DCH 142 The Royal Borough of Kensington
& Chelsea
RESPONSE BY THE ROYAL BOROUGH OF KENSINGTON
AND CHELSEA TO THE GOVERNMENT'S DRAFT CHARITIES BILL PUBLISHED
27 MAY 2004
Background
1. The Royal Borough of Kensington
and Chelsea ("RBKC") welcomes the opportunity to comment
upon the proposals contained in the draft Charities Bill relating
to public collections. RBKC participated in the consultation exercise
following the publication of "Public Collections for charitable,
philanthropic and benevolent Purposes" in September 2003.
2. In essence, RBKC's position remains
unchanged from that set out in response to consultation dated
December 2003, a copy of which is attached hereto for ease of
reference.
3. Having considered
the relevant provisions of the draft Bill in
some detail, RBKC nevertheless
wishes to comment further on
the proposed local authority licensing
system for public collections.
General Remarks
4. In principle RBKC welcomes the draft
Bill to the extent that it seeks to update the current legislative
framework surrounding charitable organisations which is both arcane
and fragmented. Furthermore RBKC agrees that there is merit in
harmonising the system in order to take a consistent approach
to public collections both in and outside London.
5. RBKC recognises the
need for a stringent and comprehensive licensing system for charities
and particularly approves the attempt by the proposed legislation
to bring within the regulatory system individuals soliciting direct
debit mandates in the street. This is a phenomenon about which
RBKC has long been concerned as it appears to be one of the London
Boroughs which is targeted for this type of operation. This observation
is however subject to a caveat: RBKC is not satisfied that the
legislation as presently drafted fully addresses the problem caused
by the proliferation of this type of collection; nor does it,
in RBKC's view, tackle the increasing use by charities of individuals
earning commission ("commission agents"). These matters
are considered in more depth below.
6. RBKC's principal
misgivings about the proposed new system for licensing public
collections surround the financial and administrative burden that
will be placed upon local authorities as they struggle to administer
the new scheme, apparently without any income stream. RBKC is
extremely concerned that the draft Bill makes no mention whatsoever
of any power to charge for certificates and permits, although
it is possible that provision may be made for such a power by
way of regulations made under Clause 42.
7. If the proposed new
regime is to work it is imperative that local authorities carry
out their responsibilities effectively and efficiently. RBKC is
firmly of the view that this will prove impossible in the absence
of very significant additional funding.
8. RBKC concurs with
the ALG in suggesting that the Charities Commission, which already
has responsibility for determining applications for charitable
status, would be far better placed than local authorities to administer
the licensing scheme. Furthermore, such an arrangement would have
the merit of guaranteeing a centralised and thus consistent approach.
Will the Legislation
achieve what it sets out to achieve?
9. The remainder of
this response sets out RBKC's observations in more detail.
10.RBKC welcomes the
inclusion of "other property" within the definition
of "public charitable collection" in clause 37. As
stated in its response to consultation, RBKC has of late become
extremely concerned by the increasing number of charitable collections
within its area involving individuals, who are often employed
by charities on a commission basis, soliciting direct debit details
from the public. RBKC remains to be satisfied that the legislation
as drafted will tackle this problem.
11. Whilst RBKC appreciates
that the term "other property" may be construed to include
direct debit details, it considers that there would be merit in
including in the proposed new section 65(2)(b), after the words
"to give", the words "or to promise to give",
in order definitively to resolve what has hitherto been an area
of uncertainty.
12. RBKC remains of
the view that collections of this type by commission agents should
be banned altogether. The legislation fails to accomplish this.
Whilst RBKC recognises that the proposed "due diligence"
ground for refusing to grant a certificate of fitness in clause
40, new section 66F (1)(c) may serve to dissuade charities from
using commission agents, this test may prove difficult to apply
in practice, as to which, see below.
13. More fundamentally,
RBKC is disappointed that government has not seen fit to ban the
use of agents who are frequently paid a high rate of commission,
something which both reduces the proportion of donations benefiting
the intended recipient and encourages some agents to behave in
an intimidatory and aggressive manner towards members of the public.
14. RBKC welcomes the
fact that the proposed legislation (in enacting the old section
69) will enable permits for collections to be refused on, inter
alia, the basis that other collections are taking place in
the area and that "saturation point" has been reached.
This addresses RBKC's concern relating to the proliferation of
collectors of direct debit mandates.
Should Local Authorities
be responsible for licensing Charities and for enforcing the new
System?
