Memorandum from the Association of Medical
Research Charities (DCH 230)
The Association of Medical Research Charities
(AMRC) welcomes this opportunity to contribute to the discussion
and debate on the Draft Charities Bill. Because of the remit of
AMRC the majority of our comments focus quite specifically on
issues of specific interest to medical research charities. However,
we have taken this opportunity to draw attention to this sector's
concerns about some of the generic aspects of the Bill.
There are over 100 charities within AMRC whose
combined contribution to UK medical and health research amounts
to over £660 million per annum. There is a wide range of
different types of organisations encompassed in our membership
which includes both fundraising and endowed organisations, large
and small. Many medical research charities also support a range
of other activities in addition to medical research and the total
charitable expenditure of AMRC members was £1 billion in
2003-04. A list of member charities is attached as an Appendix.
PART I
1. The meaning of charity and charitable purposes
(a) AMRC welcomes the inclusion of the advancement
of science as a specific charitable purpose.
(b) AMRC notes the inclusion of the advancement
of animal welfare as an additional charitable purpose. It is our
understanding that this charitable purpose would not include the
furthering of "animal rights" and that organisations
established with the primary object to end animal experiments
in medical research, would not be encompassed by this definition.
We seek reassurance on this point.
2. The public benefit test
(a) AMRC supports the proposal to remove the
presumption of public benefit in some areas and the fact that
in the future all charities will have to demonstrate a public
benefit. AMRC has strongly supported a test of public benefit
for medical research charities and supports this underlying principle.
(b) The furtherance of education will be one
of the charitable areas for which the assumption of public benefit
is removed. A majority of the present charities that fund medical
research do so in furtherance of an education objective and there
is usually an assumption that medical research in this context
is a process and is automatically for public benefit. This may
not always be the case and AMRC believes that other factors, such
as an emphasis on quality and dissemination, should be taken into
account.
(c) Some medical research and health related
charities currently aim to benefit very small populations of patients
suffering from rare conditions. We have been reassured by the
commission's statements that it is not intended that the numbers
of beneficiaries should be a key determinant of public benefit
and would emphasise the importance of this point.
(d) AMRC supported the proposal that the Charity
Commission would undertake reviews of the register to ensure that
charities continue to meet the public benefit test. We note that
this requirement is not explicit in the Draft Bill.
(e) However, it is important that any public
benefit test is applied in a transparent and appropriate way.
This will mean that if the Commission is to keep the register
under review it will need to develop an understanding of the activities
within each sub-area of charitable endeavour and to assess the
public character of organisations against good practice. For such
areas of work we believe that sub-sectoral umbrella organisations
could provide excellent partners.
(f) AMRC would be very concerned if the Charity
Commission were to place an over emphasis on short-term public
benefit and we believe this would have a very negative impact
on the sector. The outputs and impact of medical research can
often be very long term and may at first focus on the gathering
of knowledge and skills before there is an impact on human health.
AMRC therefore believes it is important that any public benefit
test is applied sensibly and not in a way that could inhibit the
breadth of charitable support for medical research.
(g) AMRC believes it would be wrong to seek
to define public benefit within the Bill or to be overly prescriptive
with regard to the way in which the Charity Commission will be
expected to apply the public benefit test. For 400 years England
and Wales have benefited from a special freedom for individuals
to establish organisations for public benefit that a free of interference
from the State. The definition of public benefit, and the range
of organisations included on the register, has evolved over time
through common law and, our members would say, largely reflecting
common sense. We believe this common law approach has served the
public well. AMRC would therefore be most strongly opposed to
the inclusion of definition of public benefit within the Bill.
We are aware that there are some within the sector that have supported
such a position, but this view is not shared by AMRC members.
