financial assistance to charitable,
benevolent and philanthropic institutions in England only. The
relevant explanatory notes set out the government's rationale
for this clause and refer to a corresponding power held by the
National Assembly for Wales. WCVA wishes to draw to the Joint
Committee's attention a serious anomaly that has been inadvertently
created by these provisions, and refers it to our detailed comments
on this clause in Part 3 below.
2.7. The Board of WCVA is presently considering
its position in relation to the Coalition for a Charities Act.
WCVA wishes to reserve the right to make further submissions to
the Joint Committee on any new issues that may result from membership
of the Coalition.
3. SPECIFIC COMMENTS
ON THE
DRAFT CHARITIES
BILL
Part 1—Meaning of "charity" and
"charitable purpose"
3.1. WCVA adopts and endorses the position
taken by the Charity Law Association on the meaning of "charity"
as expressed in chapter 1, section 2 of its response to PAPB.
The jurisdiction of the CC is currently dependant on a charity
holding assets on charitable trusts. This is now an outmoded basis
for jurisdiction and the effective adoption by the Bill in Cl.1(b)
of the meaning of "charity", as currently set out in
S96(1) of the Charities Act 1993, is unhelpful. The removal of
Cl.1(b), namely the reference to High Court jurisdiction, will
cure this and place the meaning of "charity" squarely
on the requirement to have exclusively charitable purposes.
3.2 WCVA welcomes the extended list of charitable
purposes in Cl2(2), particularly the inclusion of "science"
in subsection (f) and the "advancement of animal welfare"
in subsection (k), as requested in WCVA's original response to
PAPB. It is noted however that the "provision of social housing"
has not been included despite the Government's stated intention
in this respect (in para 3.14 of its response to PAPB). It is
unclear whether the clarification of Cl.2(2)(j) in subsection
3(d) will, in practice, encompass this—we urge that it be
so clarified.
3.3 Despite WCVA's request, Cl2(2)(i) has
not been similarly extended to include "sustainable development",
nor has subsection 2 clarified it in this way. The Government
of Wales Act 1998 (GWA 1998), S121 requires sustainable development
to be considered and implemented as one of the three cross cutting
themes for all Assembly policy in Wales. Sustainable development,
in our opinion, clearly falls within subsection (i) and should
be so stated.
3.4 Cl.2(4) seeks to allow for the recognition
of new charitable purposes by analogy, the process presently employed
by the CC and the courts. However, it would appear that the statutory
regime may be self-limiting in that the analogy is not to the
spirit of the Statute of Charitable Uses 1601 but to the finite
list of purposes expressed in the Bill and all those existing
analogous purposes developed to date. The development of charity
law has, in effect, always been by analogy to a limited group
of core purposes as originally set out in the Preamble to the
1601 Act and later codified by Lord MacNaghten.[32]
This has successfully accommodated changing societal needs over
time and generated a large number of new charitable purposes.
The extended list in subsection 2 and those purposes already developed
in charity law should provide sufficient scope for future development,
but this is not a certainty. It is unfortunate that the Bill has
chosen to deviate from the proposals in para 4.13 of PAPB and
the Government's stated intention in para 3.15 of its Response,
namely a catchall head: "other purposes beneficial to the
community"—this should be reconsidered. WCVA cautioned
against drawing this catchall head too narrowly in para 15 of
our response to PAPB. We understand what is attempted in the Bill,
namely a system that statutorily expresses the principles expounded
by Lord Wilberforce,[33]
but this is problematic for the reasons stated. If the PAPB wording
is reinstated the ensuing issue will then be whether it is still
necessary to express in statute the process to be used by the
courts in developing new purposes under this head. We would submit
this is not necessary as the courts will continue to use their
interpretive powers in this respect which have always found a
way to encompass that which they believe to be newly charitable
at any given point in time. Another alternative may be to adapt
the approach employed in Barbados legislation: "any purpose
within the spirit of the foregoing and this Act."[34]
3.5 WCVA welcomes the removal of the presumption
of public benefit as set out in Cl.3(2) and the maintenance of
existing case law as the basis for the test. It is important however,
that future application by the Commission adheres closely to this
and is not enlarged to include an activities test and present
controversial "Gateway" approach (ie consideration by
the CC of a prospective charity's long term viability in addition
to the strict charitable interpretation of its purposes).
