Examination of Witnesses (Questions 820
- 839)
WEDNESDAY 14 JULY 2004
MR KEVIN
CURLEY, MR
JONATHAN MOORE,
MR MARK
LATTIMER, MS
ILA CHANDAVARKAR
AND MR
PETER FINNEY
Q820 Ms Keeble: Ms Chandavarkar,
I just wondered how many organisations you have under your umbrella
and how many of them are actual charities?
Ms Chandavarkar: We have just
over 400 Black minority ethnic organisations as members and 41%
of them have no legal status.
Q821 Ms Keeble: So you do not know
then which are charities?
Ms Chandavarkar: I do not know
how many of them are charities and how many of them are companies.
Q822 Ms Keeble: I wondered, particularly
with Black minority ethnic community organisations, is there an
issue about access to information and being able to exercise the
choice of registering as a charity and are there any issues about
the provision of information or the role of the Commission which
might assist in that?
Ms Chandavarkar: Yes, I think
that is the biggest problem which we have picked up. It is not
so much the regulation, but the registration and the information
which we get through registration. We have had ambiguous advice
from the Charity Commission in the past about using the word "Black"
where some officers of the Commission have said that charities
cannot use that in their constitution because Black is not a race
and the Race Relations Act is specifically to prevent discrimination
against people because of their race. In our region, we have a
high proportion of travellers who also fall into the same category.
At other times there have been some who registered where using
the term "Black" has not been an issue. I know that
the Bill does not touch on this, but we would welcome guidance
which the Commission could put out in terms of how this legislation
links into other legislation on discrimination.
Q823 Ms Keeble: Can I just ask about
that because obviously if you can print on your letter heading
that you are a charity, it can make it easier to get money from
people.
Ms Chandavarkar: Absolutely.
Q824 Ms Keeble: Is there an issue
about Black minority ethnic community organisations just not being
able to get access to money or not because of the lack of being
able to get charitable status and not even wanting to get charitable
status if they could?
Ms Chandavarkar: I think it is
more important for Black minority ethnic organisations to have
a certain credibility which the charity status gives them. They
find it easier to fund-raise if they are charities.
Q825 Ms Keeble: Is there a sort of
concern in the community about this issue?
Ms Chandavarkar: Yes, I think
there is quite a concern about the issues of registration and
difficulties in getting advice. We had some evidence from Suffolk
that this was a longer process for BME community groups then it
is for other community groups.
Q826 Ms Keeble: Why?
Ms Chandavarkar: I think that
the Commission seem to have less understanding of the charitable
work of BME community groups and more, I am not quite sure how
to phrase this, but there is more concern to determine that this
is a group which is not acting in the self-interest of a couple
of members, two or three members, and that seemed to come up more
frequently for Black minority ethnic groups which were registering.
Q827 Chairman: Is that your view,
Mr Moore?
Mr Moore: It certainly is and
I do think that, if you like, the access to support in going through
the process of registration is that there are a lot more barriers
for BME groups getting hold of that advice and support where they
are disadvantaged within the group of voluntary organisations.
Certainly my experience locally and perhaps regionally is that
the local infrastructure groups are not able to establish as strong
relationships with BME groups as others, despite efforts on both
sides, so I think there are issues there. In relation to the broader
question, I think previously your Committee have heard the argument
for a lighter light touch of regulation. I would like a pyre of
light touch and I think it is very critical for small organisations
because certainly if you think in Suffolk they constitute 50%
of 2,000 or 3,000 groups, they really want a very, very light
touch of regulation.
Q828 Chairman: How would we make
that happen?
Mr Moore: Well, I think it is
actually being very clear with the Charity Commission about the
kind of expectations and the weight of request. I think most small
groups actually feel quite invisible to the Charity Commission
in that they try and get away with the returns they are making,
but I do know that a local group which had a review felt like
they were being visited by "dementors" in terms of the
kind of scrutiny of their particular work, which seemed totally
over the top for the kind of work which happens on a very local,
village basis where you have got very much a community focus in
relation to that. I also agree with Kevin, that it has an impact
on issues like trusteeship. Certainly our local understanding
is that trusteeship is increasingly seen as quite a heavy burden
for groups and, if you like, the regulatory framework is a key
part of that. There is a great fear of liabilities in that.
Chairman: I can understand the problem,
dementors or no dementors. For those of us who do not know what
a dementor is, it is from Harry Potter.
Mr Mitchell: A very good phrase!
Q829 Chairman: How would you solve
that problem in this legislation?
Mr Moore: I think it is why we
are actually welcoming this. I think that the clarity of this
is coming forward in a way which it was not before. I think that
the thresholds which have been talked about, again I would probably
see those as actually being pushed and particularly the lifting
of the threshold of the £5,000 is important. I think that
the new legal forms are an important way of doing it certainly
in giving advice to these groups. It gives you greater flexibility
to kind of meet the particular needs of the particular groups.