(h) The medical research charity sector provides
a good example of the long term wider public good arising from
the contribution of organisations that are free and independent
from the State. The UK has a medical, health and biotechnology
research environment which is broadly based, vibrant and innovative,
producing high quality research supporting a strong pharmaceutical
and biotechnology commercial sector as well as contributing to
the training and development of the NHS. Many studies show that
the UK punches way above its weight in this area. This is at least
partly due to the plurality of funding sources in the UK for medical
and health research which has meant that almost all disease areas
are covered and that there is no single orthodoxy in funding priorities
or funding approaches. The Government cannot possibly fund all
the research that the public demands to be undertaken and in many
disease areas, it is charities and not the State, that is the
primary source of funds. Most other countries do not enjoy such
a vibrant voluntary sector in medical research and are envious
of the UK's position: they are keen to attract the funding to
their own universities with matched funding streams or similar.
The breadth of the charity sector in medical and health research
also enables almost all patients to have a voice with which to
influence research and policy.
3. The Charity Commission
AMRC has several concerns regarding the changes
to the role of the Charity Commission.
(a) Paragraphs 5 (2) and (3) refer to the Commission's
regulatory objectives and provide definition. AMRC considers the
first objective, to increase public trust and confidence in charities,
to be misplaced and it should be removed. Whether or not the Charity
Commission has achieved or maintained this objective will be very
difficult to assess, as there are so many different types of charitable
organisations working across a very broad range of activities.
One popular, but hardly reliable, methodology would be to conduct
opinion polls. Another would be for this to be assessed by Government.
This is likely to be equally unreliable as Government will have
a tendency to focus its assessment on the basis of the service
providing charities that it has a relationship with. Public attitudes
to different types of charity and different sub-sectors is likely
to vary: in our sector the key issues affecting public confidence
in the work of medical research charities focuses rather more
on how research is conducted and managed than on "fundraising
ratios" or other simplified assessments. It would, in theory,
be possible for the public to trust and have confidence in independent
charities but not to trust or have confidence in public sector
charities. There is therefore the danger that the Commission's
priority will be public confidence in those charities of interest
to Government.
(b) Some AMRC members have pointed out that while
the review process has had a focus on public trust and confidence
in charities, there is, in fact, little evidence that there has
been a significant change in public confidence in, and support
for, charities. There is a concern that such an objective will
lead to the Charity Commission being preoccupied with perceptions
and spin rather than its effectiveness.
(c) AMRC would like to see the social and economic
impact objective struck out of the Bill. To include it implies
that to maximise social and economic impact is an object of charities,
which it is not. There is also a concern that such an objective
will lead to political and governmental interference in the objects
of charities.
(d) AMRC suggests that the Commission should
be held to account as a regulator and that this should not only
be about compliance and accountability but should consider whether
the Commission has served to develop and strengthen the sector.
The Charity Commission should therefore have as an objective the
requirement to follow the Cabinet Office Principles of Good Regulation.
(e) AMRC asks the Committee to replace the public
confidence and social and economic impact objectives with an overall
objective to further philanthropy. This would seem to be a common
sense test of the Commission's effectiveness. If the Commission
acts in a way that reduces or inhibits philanthropy then it should
be held to account.
4. The Charity Commission's general functions
(a) Many AMRC member charities have voiced concerns
during our consultations about the combining of regulatory and
advisory functions within the Commission.
(b) There is a measure of support for the Commission
to have an advisory role with regard to the registration of charities,
regulatory requirements, governance and the role of trustees,
on charity law and on the legal issues affecting charities. For
those charities that support this position it was stressed that
the Commission must work harder to ensure that the advice is reliable
and distinguishes between regulatory requirements, good practice,
and where this has been developed, best practice. Commission documents
and speakers use terms such as "must" and "should",
regulatory requirement, good practice and best practice—interchangeably.
They appear not to recognise the considerable difference between
regulatory minimum requirements, good practice and best practice
or between "must" and "should".
(c) AMRC does not consider it appropriate for
the Commission to give advice to charities beyond these areas
and we therefore believe that paragraph 1C(2)2 is far too loosely
drafted (Encouraging and facilitating the better administration
of charities). The Commission has often strayed into giving advice
to charities relating to the detail of operational matters on
which the Commission has no expertise.