3.6 "Public benefit" in itself
is not susceptible to easy codification, which has in many ways
been its strength, as it allows a degree of development and interpretation
to reflect societal need at any given point in time. Cl.5, S.1B(2)
point 2 of the Bill establishes a "social and economic impact"
objective for the Commission which, in strict terms, would be
appropriate if purely confined to the strategic impact of it's
regulatory function on the charity sector and public. However,
subsection (3) point 3 clearly expresses this objective as ".
. . to enable and encourage charities to maximise their social
and economic impact." One can only interpret this as an expression
of the key public good a charity can achieve and to this end will
inevitably underpin the way the Commission, in practice, assesses
public benefit in the future—indeed the Commission would
be remiss not to as it is a statutory regulatory obligation as
per Cl5, S1B(2) point 2. WCVA is aware that a number of charity
lawyers hold similar concerns as do our colleagues in England,
NCVO. As the existing law and interpretation of public benefit
is to be preserved as per Cl3 there is no further need to express
additional defining characteristics. If it is felt necessary to
set out an objective in this respect it should be confined to
a revised statement in-keeping with the public benefit regime
established in Cl2 and 3, namely: ". . . to enable and encourage
charities to maximise their public benefit."
Part 2—Regulation of charities
Chapter 1—The Charity Commission
3.7 WCVA welcomes the statutory recognition
of a Welsh title for the Commission in Cl4.
3.8 We also welcome the fact that the Bill
includes the provision in Schedule 1 to increase the number of
members of the Commission from five to nine, including the Chairman.
WCVA is, however, concerned that Cl.1(3)(b), states: "so
far as reasonably practicable, at least one member has knowledge
of the interests of persons in Wales and has been appointed following
consultation with the National Assembly for Wales." We believe
this appointment to be crucial to the credibility of the Commission
in Wales and, therefore that the wording "so far as reasonably
practicable" should be removed.
3.9 We support the principle of the involvement
of the National Assembly for Wales as described above.
3.10 If the controversial "social and
economic" impact objective in Cl5, S1B(2) is to remain—and
in our view it should not— it will require the provision
of support in addition to regulation by the Commission to be effective—a
point made in the Deakin Report.[35]
It should be borne in mind that the repercussions of this objective
on smaller charities will be considerable as their economic impact
will be incidental to the very great social impact they achieve—they
cannot direct their scarce resources at the former to the expense
of achieving their general charitable objects.
3.11 WCVA welcomes, in principal, the Commission's
general function to encourage and facilitate the better administration
of charities in Cl5, S1C(2). However, this must be achieved within
a clearly understood framework that ensures the Commission unequivocally
understands the boundaries to its regulatory advice and support
role, and resists straying in to the arena of non-regulatory (but
prescriptive) "advice" on the management of individual
charities (save that which is properly warranted it the context
of a review visit or investigation). The provision of advice and
support, beyond regulatory matters, is by local and national voluntary
sector networks and umbrella bodies in Wales and this type of
advice should remain independent of the Commission. The Bill's
failure to implement the recommendations of PAPB to clearly identify
and separate the Commission's regulatory and support functions
is exacerbated by the lack of any clear indication as to how it's
Cl5 objectives, general functions and duties will be applied in
practice. WCVA would venture that it has enjoyed an excellent
working relationship with the CC's Welsh Unit and very much looks
forward to continuing this with the new office in Wales.
3.12 Further, the general duties in S.1D afford
the Commission an unfettered discretion and fail to require it
to act in accordance with principals of procedural and substantive
fairness—this should be formally expressed in the Bill.
Chapter 2—The Charity Appeal Tribunal
3.13 WCVA strongly welcomes the introduction
the Charity Appeal Tribunal. Appeal will lie from formal decisions
of the Commission but its jurisdiction may be too narrowly drawn,
failing to allow for the review of decisions that do, in practice,
impact in charities—eg failure/refusal of the Commission
to make a decision. This could be addressed by an internal appeals
procedure for actions and decisions outside those specified in
the Bill, although in practice a two-tier appeals system is undesirable.