You were asking about whether we are grant-making or fund-raising,
but we are a whole mainstream mass which is quite complicated
and finding the right kind of legal form in advising groups is
very difficult.
Q830 Chairman: With respect, those
are all well and good, but what your fellow witnesses have talked
about is not so much the legal entity problem, but about the enforcement
problem because that is what people experience, and you yourself
said earlier that, by and large, for the smaller charitable organisations
the law passes them by, but what does not pass them by is the
Commission, so I suppose I am trying to get from you what is missing.
Mr Moore: I think the missing
thing is actually, I think it was referred to as, communication.
I personally welcomed Geraldine's appointment as the Chief Commissioner,
but she is an individual and I think that actually culturally
I would like to see a Commission which has much greater clarity,
greater communication and greater proportionality, so I think
that actually the devil is in the detail of the implementation
of the legislation perhaps rather than the actual legislation
itself. It means that having a very effective appeals tribunal
is a very important part of this.
Mr Curley: I just wanted to reiterate,
Chairman, that most registered charities in this country, will
receive three pieces of written correspondence each year from
the Charity Commission. Two of those are newsletters and one is
a short return, most of which is pre-printed for you and I just
do not see what the concern is about the level of regulation for
most small charities.
Baroness McIntosh of Hudnall: Can I follow
that up given that there is obviously some discrepancy of view
amongst you. In broad terms, will the Bill, firstly, make it easier
for people who wish to register to do so and, following from that,
is it your view that it is broadly beneficial to people engaged
in charitable work to be registered rather than not be registered,
so if the Bill makes it easier, that is in general terms a good
thing? Then, following from that, is the threshold the right threshold,
the threshold of £5,000, as it will be if the Bill goes forward
in its current form? Whatever the threshold is, below which it
is not obligatory for charities to register, is it, in your view,
the right threshold, but is it more generally in the interests
of most charities to be registered rather than not registered?
Mr Curley: I think it is. I think
a great many charities which, if this Bill becomes law, will not
need to register will carry on registering because they want the
status that a registered charity number brings with it and they
actually want the relationship with the Charity Commission because,
as our evidence stated based on our survey, most local charities
value their relationship with the Charity Commission, so I think
there is really no question about that from most organisations.
They will want that relationship.
Q831 Baroness McIntosh of Hudnall: Well,
I think, with respect, that there is some question about it and
we hear that there is some question about it around the table
this morning, that there are people or charitable organisations
for whom the Charity Commission represents, as Mr Moore has described
it, some kind of looming threat from which they cower, so it would
be interesting to hear what the issues are which make it possible
for two such very divergent views to be presented to us from a
broadly similar group of charities.
Mr Curley: Well, you did ask one
other question which I did not touch on and I think part of the
answer may rest here, that in terms of the registration process,
it is now very, very simple if a new charity follows one of the
model documents provided by the Commission. I helped a new overseas
development charity, a small organisation with a turnover of certainly
less than £20,000 in its first year, to register a few weeks
ago. We took a model document from the website, we adapted it
at one meeting in discussion, sent it in with an explanation of
our purpose and some evidence of our work and within four weeks
we had a registered charity number. It is extremely simple and
a much shorter timescale than I recall 20 or 30 years ago when
going through a similar process. Now, I think the problem could
lie in the fact that the list of charitable purposes in the draft
Bill is, at the moment, all encompassed by the community benefit
fourth head of charity, therefore, there is too much scope for
officers of the Commission to interpret that when they are dealing
with applications and I think that might be what has been happening
around the country in relation to some of the Black groups which
Ila talked about where she said that she had heard of a different
experience according to which officer or which Commission office
Black groups had been in touch with and that, therefore, this
clearer codifying of what a charitable purpose is will help because
it will reduce discretion.
Q832 Mr Mitchell: George and I wanted
just to probe you a bit further on the issues of the Commission
and, going back to what Baroness McIntosh said, you mentioned
that your organisation, I think it is your organisation, Kevin,
were pretty happy with the service which they got from the Charity
Commission, but if we draw down into the NACVS's evidence to us,
what it actually showed was that although 87% of the councils
for voluntary service value the Charity Commission's advisory
role, a proportion of those who thought that the Commission gave
consistently good-quality advice fell to 65%, and 35% , so that
is more than a third, considered the quality of advice to be either
variable or poor. Can you give us a feeling for why, in spite
of those figures, you think that the Commission's advice-giving
role has been extremely helpful.
Mr Curley: Well, when you consult
members and 65% put their hands up, that is a pretty clear majority
of the people saying that they value it and that is what we have
said, that 65% thought that the quality of the information was
consistently good and 35% felt that the quality was variable.
