Examination of Witnesses (Questions 660
- 679)
WEDNESDAY 7 JULY 2004
MS GERALDINE
PEACOCK, MS
ROSIE CHAPMAN
AND MR
KENNETH DIBBLE
Q660 Chairman: Go on, tell us about
the ha'p'orth of tar.
Ms Peacock: I do not think there
is a ha'p'orth of tar. I am perfectly happy with the Bill as drafted
because I think what is important is that there is a Bill. I think
a lot of the things that there are concerns, queries, different
interpretations about are more about good practice and what plays
out within that framework. I am perfectly happy that what is drafted
gives an adequate cornerstone of a legal framework within which
there is the freedom to play out these difficulties, differences,
whatever.
Chairman: We will come back to whether
or not you are entirely happy on the public benefit issues because
the very clear advice we have in writing from you is that you
are not entirely happy or at least you seem to disagree with the
Government about its interpretation of the public benefit test.
Let us come back to that in a moment.
Q661 Baroness McIntosh of Hudnall: Could
I also just say that I think some of these issues about advice
and regulation might come up later when it comes to the discussion
of the Tribunal because the extent to which the Charity Commission
can be called to account through that process for the way that
it implements its remit is clearly important. The question of
proportionality which Mr Dibble referred to is going to become
critical in people's ability to complain about how the Charity
Commission does its job and perhaps that can be explored later.
Ms Peacock: It is fine in the
balance. People always want to make people so oppositional. I
am a team player by nature. I know the world is not a great big
team, but I can do my best in the Commission to do that and I
jolly well shall. I think it is about how you do it. I think it
is much more about culture change and the way in which you work
within an adequate legal framework than it is about fiddling around
at the edges which sometimes leads you to big red herrings.
Q662 Ms Keeble: On the point about
consulting the sector and using that to shape some of your policy,
do you think that a requirement to consult should be on the face
of the Bill?
Ms Peacock: I would not be unhappy
to see it there at all. I intend to do it anyhow and if it brings
greater comfort for it to be on the face of the Bill then I am
quite happy to see it there. It is not just about consulting charities,
I think it is about consulting the public too.
Q663 Ms Keeble: I was going to ask
about that. The accountability to the public for what happens
to their donations, do you think there should be some obligation
for public consultation as well?
Ms Peacock: I feel the obligation
myself. We have already set in train processes to do that on a
regular basis.
Ms Chapman: The Cabinet Office
consultation and Compact Compliance is what we abide by at the
moment. If it was in a statute it would build on that.
Q664 Ms Keeble: It would provide
you with a framework. There is also the issue about the rolling
reviews. Do you think that those are one of the things that should
be on the face of the Bill as well?
Ms Peacock: We conduct rolling
reviews. We are going to continue to do that and we are going
to revise the way in which we do that depending on the feedback
we get from our public consultations. If it gives people greater
confidence, that is fine, too, but we will do it anyhow.
Q665 Ms Keeble: You mentioned that
there were some issues around best practice. Do you think that
some of those could be done through secondary legislation if there
was provision in the legislation for regulations to be brought
forward and that that might deal with some of your smaller best
practice issues?
Ms Peacock: It might well do that
as another way of addressing it. I suppose what I want—and
it may be wishing for the moon—is as flexible legislation
as possible because it has taken 400 years, apart from some minor
changes along the way, to get to this point in time and we do
not want to wait another 400 because the non-profit sector is
changing radically, it is not just charities. My comment about
the Charity Commission expanding its brief is that I think there
is a lot in common between mutuals, co-operatives and community
interests that is not just specific to charities and there should
be much more melding between those forms of activity.
Q666 Ms Keeble: If this legislation
has to last another 400 years then we will have to get it right
this time.
Ms Peacock: We will have to get
it right, but we do not want too much that is specific so that
we get tied in knots in dealing with a situation that is moving
faster than the legislation.
Q667 Lord Sainsbury of Preston Candover:
We have been concerned by the reports of advice being confused
with regulation. I thought I should quote to you a submission
we received from an organisation that is an umbrella body for
several thousand small charitable groups. They said, "Over-regulation
of the sector comes primarily from the Charity Commission rather
than from Parliament and providing effective statutory redress
against occasional over-zealous bullying and unforgiving behaviour
by the Regulator will be the most effective way Parliament can
avoid over-regulation. In the Charity Commission series of advisory
publications the Commission uses the word `must' with precision
to indicate what they require of charity trustees if they are
to avoid the wrath of the Regulator. They use that word `must'
600 times in their series of publications. It is hardly surprising,
therefore, that many people get confused between advice and regulation."
Are you surprised when these people say that they do not believe
that there is a small or large charity in the land which is always
in compliance with all these requirements or a single trustee
who knows them all? I think that is indicative of over-regulation.
Ms Peacock: Yes, I agree.
Q668 Lord Sainsbury of Preston Candover:
What would you do to avoid this very understandable confusion
over advice, "You must do this, you must do that"? How
can someone expect to understand when something is not a regulation,
it is advice? It is not advice if it is done in such an authoritarian
manner.
Ms Peacock: It may have been in
the past, I do not know because I have only been the Commissioner
for nine months and I am not yet even in the new job and I am
certainly not that kind of person. I think leadership and the
team we have now are not authoritarian bullies. That is a cultural
thing.
Q669 Chairman: Mr Dibble, you have
been there for some considerable time. Are you an authoritarian
bully?
Mr Dibble: Not that I might care
to admit.
Ms Peacock: He is one of the biggest
modernizers even though he has been there a long time.