On balance, we would favour the enlargement of the Tribunal's
jurisdiction.
3.14 Every effort should be made by the
Commission to ensure the cost of accessing the new appeals procedure
is reasonable, and further guidance is required in this respect.
Chapter 3—Registration of charities
3.15 WCVA welcomes the removal of the land
and permanent endowment registration criteria, and the lowering
of the originally postulated £10,000 threshold to £5,000
(Cl7, S.3A(2)(d)), in line with WCVA's original PAPB representations.
3.16 Equally WCVA welcomes the introduction
of regulation for currently unregulated Exempt charities, and
increased regulation of those presently subject to another regulator.
We also welcome the removal of the Excepted charity classification
with some reservations, primarily relating to the £100,000
registration threshold and the impact it will have on churches.
This figure is alterable by the Secretary of State and we understand
it is likely to be reduced over time to coincide with the standard
registration threshold. This will particularly affect parishes
and local churches from the many denominations represented in
Wales. Whilst representative church bodies will no doubt be making
their own submissions (on this and the public benefit issue),
in summary there is a real danger that this development will discourage
already scarce volunteers (particularly Treasurers) and will not
necessarily provide any significant public benefit through increased
public confidence. At the stated level, the majority of parishes
and local churches will not be captured, however a lowering of
the threshold is likely to affect them in the way described.
Chapter 4—Application of property cy-pre"s
3.17 WCVA broadly welcomes the widening
of the Commission's cy-pre"s powers in Cls12-15, particularly
the facility for donor declarations. The new obligation to consider
the `social and economic circumstances' surrounding a gift may
be problematic, both in terms of the interpretation of those factors
prevailing at the time of the gift and how they may be reinterpreted
for the cy-pre"s allocation. They must not be used
to further the Commission's social and economic objectives in
preference to the original spirit of the gift.
Chapter 5—Assistance and supervision of charities
by Court and Commission
3.18 WCVA welcomes the broadening of the
Commission's regulatory powers relating to the protection of charities
and application of property. The statutory requirement to so act
in the best interests of the charity is particularly welcome,
as is the extension the Commission's written advice and guidance
powers beyond charity trustees to all those who have effective
responsibility for the charity.
3.19 WCVA also welcomes the safeguards built
into the Commission's power to enter premises under Cl21, but
would caution as to the use of this power save in the most extreme
of circumstances. We assume that the Commission will draw up comprehensive,
and publicly available, operational guidance on the appropriate
use of these powers.
Chapter 6—Audit or examination of accounts
3.20 WCVA strongly welcomes the rationalisation
of the regime governing the auditing and examination of charity
accounts, establishing a more pragmatic regime to alleviate smaller
charities of the financial burdens attached to full audit—an
appropriate compromise relative to the possible risk factors.
3.21 The extension of the statutory duty,
and creation of a discretionary power, to report matters of concern
to the Commission in Cl23—and the concomitant protection
from liability for breach of confidence or defamation—is
welcome, both as a means of ensuring higher standards in the financial
management of charities and to encourage public confidence.
Chapter 7—Charitable companies
3.22 The codification of the CC's present
practice concerning permissible changes to a charitable company's
memorandum and articles of association—the "regulated
alterations"—will provide welcome clarity for Trustees.
Chapter 8—Charitable Incorporated Organisations
3.23 WCVA wholeheartedly welcomes the introduction
of the new CIO and believes it will enhance the effectiveness
of the charity sector by providing the legal protection and organisational
flexibility essential to modern charity activity. The clear statement
of Trustee and Member duties and powers, and utilisation of a
straightforward constitution rather than conventional company
documentation, will further ensure that it is easily accessible
to those seeking to establish a corporate charity. The conversion
and amalgamation provisions further enhance its "user friendliness",
doing away with the existing costly necessity to transfer all
assets, contracts etc to the new company.
3.24 The Welsh title and language provisions
of the CIO are welcome but we refer to our general point in para
2.4 above—will the original Welsh language version be the
"master document" on issues of legal interpretation?