15. Whilst RBKC welcomes
the fact that the draft Bill will give it some degree of control
over public collections taking place within its area, it considers
that it will be wholly unequal to the task of administering the
licensing functions conferred upon it in the absence of very significant
additional funding. The costs implications of the proposals are
considered further below. The absence of an appropriate income
stream will place an intolerable burden upon its Licensing Team
which, by the time the draft legislation comes into force, will
already be struggling to cope with its duties under the Licensing
Act 2003 and, possibly, the Gaming Act 2005.
16. RBKC stands by its
original suggestion that the Charities Commission should be responsible
for licensing charitable collections. However it is of the view
that local authorities are better placed to carry out the attendant
enforcement functions, albeit there are costs implications of
this aspect as well.
Funding and Resources
17. Nowhere in the draft
Bill is there any reference to a power to charge for certificates
of fitness or permits. RBKC is extremely concerned by this apparent
omission and would urge that provision is made for charging, whether
it be in the primary legislation or by way of regulations.
18. As to the level
of the charge, RBKC would like to see this set at a realistic
level which covers not only the licensing element but also the
total cost of administering and enforcing the new regime. If such
does not prove to be the case, RBKC is concerned that it will
not be able to meet its new responsibilities effectively.
19.At present there
is very little, if any, evidence to indicate what the cost of
enforcement is likely to be. RBKC fears that the cost could be
high, especially given some of the practical problems that may
arise, as to which, see below. RBKC is particularly concerned
about this as it is one of the London Boroughs which attracts
large numbers of charitable collections. Were the enforcement
responsibilities to be passed to RBKC and licensing responsibilities
to go elsewhere, or in the absence of the power to charge realistic
fees for licensing, it might be that additional funding would
need to be secured to cover the costs of enforcement.
20.Furthermore RBKC
is concerned by the costs implications of the appeal route set
out in clause 40, new section 66H. The risk of being held liable
for costs in the courts (particularly in the Crown Court) will
place an additional burden on local authorities and may lead to
a reluctance to oppose appeals.
Timescales
21.RBKC has concerns
in relation to the proposed timescales set out in the Bill clauses
40, new section 66D(3)(a) and clause 41(3), new section 67(3)
and (3A). RBKC is not satisfied that it would be possible to carry
out all the necessary inquiries during the tight timescale set
by the new section 66D(3)(a). Furthermore the question must be
posed as to whether the police, who will be responsible for carrying
out the checks required by the new section 66H, will have the
resources to comply with the tight time limits.
22.RBKC wishes to highlight
the fact that, under the legislation as presently drafted, new
section 67(3A) requires the inquiries referred to above to be
carried out within 14 days of the application for a certificate
of fitness if last-minute applications for permits for collections
are to be avoided. It appears to RBKC that it will prove to be
impossible to adhere to these timescales.
Other practical Issues
23. RBKC notes that
certificates of fitness may last for a maximum period of five
years. It anticipates difficulties in dealing with applications
for the same if all, or the majority of, applicants ask for the
maximum duration in that those certificates will all come up for
renewal at the same time.
24. In relation to collections
which are proposed to be carried out trans-authority, RBKC is
of the view that the test for determining which is the "appropriate
local authority" set out in clause 40, new section 66D(5)(c)
is not sufficiently clear; this may lead to disputes. The issue
of where a charity "principally conducts its business"
may prove a difficult one to resolve.
25. Of more concern
is the fact that charities may use this lack of clarity to exploit
the system by consistently making applications to authorities
which they have identified as being "soft targets".
26.Whilst RBKC welcomes
the "due diligence" ground for refusing certificates
of fitness in clause 40, new section 66F(1)(c) in that it should
encourage those who operate collections to exercise control over
the way in which the collection is carried out, the application
of this criterion is likely to cause practical difficulties. In
the absence of a central register it will be a difficult, costly
and time-consuming process to determine whether an applicant has
been guilty of failing to exercise due diligence in the past.
This exercise will become impossible in cases where a charity
has moved its operations into a local authority's area from elsewhere.
27. This consideration
reinforces RBKC's view that a central agency such as the Charities
Commission should be responsible for licensing charities.
Conclusion
28. RBKC welcomes the
draft Bill in principle to the extent that it seeks to regulate
public collections in a consistent and comprehensive manner. However
it does not believe that local authorities should be the recipient
of licensing functions.
29.RBKC's principal
concerns relate to the question of where the resources to operate
the new system are to be found. However it has a number of other
concerns on the detail of the proposals and concerning the operation
of the new regime in practice.
30. RBKC would ask
that its comments are taken into account and would welcome the
opportunity to make oral representations to the Joint Committee
if so invited. In addition it would welcome the opportunity to
have further input into the detail of regulations and so on once
the final decision has been made.
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