Examination of Witnesses (Questions 880
- 890)
WEDNESDAY 14 JULY 2004
MR KEVIN
CURLEY, MR
JONATHAN MOORE,
MR MARK
LATTIMER, MS
ILA CHANDAVARKAR
AND MR
PETER FINNEY
Q880 Mr Mitchell: Charitable incorporated
organisations are introduced by this Bill and Kevin earlier said
he thought that would help smaller charities. Incidentally, there
is also the CIC[2]
being introduced in the Companies Bill which has just finished
last week in the House of Lords. Confusing? Is there going to
be a lot of take-up? Is it really necessary? Short answers from
all of you, starting with Peter.
Mr Finney: As I mentioned at the
beginning, in principle the CIO is of interest to us because we
are already incorporated as a company limited by guarantee and
the ability to exchange two regulators for one would be very useful
in terms of regulatory burden and reporting and so on. However,
I had recourse to talk to the company secretary and the lawyers
about this and the general feeling is that at the moment the provisions
in the Bill do not give us enough information about how the CIO
will operate. For example, it does not say much about will we
get the same limited liability protection as we do as a limited
company? How will the accounting provisions be done? Will the
same threshold for audits still apply as to an unincorporated
charity? All these things. Essentially in the long-term this is
going to be of great benefit to charities but I suspect the take-up
initially is going to be pretty slow.
Q881 Chairman: Potentially helpful
but slow take-up at the outset?
Mr Curley: I think the CIO will
be very helpful for small charities moving from being volunteer
and trustee-led to employing staff for the first time because
most CVSs at that point would say to a small charity, "We
think you should incorporate and become a company limited by guarantee
to protect the trustees."
Q882 Mr Mitchell: Have you got a
feeling for take-up amongst your members?
Mr Curley: In a typical CVS you
might be helping two or three groups a year to move from that
status to the new status. If you multiply that by 300 you could
be looking at 400 or 500 new registrations in a year, so very
useful.
Mr Lattimer: It is most obviously
useful to new charities or those which are growing rather than
existing ones. I suspect the take-up among existing ones would
be very slow at least for a few years.
Mr Moore: I think it will become
the norm for a charity to set this way. It will take time to embed
and be understood and the CVS themselves have to understand it
first before they could offer it as a model. It is a long-term
gain here but it would be welcome in terms of setting up business-like
new charities, particularly if there is a growth of public services
because where you get new charities formed they need to start
day one in a very business-like way, so I think this would be
very helpful.
Ms Chandavarkar: I agree with
Peter that until there is clearer definition around things like
liabilities I am not sure exactly how useful it would be, whilst
I welcome the idea of having one set of regulations.
Q883 Lord Campbell-Savours: Can I
ask Jonathan have you any views on the public benefit tests?
Mr Moore: In looking through this
I think that the distinguishing of the 12 areas is a good thing.
I think it makes it clearer for people and I think that clarity
is useful. The feedback I had from one group was that they would
have liked culture left in as one of the purposes definitions
which I think—
Q884 Chairman: —That is a slightly
different issue. Lord Campbell-Savours is asking about the public
benefit test as distinct from the new heads of charity.
Mr Moore: I think the two relate
into the purposes. I think the one concern that certainly has
come back to me is how much of the previous precedents will be
feeding into the new law, how much case law will pass over into
that? I think that was the one concern. In relation to the specific
instance of schools, I think one of the most telling comments
that somebody made to me was: "Fee paying schools are subsidising
state schools. Imagine the cost to the state sector if these schools
closed down, thousands more pulling down on the already stretched
budgets?" I think this goes to the point—and I think
it was you who made it—that perhaps that is an argument
for creating a different tax category but I do not think locally
there is any kind of call for the cutting of independent schools
out of the charity equation because I think they are seen in a
much broader community role than perhaps has been coming through
in other evidence.
Q885 Lord Campbell-Savours: What
about you, Mark?
Mr Lattimer: I do not think that
that argument would apply to the charitable hospitals which I
think are a separate category. Jonathan's comment about not being
sure about to what extent existing case law would be applicable
after the passing of this legislation is a very pertinent one
because in the construction of the meeting of public benefit but
also in terms of the heads of charity it is very unclear to what
extent this legislation will actually change anything. Certainly
the Commission has been admirable in stating quite clearly that
they see this change in regard to the presumption of public benefit
in relation to three heads but in relation to other issues there
is essentially no change and they will go back to existing case
law. Similarly they have made it clear in another field in which
I am concerned—the advancement of human rights—that
despite the passage of this legislation there will be many areas
of the advancement of human rights that they will still not regard
as being charitable even though they concern very, very grave
mass violations of rights.
Q886 Lord Campbell-Savours: Are you
unhappy with that?