3.25 WCVA is interested to consider the
comment of relevant legal experts, particularly the Charity Law
Association, on the detailed provisions of the CIO and may seek
to endorse them or make further representations to the Joint Committee
once they have been published.
3.26 The CIO should not be considered the
only appropriate constitutional form for corporate charities and
the Commission must not restrict the diversity and entrepreneurial
energy of the charity sector by insinuating this requirement over
time.
3.27 In keeping with its present practice,
the Commission should publish an approved model CIO constitution,
preferably incorporating a number of alternative clauses to cater
for the typical constitutional variations required by charities
(eg membership).
Chapter 9—Charity trustees etc
3.28 The power to remunerate Trustee services
in Cl.27 is cautiously welcomed subject to strict enforcement
of the conditions expressed therein and the general duty of care
as set out in S1(1) of the Trustee Act 2000. WCVA's position is
that trusteeship should remain largely unpaid, as this is a defining
characteristic and strength of the charity sector, both in practical
terms and that of public perception.
3.29 WCVA strongly welcomes the new Commission
powers in Cl29 to relieve trustees, auditors and independent examiners
of liability subject to certain criteria. This is a very significant
reform doing away with costly recourse to the High Court and thus
going some way to alleviate the prevailing concerns that are deterring
those considering trusteeship.
Chapter 10—Powers of unincorporated charities
3.30 The streamlining and extension of the
regime for unincorporated small charities in relation to the transfer
of property and replacement of purposes, and for all unincorporated
charities to amend their powers or procedures is welcomed. These
measures reflect a more pragmatic approach to the every day needs
of such charities and will alleviate the administrative burdens
faced by them and the Commission.
Chapter 11—Powers to spend capital and mergers
3.31 Whilst the power to spend capital in
Cl33 will be of benefit to charities we echo the concerns of NCVO
surrounding the "all or nothing" nature of the provisions
and concur that the proposals should be revisited by the Joint
Committee in relation to the limitation of this power for larger
charities. WCVA accepts that the Bill has imposed extensive procedural
safeguards but it is important to remember that donors may seek
some reassurance that their capital donation is capable of being
administered according to their long-term wishes.
3.32 The new system for facilitating mergers
in Cl34 will be beneficial to the charity sector if it is administered
correctly. WCVA expressed reservations (in paras 43-45 of our
response to PAPB) about the appropriateness and skill of the Commission
to advise on such mergers and we reiterate here that the use of
this power should not conceal a wider policy agenda to reduce
the number of small charities. This is a particular issue in Wales
where pressure is likely to arise from funders. Charity independence
is paramount and the Commission can facilitate appropriate mergers
through sound regulatory advice and use of the streamlined powers
under the Bill, but the ultimate decision to pursue such a course
remains with the charity Trustees. Comprehensive operational guidance
should be published by the Commission specifically detailing the
extent of its support, and criteria under which assistance is
to be provided.
Part 3—Funding for charitable, benevolent
and philanthropic institutions
3.33 The present regime surrounding professional
fundraisers and commercial participators is inadequate and has
resulted in a diminution of public confidence surrounding these
activities. This has not been helped by the superficial statement
regime that currently pertains. Accordingly, WCVA strongly welcomes
the increased regulation and safeguards set out in Cl35.
3.34 The reserve powers of the Secretary
of State to regulate fundraising in Cl36 are cautiously welcomed.
The diversity and creativity of the charity sector in raising
funds is a recognised strength and should not be subject to the
control of government other than where exceptional circumstances
demand otherwise. Accordingly, the criteria for such intervention
must be formally set out and only invoked pursuant to full consultation
with the charity sector and relevant umbrella bodies.
3.35 The new regime for public charitable
collections set out in Cls37-43 is welcomed in principal but with
practical reservations. There is no question that a unified regime
will provide much needed uniformity, particularly for national
charities, but the practical administrative consequences for local
authorities, primarily in larger cities such as Cardiff, should
not be underestimated. Assessment on the basis of capacity has
long been called for in the charity sector and it is essential
that full consultation is undertaken by Welsh local authorities
in this respect. This can be best facilitated via the well-established
network of County Voluntary Councils and joint liaison committees
that have been so effective across Wales. Additionally, it is
incumbent on the certificating authorities to ensure a fair balance
between the needs of small indigenous charities and large national
charities when considering capacity issues.
