Examination of Witnesses (Questions 80
- 99)
WEDNESDAY 9 JUNE 2004
MR STUART
ETHERINGTON, MR
STEPHEN BUBB,
MS MARY
MARSH AND
DR JOHN
LOW
Q80 Earl of Caithness: We have touched
on the tribunal a couple of times, but judging from what you have
said earlier and now that we have got the list of 12 and the list
of four, what do you see the tribunal doing and how many cases
do you see going to the tribunal?
Mr Etherington: It is very difficult
to estimate. I think the fact that it is clearer in terms of the
number of charitable objectives now means it will probably be
less because in a sense people will know whether they fulfil those
objectives. I would have thought in terms of registration cases
it would be a relatively low number because the basis on which
you would register is clearer now. I am not as worried by the
cost of this arrangement. However, if one comes back to the point
we made earlier which was that the number of organisations that
felt that they had been told to do something when the Commission
had no power to do so may grow, I think it is a good thing because
it is a check on the regulator which I think is extraordinarily
helpful and without it I think it would be problematic. I do not
know how many cases because it depends how wide ranging the appeal
tribunal powers are. I suspect, as I say, given the sophistication
in the number of heads, that the question of whether or not someone
could achieve charitable status is likely to be lower because
it is clearer at the point of entry.
Q81 Earl of Caithness: If you have
a situation where something has gone to the tribunal and the tribunal
disagree with the Charity Commission on a point of law it can
be taken to a court, so again the charity will need to have deep
pockets. Are you saying that you do not want the tribunal, what
you want really want is an ombudsman to check on the Charity Commission,
which is an easier line for a charity to go to and has a much
broader spectrum than a charity that is affected by the advice
which, as Andrew said, is the big stick of the Charity Commission?
If a charity can go to an ombudsman cheaply and easily who is
then checking the regulator, is that what you really want?
Mr Etherington: I guess it would
depend on what the powers of any such ombudsman would be. In relation
to the advice and regulatory function and if it is possible for
me to be a charity, it would depend on whether an Ombudsman could
determine the matter independently of a Charity Commission and
if it was quick and easy I see no reason why not, but I think
the appeal tribunal is there because it will give a level of weight
to the decision or the checking of the Commission which would
not otherwise be there and that is why I think probably, on balance,
I would go for that form of mechanism.
Dr Low: I am concerned that the
appeals process is limited, it is not able to cover all of the
activities of the Commission, which I think is a weakness. The
modern trend of proliferation of ombudsmen and regulators is not
particularly helpful. It is better to have a strong commission
with an appeals mechanism that is robust and relatively low cost
in terms of its structures rather than to add extra bits from
a practitioner's point of view.
Chairman: Can we move on to the issue
of money. There are three issues I really want to cover under
this: the first is public collections, the second is the whole
business of fundraising and then, finally, this issue of whether
or not charities should be allowed more flexibility over their
trading endeavours. We will begin with the public collections
and if I can ask Lord Campbell-Savours to lead on this.
Q82 Lord Campbell-Savours: Mary,
can I ask you to start the response on this because you have got
people with collection tins all over Britain very much in the
front line. What is going wrong with the present arrangements?
Ms Marsh: In a number of cases
there is great inconsistency because local authorities interpret
them and they are free to choose the way in which they interpret
them, it is different in different areas. So it would be much
better to have a consistent framework that was there across all
local authorities. It also would be much better if all of this
approach was strongly supported by the self-regulation, which
we endorse very strongly, although my particular concern is that
that self-regulation is a responsibility of the sector and not
a responsibility of those who are just directly involved in fundraising
activity. That is something the trustees and I see us making an
important contribution to. The Buse Inquiry report is geared in
that way and we support all of that. So I think it is a fundamental
issue clearly in relation to aspects of public confidence and
it is also right that it is an area of activity that should be
properly regulated and that people involved in organising any
collections of this sort in public places should be subject to
some consistent framework for doing it.
Q83 Lord Campbell-Savours: When you
say inconsistent, what is it?
Ms Marsh: In some areas you can
get licences to do things and in other areas you cannot, which
is one of the reasons why you get an intensity of face-to-face
street collections in some areas, because that is where it is
allowed and in other places it is not allowed at all. I think
it would be very sensible to balance that and also to regulate
the way in which those licences are issued so that you do not
get a huge intensity of people in particular places, which is
one of the things that has added to some of the difficulties of
people's understanding of what is actually going on. I think one
of the other advantages of a transparent regulatory system is
that it will also help people to understand this whole idea of
being clear about the costs of fundraising. There is a great misunderstanding
at the moment that face-to-face fundraising is a highly expensive
way of doing it. It is one of the lowest cost ways of getting
a donor. You have to have people employed to supervise what volunteer
fundraisers do on your behalf because there are all sorts of regulations
around that. The actual cost of supporting other kinds of fundraising
streams can be far greater, but that is not the public understanding
at the moment. I think being explicit about all of that would
be very helpful.
Q84 Lord Campbell-Savours: Do your
people report in abuse in this area?
