Joint Committee on the Draft Charities Bill Minutes of Evidence


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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