3.36 Door-to-door collections will not require
a local authority permit and to that extent will be administratively
more convenient for charities. This is to be welcomed but careful
local capacity monitoring must be undertaken to ensure that fundraising
strategies are not disproportionately angled towards this type
of collection. An over emphasis on door-to-door fundraising will
re-ignite the "donor frustration" some of the new provisions
were designed to remedy.
3.37 Whilst it will no longer be necessary
to submit detailed accounts to the local authority, but merely
keep detailed records for inspection, WCVA is of the view that
inspections should be vigorously pursued where there is suspicion
that the Certificate of Fitness or individual permits are not
being adhered to.
3.38 Cl.44 of the Bill makes provision of
the Secretary of State to give financial assistance to charitable,
benevolent and philanthropic institutions in England only:
"(1) The secretary of State may give
financial assistance by way of grants or loans to any charitable,
benevolent and philanthropic institution whose operations are
carried on wholly or mainly in England."
WCVA understands this statutory power was introduced
to overcome the limitations of the annual Appropriation Act presently
relied upon by the Home Office to draw funds for its financial
support of the voluntary sector. Unfortunately, when drafting
the Bill, it appears that an incorrect assumption was made about
corresponding powers held by the National Assembly for Wales—namely
the adequacy of S85 of the GWA 1998:
"85.—(1) No expenditure shall
be incurred by the Assembly except—
(a) in, or in connection with, the exercise of any
of the functions of the Assembly, or
(b) for a purpose for which expenditure is authorised
or required to be incurred by the Assembly by any enactment.
(2) The ways in which the Assembly may incur
expenditure include, in particular, giving financial assistance
(whether by way of grant, loan or guarantee) to any person engaged
in any activity which the Assembly considers will secure, or help
to secure, the attainment of any objective which the Assembly
aims to attain in the exercise of any of its functions."
In fact, this is not the case. WCVA has been
in consultation with the Assembly's Voluntary Sector Unit who
advise us that the powers under S85 (and the Assembly's general
expenditure powers under S40) are not available to them for the
purposes of funding their statutory obligations under S114, GWA
1998:
"114.—(1) The Assembly shall make
a scheme setting out how it proposes, in the exercise of its functions,
to promote the interests of relevant voluntary organisations."
And S114(4)(a) states:
"(4) The scheme shall specify—
(a) how the Assembly proposes to provide
assistance to relevant voluntary organisations (whether by grants,
loans, guarantees or any other means),"
Whilst it is possible to see how this assumption
has been made, the National Assembly for Wales' extant legal advice
is that S85 and S40 were not intended to, nor can they in practice,
fund its obligations under S.114. WCVA has requested sight of
the internal advice and wishes to reserve the right to make further
representations to the Joint Committee should this be forthcoming.
The statutory powers currently used in this context are derived
from those transferred powers under S.126 of the Housing Grant,
Construction and Regeneration Act 1996—this is at best an
unsatisfactory compromise:
"126.—(1) The Secretary of State
may, with the consent of the Treasury, give financial assistance
to any person in respect of expenditure incurred in connection
with activities which contribute to the regeneration or development
of an area."
It would appear that the problem Cl44 was designed
to remedy in England is directly analogous to the situation in
Wales—namely the creation of a direct and appropriate statutory
power to fund the charity and wider voluntary sector. It is both
sensible and desirable to make similar provision for Wales and
WCVA strongly urges the Joint Committee to carry forward these
revisions to the Bill in consultation with the National Assembly
for Wales. As evidenced by the intention behind Cl44, the Charities
Act 2005 is a wholly appropriate vehicle to achieve this critical
reform for Wales.
June 2004
32 Income Tax Special Purposes Commissioners v
Pemsel (1891) AC 531 Back
33
Scottish Burial Reform and Crematorium Society v Glasgow
Corporation (1968) A.C. 138, 154 Back
34
The Laws of Barbados, Vol VIII, Title XVIII, Chapter 243, Charities. Back
35
Meeting the challenge of change: Voluntary action into the 21st
century, Prof N Deakin, July 1996. Back
| 