However, in their responses, and this is the body of responses
we have received (indicating), people say things like, "We
found the advice variable in quality", "It depends which
officer you talk to" and, "Some of the officers sound
very inexperienced and young". We are told that case officers
move on quickly and one of our organisations has been trying to
register for several months now and has had three different case
officers, so you get that sort of explanation which is something
that the organisation needs to address, but it is true of any
public authority you deal with so that I do not think it is remarkable.
It does not take away from the fact that when you then ask those
people, "So you think the quality of advice you have received
is variable, sometimes poor. Do you think that the Charity Commission,
therefore, should not be giving that advice and the advice should
be coming from other places?", "Oh no", most of
them say, "We would rather the Charity Commission addressed
the quality of its advice".
Q833 Mr Mitchell: I hope we are going
to get an answer to this question from Jonathan and from Mark
as well, but just before we leave you, I just wanted to ask whether
you thought that your members were at all concerned about the
difference between the Commission's advice-giving role and its
rulings?
Mr Curley: Yes, and specifically
some of the respondents say things like, "It is sometimes
unclear to us and the groups we are supporting whether we are
being given advice or an instruction". I almost feel that
if the Charity Commission are writing to you, they should have
two different colours of letterhead, one being advice and the
other being, "You must do this". In other situations
you get told, "These are instructions which you must comply
with and this is guidance on what you might choose to do",
and I am thinking of Ofsted inspections and the reports to school
governors, where they say, "You must do these things",
or, "We would suggest that you look at these areas in order
to improve your practice". There is some confusion there
and my members have given me examples of it.
Q834 Chairman: Is that your view,
Mark?
Mr Lattimer: Yes, I think that
is actually the central issue. I have to say that I think the
Charity Commission are caught in a slightly difficult situation
because a lot of small charities want to go to it for advice,
and we heard earlier this morning Ila Chandavarkar already say
that she would welcome more advice from the Charity Commission
on one particular issue. I think for the vast majority of small
charities with very small incomes who cannot afford legal advice,
when they receive advice from the regulator, they read it as a
proxy for the law. The failure to distinguish clearly between
what is an instruction or an authority on the current position
of charity law and what is simply advice is in some circumstances
very, very difficult for an individual charity.
Q835 Chairman: Is that fixable in
the way that, for example, Kevin has suggested or does it require
a more radical separation of roles?
Mr Lattimer: Well, in my experience,
it is particularly acute only in a small number of areas. I think
if we fix those areas, there would be less problem about the separation
of roles as a whole, but I think any clarity between the advice-giving
and the regulatory functions of the Charity Commission would clearly
be welcome.
Mr Finney: I would like to support
that. We have had experience in this area over the last few years,
and I will not go into the context, but, first of all, I would
support the previous statements that the advice can be very variable,
and the problems about case officers changing and getting conflicting
advice and so on are very appropriate to our experience as well.
I think of course that the issue of distinguishing advice and
regulation is more important the smaller the charity becomes and
the issue about being able to get legal advice is very important.
We are large enough to be able to have legal advice and we have
sometimes had recourse to that to explain to us what the consequences
would be of ignoring the advice of the Charity Commission, for
example, and that has been very helpful to us, but you need a
lawyer who is well versed in the caselaw of charity law to be
able to do that. This is a very difficult area and I do think
it would be very useful if the Charity Commission could make it
much more clear a distinction about what is in fact direction
and what is advice.
Chairman: Could I just take a quick straw
poll, and I hate to be David Dimbleby—
Mr Foulkes: One David Dimbleby is enough!
Q836 Chairman: You can use those
words, but I could not possibly comment, George! We have heard
from the NCVO, for example, arguing very powerfully to us that
given the problem, given the confusion that you have described,
the simplest way of solving it is to separate advice altogether
organisationally from regulation. Is that something which you
would support or is the alternative proposition the one which
you would favour, as Mr Curley was suggesting, which is to simply
get this sorted out inside the Commission? Would you support organisational
separation of advice and regulation?
Mr Finney: I would if I could
believe that it was going to be effective.
Q837 Chairman: So that is qualified.
Mr Finney: It is qualified support
for the organisation.
Mr Curley: No, there is a high
level of confidence in the Commission and we have got to get it
right, I think.
Q838 Chairman: Well, you have used
those words, but I cannot comment.
Mr Lattimer: I think one would
have to know the future Commission very well to be able to work
out whether it could be done internally and I am not sure any
of us knows that. I think the important thing for the Commission
is to get the regulatory function correct and not to exceed it.
If that requires advice to be farmed out of somewhere else, then
that should be done.
Mr Moore: I have to declare an
interest in that I am an NCVO trustee, but I do actually support
the line and actually it was fairly fully debated within the NCVO
trustees and it actually talks of cognisance of a wide range of
different groups, so I actually would like to see the separation.
Q839 Mr Mitchell: Institutional separation?
Mr Moore: Yes.
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