(d) A key role of sub-sectoral umbrella organisations
like AMRC, is to identify good practice and to work with the sector
to develop best practice. The Commission has never sought advice
from AMRC on issues relating to medical research grant giving
and has tended towards the issuing of guidance without consultation
with the sector. At AMRC we have a number of examples where the
Commission has given advice to members and non-member charities
that has been inconsistent or completely out of step with sector
good practice: there are no examples at all in our field of the
Commission having identified best practice and AMRC believes it
must be made clearer in the Bill that this is not the Commission's
role and not something it can reasonably be expected to achieve.
(e) It is important for public trust and confidence
in charities that the sector uses good practice and works continually
to develop better practice. The Commission may have a role in
fostering this development and AMRC believes a good way of taking
this forward would be to work with sub-sectoral umbrella groups.
In the past the Commission has held many workshops on this issue
and it is a great disappointment to AMRC that the Commission seems
to have ignored the outcomes of those meetings.
5. Registration and regulation of charities
(a) AMRC welcomes the reforms of the Charity
Commission included in the Draft Bill, especially the ability
to appeal and challenge Commission decisions. AMRC believes this
will be an important step towards building sector confidence in
the regulator.
(b) AMRC welcomes the reforms and focus of the
proposals with regard to the charity register. However, there
is a continuing concern amongst member charities that removal
of charities from the register and the proposed levels of de-regulation
will lead to the proliferation of unregulated short term local
organisations, something that is already a problem in the medical
research and health sectors.
6. Exempt charities
(a) AMRC believes that there should be only one
class of charity and that the Government should take this opportunity
to remove the classes of "exemption".
(b) AMRC does not support the thrust of the proposed
legislation which will leave the monitoring arrangements for exempt
charities adapted for use by their principal regulators. AMRC
does not believe such an approach is logical and considers it
could be confusing for the general public, particularly in the
case of exempt charities that fund raise. There will be a requirement
for secondary legislation to introduce these powers for principal
regulators which is likely to result in further delay and confusion.
(c) If there are to be a proliferation of principal
regulators, then it should be explicit in the legislation that
the Charity Commission will have an overarching role that will
maintain a consistency and a level playing field in the application
of charity law and regulation. Charities that are currently exempt
should be given an option to register should they wish.
(d) In the medical and health research sectors
our concern is primarily with the universities and university
connected charities. While AMRC is mindful of the university sector's
concern that they are already heavily regulated, there is no evidence
that they are currently regulated as charities and indeed some
universities and colleges appear to be unaware that they are in
fact governed by charity law. The principal area of potential
difficulty in the relationship between research funding charities
and universities is over the management and use of research outcomes
for public benefit. Indeed, the Charity Commission itself 10 years
ago began the process of clarifying charity law in this area but
has so far been unable to do this in a way that has been acceptable
to the university sector. There is no organisation in the higher
education field with a responsibility to do this and to hold universities
to account in this area. AMRC therefore welcomed the Government
statement to the House of Lords in February this year:
There are a number of charities
in England and Wales which do not come under the full regulatoryJurisdiction
of the Charity Commission. These are exempt charities, which include,
among others, most universities and national museums; excepted
charities, such as some of the Protestant churches; and those
with an income below £1,000 per annum (unless they have a
permanent endowment or the use or occupation of land) . . . None
of these organisations has to register with the Charity Commission,
nor submit an annual report or annual accounts. The Charity Commission
has differing powers to inquire of and investigate these charities,
but these are limited in nature, particularly in respect of exempt
charities.
The Government believe that this
situation is no longer justified and the Charities Bill currently
being drafted will bring greater regulatory oversight of these
organisations as charities.[1]
(e) AMRC does not believe the provisions in paragraph
9, 10 and 11 go far enough towards addressing the inequality of
regulation between registered and exempt charities and that neither
the NHS nor the Funding Councils are appropriate regulators in
this respect. NHS organisations and universities have several
monitoring and regulatory bodies to answer to for different aspects
of their work and there is no obvious single regulator that might
undertake such a task.
PART 2
7. Remuneration of trustees
(a) AMRC supports strongly the continued voluntary
(ie no pay for being a trustee) principle in general, but welcomes
the acknowledgement that there are times when this could be varied
and that it can also be appropriate to pay trustees for services.
(b) The sector will still need to be aware that
there are a myriad of potential conflicts of interest relating
to the appointment of trustees who are either directly or indirectly
beneficiaries of the charity's activities.