Q670 Lord Sainsbury of Preston Candover:
The suggestion of separating in some way the service of advice
from the important role of the Regulator surely is important.
It has even been suggested to us that there should be a separate
organisation independent of Government and independent of the
Charity Commission to be advising and helping, leaving the role
of the Regulator much more focused and clear.
Mr Dibble: In the past the Commission
has been rather indiscriminate in terms of its publications between
specific legal requirements and matters which go towards carrying
out those requirements which might be called at one end best practice.
It is something which we will attend to in the future. It is not
only the publications of course, it is the way our Commission
staff nay approach their work. Clearly, for the Commission to
distinguish between those two areas is very important for a Regulator
and it is something which we can do better and I would agree.
I think to have this continuum within the Commission between advice
and guidance leading to compliance is positively helpful rather
than having them in two separate organisations, because they can
actually relate to or complement each other within the same organisation
and provide the best possible framework and assistance for trustees
when carrying out their duties.
Q671 Lord Sainsbury of Preston Candover:
Do you think the Tribunal should be able to rule on whether
the advice has got too specific and too like regulation? Do you
think there is a role for the Tribunal to be effective in complaints
that this advice is going too far in a regulatory manner?
Mr Dibble: The jurisdiction for
the Tribunal does not include such a provision at the moment.
Q672 Lord Sainsbury of Preston Candover:
Do you think it should?
Mr Dibble: I think that is more
a matter for complaints about the Commission, the way it undertakes
its service and that is a separate issue from the review of decisions.
We do have a full complaints service within the Commission ending
up with the Independent Complaints Reviewer who the Commission
works with to improve its service and if the Commission oversteps
the mark in terms of prescription, that is probably a matter for
complaint about the service the Commission is providing rather
than a review of the decision, which is rather a specific and
separate matter.
Q673 Lord Sainsbury of Preston Candover:
You do not think the thought that this could go to a Tribunal
would be a useful influence and inhibitor to those who want to
push the advice too far?
Mr Dibble: The Independent Complaints
Reviewer, Jodi Berg, is quite forthright in her criticism of the
Commission where she feels that justified and she plans an annual
report and the Commission invariably always follows her guidance
and decisions in particular cases. I think that is sufficient
authority to put the Commission back on track in a case where
it goes too far.
Ms Chapman: Firstly, we are only
giving advice in relation to our regulatory role, so it is not
that we are giving advice on health and safety, for example. Secondly,
the last PAC report spoke positively about the usefulness of our
advice role.
Ms Peacock: I think there are
practical things we could do in terms of the way we present our
advice indeed on our website and in our direct dealings with charities,
even things that sound perhaps a little frilly but would be useful,
for instance colour coding what is advice and what is mandatory.
We do not help people perhaps in our forms of communication as
much as we could do with that.
Q674 Lord Sainsbury of Preston Candover:
Could I ask if you are surprised by that statement that I
read out, that there is no small or large charity in the land
that is always in compliance with all these requirements or a
single trustee who knows them all? Do you believe that? Are you
surprised by that?
Ms Peacock: No.
Q675 Chairman: Do you believe that?
Ms Peacock: I believe that is
probably true. I am not surprised by that after having sat on
the other side of the fence.
Q676 Lord Sainsbury of Preston Candover:
Is that not a very serious matter?
Ms Peacock: It is a serious matter,
but it is something that at least is acknowledged and recognised.
It is a challenge. We have 188,000 registered charities and growing.
I think the root of that also goes to the question of the calibre
of trusteeship, too, and what the Bill does and does not help
us do about that.
Q677 Mr Mitchell: When my colleagues
have said, "Here is an example of a way in which the legal
powers of the Commission are set out in this draft Bill,"
your reaction to that on two occasions has been, "Well, I'm
not the sort of person who would allow powers to be exercised
in that way." As you have just said, the last piece of charitable
legislation has had to last us 400 years. We are not intending,
as a Parliament, to return to this matter in the early future.
The way in which you may exercise your powers is very reassuring,
but the people who have sent us submissions have not focused on
that. I do not think they will be satisfied by that. They want
to know that the wording in the Bill itself is fireproof to someone
who might not have your very well meaning and public spirited
attitudes.
Ms Peacock: Obviously I am not
trying to insinuate that that is the case. I think what you need
is flexible legislation. I know there is a very fine line between
what is secure enough and what is flexible enough and that is
a difficult task we are all trying to do. What I think the legislation
offers at the moment, regardless of who is the Chief Charity Commissioner
or who is in post at any particular time, is a framework within
which case law and practice can be challenged and only by having
the freedom to challenge existing procedures in a proper way—and
I think the Tribunal is a very welcome addition to that—are
you going to create new precedents, new case laws by which practice
can continually improve within the sector.
Q678 Chairman: Let me just try and
paraphrase what we have heard so far. Your case and answer to
Lord Sainsbury is one of mea culpa. The Charity Commission
has been guilty of over-zealous regulation and the advice that
you have issued to charities has been seen to be over-prescriptive,
but you recognise that that is a problem and you intend to change
that. Is that your position?
Ms Peacock: My position is not
that it is 100% over-zealous and over-prescriptive. Any organisation
can be called that at some point in its history. I would not say
that was our prime characteristic. We try to do the best we can
within the legal framework that we have got. We will not always
get it right. What we can do is learn from our mistakes.
Q679 Chairman: You answered Lord
Sainsbury by recognising that the problem that he acquainted you
with that we had heard in evidence was indeed a problem, is that
the case?
Ms Peacock: I think it is an issue.
I do not think it is an insurmountable problem.
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