DCH 4 National Society for the Prevention
of Cruelty to Children (NSPCC)
National Society for the
Prevention of Cruelty to Children (NSPCC)
Written evidence to the
Joint Committee on the Draft Charities Bill
Mary Marsh, Director
and Chief Executive, June 2004
Some information about NSPCC
The
NSPCC is the UK's leading charity specialising in child protection
and the prevention of cruelty to children.
The NSPCC's purpose is to end cruelty
to children. While recognising the need to provide vision and
leadership, the NSPCC cannot end cruelty to children on its own
and we seek to work in partnership with other agencies and individuals.
We seek to achieve cultural, social and political change - influencing
legislation, policy, practice, attitudes and behaviours for the
benefit of children and young people. This is achieved through
a combination of service provision, lobbying, campaigning and
public education. Our services form the cornerstone of this approach.
They are developed to be consistent with our cultural change programme
and to demonstrate what is needed by children and young people.
This in turn informs and illustrates our campaigning and public
education activity. Some of our services cover England, Wales,
Northern Ireland and the Channel Islands. The majority of our
services, however, are designed to demonstrate best practice and
where necessary, satisfy unmet needs in a local area. Our activity
is both supported and made possible by our fundraising programmes
and by the contributions of all our partners. Our annual turnover
is just over £100million with £80million coming from
voluntary donations. Mary Marsh has been Director and Chief Executive
since September 2000.
Welcome for the Charities Bill
1. We welcome the Draft Charities
Bill and strongly support the widely shared view in the charity
sector that this much needed legislation should be in place as
soon as possible. The Draft Bill proposes many of the changes
that were well supported in the extensive consultation that preceeded
it.
Public confidence
2. Clarity and transparency are
fundamental to establishing clear accountability and effective
regulation. With this independent scrutiny in place, particularly
for the larger charities with over £500,000 annual income,
public confidence should improve. Voluntary donations and volunteer
activity are essential to allow charities to contribute to civil
society in ways that would not happen otherwise. Charities enjoy
considerable public confidence, higher than that of many commercial
and statutory organisations. Maintaining and enhancing this confidence
is vital to enable further growth and development.
Charitable purpose and public
benefit
3. We agree that the charitable
purposes listed define the sector. These purposes were widely
approved through the consultation.
4. We welcome the Bill's proposal
that any proposed or existing charitable purpose is subject to
a public benefit test. We welcome the absence of any statutory
definition of what constitutes a public benefit test. Over time
the test will be able to evolve in line with the needs and demands
of society .
5. We want to see an explicit
role for the Charity Commission to continue to apply the public
benefit test to active charities. We suggest that the Joint Committee
considers how this could be made explicit in the function of the
Charity Commission. One way may be to consider objective 3 in
paragraph 5.(2).3. Is not the application of public benefit
the same as a positive social impact and could not the words public
benefit replace this?
6. We do not think that economic
impact should not be included in the Charity Commission's objectives
- action for the public benefit can have either positive or negative
economic impact in both the short and the long term.
Service delivery
7. While the focus of the Bill
is on the regulation of the charity sector, we believe the Bill
will support and facilitate service delivery funded by both public
sources and voluntary donations by providing:
- Greater clarity in the regulatory
control framework allowing resources to be focused on service
delivery rather than administration
- Better definition of charitable
purpose reducing concern and debate over the scope and scale of
service delivery.
8. There are, however, two obstructions
to effective public service delivery by charities not relevant
in this Bill which should be recognised and considered elsewhere:
- The 17.5 percent cost penalty for
charities over delivery of the same service by the public sector
arising from the different status with regards to VAT;
- The requirement for the charity
to take on public liability insurance for the delivery of contracts,
which comes at an increasingly high cost.
Charity Commission
9. We support the establishment
of the Charity Commission as a body corporate and the proposed
objectives, functions and general duties with the exception of
the regulatory objective 3 - social and economic impact as explained
in paragraphs 5 and 6 above .
10. We suggest the Joint Committee
consider how the relationship between the regulatory and advisory
roles is defined. We support the dissemination of good practice
established through robust strategic regulation. There needs
to be clarity between the requirements for compliance to regulation
and what is provided as information and guidance.
11. As for all regulation there
needs to be close attention to value for money. The economic
assessment of the proposals appear reasonable. It should be remembered
that charities can be subject to a range of other regulation,
in particular with regards to service delivery.
Charity Appeal Tribunal
12. We welcome the introduction
of an independent body for appeals against Charity Commission
decisions.
Mergers. Acquisitions, Closure
13. The number of registered
charities continues to grow by around 1800 a year. The steady
creation of new charities is a good thing and refreshes the sector.
The intake of new charities, however, is not being matched by
a fall out of charities that have fulfilled their purpose. The
result is a plethora of small, often dormant charities. In June
2002, 61 percent of charities had an income of £10k or less.
14. The section on mergers in
the bill removes some of the legal barriers to merger, but does
not actively encourage charities, once they have fulfilled their
need, to merge or dissolve. As the growth in the number of charities
will inhibit the effective operation and regulation of the sector,
we suggest that the role of facilitating the merger and closure
of charities as suggested by Private Action; Public Benefit, be
explicitly defined as a function of the Charity Commission in
Part 2, Chapter 1, Section 5.
Regulation of fundraising
16. We support the self-regulation
of fund raising. It is essential that the proposals for this
must involve all appropriate parties across the whole sector including
chief executives and trustees.
Trading
17. Private action, public benefit
recommended amending charity law to allow charities to undertake
all trading within the charity, without the need for a trading
company. The recommendation was not accepted by Government and
so is not included in the Draft Bill. We suggest this should
be revisited by the Joint Committee, with a view to establishing
more efficient and viable means of trading through charities of
different sizes.
18. Regardless of whether or
not the recommendation is reinstated, we suggest that the Joint
Committee should strongly advocate a relaxation of the administrative
burdens for charities with trading subsidiaries.
Trustees liability
19. We welcome the clauses that
relieve Trustees of liability for breach of trust, providing they
have acted honestly and reasonably.
Payment of Trustees
20. We are not generally in favour
of the payment of Trustees and welcome clause 27:73A (7). We
still remain concerned that the payment clauses could be abused
and we suggest the Charity Commission should request a statement
from the auditor of those charities subject to audit, and who
have made payment to Trustees, confirming that conditions A to
D in paragraph 73A have been adhered to.
Mary Marsh
4 June 2004
| 