June 2004
AMRC REPRESENTING
THE CHARITY
SECTOR IN
MEDICAL AND
HEALTH RESEARCH
Action Cancer
Action Medical Research
Action on Addiction
Age Care—The Royal Surgical Aid Society
Alzheimer's Research Trust
Alzheimer's Society
Arthritis Research Campaign
Asthma UK
Association for International Cancer Research
Association for Spina Bifida & Hydrocephalus
Ataxia
Ataxia—Telangiectasia Society
BackCare
Bardhan Research & Education Trust of Rotherham Ltd
Barnwood House Trust
Beit Memorial Fellowships for Medical Research
Blackie Foundation Trust
Brain Research Trust
Breakthrough Breast Cancer
Breast Cancer Campaign
British Council for Prevention of Blindness
British Heart Foundation
British Homeopathic Association
British Liver Trust
British Lung Foundation
British Neurological Research Trust
British Retinitis Pigmentosa Society
British Sjogren's Syndrome Association
British Skin Foundation
British Vascular Foundation
BUPA Foundation
Cancer Research UK
CFS Research Foundation
Chest, Heart & Stroke Scotland
Children's Liver Disease Foundation
Chronic Disease Research Foundation
Chronic Granulomatous Disorder Research Trust
Cystic Fibrosis Trust
DEBRA
Defeating Deafness
Diabetes Research & Wellness Foundation
Diabetes UK
Digestive Disorders Foundation
East Grinstead Medical Research Trust
EMF Biological Research Trust
Epilepsy Research Foundation
Foundation for Liver Research
Foundation for the Study of Infant Deaths
Fund for Epilepsy
Guy's & St Thomas' Charitable Foundation
Healing Foundation
Health Foundation
Huntington's Disease Association
Hypertension Trust
Inspire Foundation
International Spinal Research Trust
Iris Fund for Prevention of Blindness
| | Juvenile Diabetes Research Foundation
Lister Institute of Preventive Medicine
Little Foundation
Ludwig Institute for Cancer Research
Marie Curie Research Institute
Mason Medical Research Foundation
Meningitis Research Foundation
Meningitis Trust
Migraine Trust
Motor Neurone Disease Association
Multiple Sclerosis Society of Great Britain & Northern Ireland
Muscular Dystrophy Campaign
Myasthenia Gravis Association
National Association for Colitis & Crohn's Disease
National Eczema Society
National Endometriosis Society
National Eye Research Centre
National Heart Research Fund
National Kidney Research Fund
National Osteoporosis Society
Neuro-Disability Research Trust
NI Chest, Heart & Stroke Association
North West Cancer Research Fund
Northern Ireland Leukaemia Research Fund
Novartis Foundation
Novo Nordisk UK Research Foundation
Nuffield Foundation
Parkinson's Disease Society of the UK
Primary Biliary Cirrhosis Foundation
Primary Immunodeficiency Association
Progressive Supranuclear Palsy Association
Psoriasis Association
Remedi
Research into Ageing
Restoration of Appearance & Function Trust
Royal College of Radiologists
Royal College of Surgeons of England
Scottish Hospital Endowments Research Trust
Sir Jules Thorn Charitable Trust
Society for Endocrinology
SPARKS (Sport Aiding Medical Research for Kids)
St Peter's Trust for Kidney, Bladder & Prostate Research
Stroke Association
Tenovus
Tommy's Campaign
Tuberous Sclerosis Association
Tyneside Leukaemia Research Association
Ulster Cancer Foundation
Wellbeing
WellChild (Registered as The WellChild Trust)
Wellcome Trust
Wessex Medical Trust
William Harvey Research Foundation
Yorkshire Cancer Research
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1
On 26 February, in Written Answers to a question from, Lord Oakeshott
of Seagrove Bay who asked Her Majesty's Government: Which organisations
are treated as charities for taxation purposes without coming
under the regulatory jurisdiction of the Charity Commission; and
why they are so treated. [HL1134] The Parliamentary Under-Secretary
of State, Department for Culture, Media and Sport (Lord McIntosh
of Haringey) replied. Back
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