Ms Marsh: Yes, absolutely.
Q85 Lord Campbell-Savours: What sort
of abuse do you have referred to you?
Ms Marsh: Any concerns about things
not working correctly we are very concerned to monitor very tightly.
Q86 Lord Campbell-Savours: Do they
report in abuse by others collecting for other organisations?
Ms Marsh: If there are concerns
then sometimes we will hear about that. Our responsibility at
the moment is not other people.
Q87 Lord Campbell-Savours: I just
wondered whether people complain about the actions of others.
Ms Marsh: They do not complain
to us usually about what other people do.
Q88 Lord Campbell-Savours: Do they
go to the local authority?
Ms Marsh: I do not know that people
understand at the moment that it is the local authority they should
go to. My point is about the clarity and transparency about what
we are doing so that we can be properly accountable because people
know who we are accountable to.
Q89 Lord Campbell-Savours: Are you
satisfied with the proposals that are being made?
Ms Marsh: Yes, I am. As long as
the Home Secretary has the power to intervene if self-regulation
does not work, obviously there needs to be a due and proper process
for that not to happen overnight, I think it is the correct approach
and it was strongly supported in the response to the consultation
on this matter, which is an area that had some of the most detailed
consultation and contribution. I think it is a pretty robust framework
that is underpinning this.
Q90 Lord Campbell-Savours: What about
the attempt to reform in 1992?
Ms Marsh: It clearly did not go
far enough because there are too many inconsistencies in what
is there and there is not co-ordinated self-regulation, it is
too informal.
Q91 Lord Campbell-Savours: Do you
agree with the term "procedural flaws made it unworkable"?
Ms Marsh: It has proved impossible
to make it work in any of the ways in which it is now recognised
that it should be done.
Q92 Lord Campbell-Savours: Do any
of your colleagues dissent from the views that you are expressing?
Dr Low: No.
Q93 Lord Campbell-Savours: You are
all united?
Dr Low: Yes.
Q94 Lord Campbell-Savours: Does anybody
have anything to add?
Dr Low: I have one concern about
the reserve powers to the Home Secretary. I am always concerned
when I see those almost without restraint. I think some framework
around which those reserve powers can be exercised should be added
to the Bill.
Q95 Chairman: You are looking for
criteria, are you?
Dr Low: Yes.
Ms Marsh: It should be proportionate
and reasonable and all those things.
Mr Etherington: We need to know
where the Home Secretary would determine that self-regulation
had not worked.
Q96 Bob Russell: Chairman, those
last two replies lead on quite nicely to the question I was going
to put. What is it exactly the charities are currently doing wrong
with fundraising that means there is even a need for there to
be self-regulation? Should self-regulation fail, the Home Secretary,
as you have indicated, would then have these powers that you do
not know about. What is it that is going wrong at the moment that
the concept of the Bill envisages is an area of concern already?
Ms Marsh: It is the issue of the
inconsistency over the way in which this kind of activity is undertaken
both in different parts of the country for one and by organisations
themselves. I think the sector has recognised that we have a collective
responsibility to build into the way in which we operate the kind
of standards that parts of the sector have already been working
on informally and through the Institute of Fundraising guidance
on these matters, but that has not been taken up or understood
right across the sector. I think it is fundamentally important
that we get this right.
Q97 Bob Russell: Has there been a
suggestion that some of the fundraising may be unacceptable? I
am thinking about the bibbed street "muggers" who try
and sign you up. Is that an area that has prompted this self-regulation
proposal?
Mr Etherington: I do not think
there is a particular fundraising technique that has caused this
issue to arise despite some public statements around that. I think
it is more that in many areas of life there is consumer redress.
If people are concerned about a particular technique that is being
applied or a particular product that is being sold then they should
have some redress mechanism. Some of that is regulated, indeed
much of it is self-regulated, for example the Advertising Standards
Authority in relation to people's defence.
Q98 Bob Russell: So you think the
Advertising Standards Agency is a self-regulatory body, do you?
Mr Etherington: Broadly, yes.
Q99 Bob Russell: There are those
who feel it is there to promote the dodgy adverts.
Mr Etherington: People have different
interpretations of the ASA. The point I am making in this field
is that there is not much in the way of consumer redress if you
are approached in a particular way or if you are not told what
proportion is going to the collector. There have been a couple
of very nasty cases in Scotland in terms of third party fundraising.
There is no mechanism at the moment, self-regulatory or otherwise,
by which some of those issues can be resolved other than through
appeals to criminal law as far as I can understand. There was
a big debate in the Strategy Unit report and the advisory group
as to whether it should be statutorily regulated or self-regulated.
I think the sector realised that it needed to get its act together
in relation to consumer redress in relation to fundraising techniques
and bad practice where it exists, some of the third party fundraising
activities, in order to maintain consumer confidence, but to encourage
reserve powers if that failed. We need to be clear about how we
know it would fail. I think it might be worth the Committee actually
taking evidence at some point, if they are not already intending
to do so, from a professional body of fundraisers to answer some
of these points.
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