Mr Lattimer: Yes, I think it would
be advisable in both those two areas (if no changes were made
on the face of Bill) if the Minister could at least make a statement
in the House making quite clear firstly that the advancement of
human rights, including all the rights in the universal declaration,
would include any work by the charity on trying to end the infringement
of any of those rights in the universal declaration and, secondly,
that the public benefit test would be applied in a rather more
rigorous manner than has previously been applied by the Charity
Commission in respect of those institutions whose services are
in practice only used by a very, very small section of the community.
In the case of charitable hospitals I think that is people who
are extremely well off.
Q887 Bob Russell: Very briefly to
Mr Moore on the Suffolk response. In question seven you say that
the licensing of collections is a good idea. Then you go on to
say: "There is much criticism locally of chuggers from national
charities mopping up funding for local groups, without offering
local benefits and services." Is your criticism there of
the chuggers or of the national charities collecting locally?
Mr Moore: I think it is a combination
of both because I think any national charity that actually utilises
this method must know the methods being used by the people there.
Certainly if you go to the centre of (I guess in your case) Colchester,
the money that is being extracted from people is not for local
benefit, it is all being siphoned into national charities. Certainly
among local small groups that is some cause of resentment.
Q888 Bob Russell: I can understand
your criticism of the methods but I am surprised that you are
criticising national charities. By their very definition national
charities must recruit across the nation. As you mentioned my
town, to give an example: the Royal National Lifeboat Institution
(and we do not have a lifeboat because even with global warning
we are not yet on the sea!) holds one of the most successful flag
weeks in the Colchester area. That is a national charity. You
are not suggesting, are you surely, that national charities with
local branches should not be allowed to collect in local communities?
Mr Moore: What I am probably concentrating
more on is those chuggers who are about extracting direct debits
rather than the actual street collections, which is perhaps the
RNLI approach. I think it is more the methodology of those—stereotyping—young,
attractive people trying to extract direct debit forms from various
people.
Mr Finney: May I come in on that
one?
Chairman: We are slightly pressed for
time now. I have a question from Sally and one from Alan.
Q889 Ms Keeble: Mrs Chandavarkar,
under "charitable purposes" it has got "community
development and reconciliation" but do you think it would
be helpful to have something like "promoting racial equality"
or "combating disadvantage based on ethnicity/gender",
that type of a question, which dealt exactly with areas of equality?
Ms Chandavarkar: Yes, I think
that would be tremendously helpful because there is confusion
around that. We have seen ways in which community cohesion reports
have sometimes been misunderstood to the detriment of Black ethnic
minority communities, so I think I would agree with that.
Q890 Mr Campbell: I wanted to go
back to what Mark Lattimer said briefly. One of the recurrent
themes throughout our declarations has been either the fear or
perception that this Bill will not lead to any significant or
indeed any changes at all. If that becomes a reality do you think
that the wider community charities will see the Bill as a missed
opportunity?
Mr Lattimer: I have never come
across a Bill which has been spoken of like this Bill. If you
talk to charities they say things like, "The Bill will usefully
back up the Charity Commission guidance." There are endless
comments about the Bill being about tinkering. I think the Chief
Charity Commissioner Designate was quoted as saying that it is
about "fiddling at the edges" or something like that.
Everyone thinks this is the case. Notwithstanding the fact that
there are very important improvements in terms of some of the
regulatory thresholds and some of the more technical aspects of
the Bill, in terms of the key public question of confidence in
what is and what is not a charity this Bill is not going to do
anything. The essential problem—which is the sudden realisation
that comes across people when they realise Amnesty International
is not a charity and their local private hospital which they cannot
afford to send their children to is a charity—this Bill
is not going to do anything about that whatsoever unless some
changes are made, or in the passage of the Bill it is made very
clear that the public benefit test is going to be applied more
rigorously and the listed purposes are expressly widened to include
the advancement of human rights and the ending of violations of
human rights.
Chairman: Unfortunately we have run out
of time. I know that some of you have submitted written evidence
to us this morning which, frankly, we have not had an opportunity
to look at but specifically I think it would be helpful if all
of you felt able to submit succinctly a view about any deficiencies
across the wide range of issues that we have covered this morning.
Not just public benefit by the wider range of issues around regulation
and fundraising, the Royal Commission and CIO, et cetera.
If you felt able to suggest to us ways in which you think the
admirable qualities of the Bill could be strengthened or if you
think that there are specific amendments you would like this Committee
to consider perhaps you could make them in writing and I will
give you an assurance that we will look at them. We would find
those submissions very helpful indeed. In conclusion can I thank
you all. It has been very helpful to us. We are hearing from further
charitable organisations this afternoon but it is very, very helpful
for us to hear not from the great and good, so to speak, but from
the people who are doing the work out there day in and day out.
I want to thank you for that and I also want to thank you for
the evidence you have been able to give us.
2 CIC-Community Interest Company. Back
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