10.Memorandum from the Charity Commission
I am writing in response to your letter of 28
February regarding a call for written evidence in connection with
an inquiry by the Joint Committee on Human Rights into the meaning
of public authority under the Human Rights Act (HRA). I am sorry
that we have not met your requested deadline of 21 April and I
hope that it is still possible for you to accept our evidence.
The Joint Committee on Human Rights has requested
written evidence on the following points:
1. Whether in your view the meaning of public
authority under the Human Rights Act, as interpreted by the Courts,
is the right one?
The Charity Commission is a regulatory body
and, as such, we do not consider it our role or function to second
guess the Courts on this issue. However, our regulatory experience
would suggest that:
(i) It is right to exclude charities as a
class from the meaning of a public authority under the HRA; and
(ii) Charities would welcome greater clarity
about when functions they undertake fall within the HRA.
We recognise that the present position gives
rise to a great deal of uncertainty for charities about whether
and under what circumstances some or all of their functions will
be regarded as "public functions" and therefore subject
to the HRA. The charitable sector is made up of an extremely broad
range of organisations undertaking a wide variety of different
functions in a variety of ways. The exercise by charities of most
of those functions would not, in our view, give rise to Human
Rights considerations, those functions not being of a public nature.
Currently, since responsibility to comply with
Convention Rights depends, not on the status of the organisation
concerned, but on the nature of the functions it performs, charities
do not fall within the definition of "public authority"
by virtue of their being charities. Whilst some people might argue
that charities are in receipt of public support (by way of tax
reliefs for example) and should all therefore be considered "public
authorities", their functions are by and large of a private
nature undertaken for altruistic purposes which justifies that
public support. There appears to be no reason therefore why charities
(as a class) should be considered public authorities any more
than non-charitable private organisations. This, though, is a
matter for the Courts and Parliament to determine, not the Charity
Commission.
2. What, in practice, might be expected to
be the impact of the definition of public authority applied by
the Courts for the protection of human rights?
As indicated above, one likely impact of the
definition applied by the courts will be greater uncertainty on
the part of charities regarding the extent to which functions
they undertake are or are not subject to the provisions of the
HRA. Increasingly local and health authorities are using private
and voluntary sector bodies (including charities) to deliver services
under contract. The uncertainty that exists about the extent to
which those contracted out services fall within the HRA has led
to many authorities seeking to include specific clauses in those
contracts which state that, in all respects with regard to the
contract, the charity is to act as if it were a public authority
under the HRA. This practice seems likely to increase as a result
of the Leonard Cheshire decision.
One important characteristic of charities is
that they are independent; the independence of trustees is essential.
They must make their own decisions and exercise their discretions
solely in the interests of the charity. Charity trustees must
not be controlled or directed by anyone outside the charity (except
where they have to comply with general legal requirements—such
as health and safety—which an outside body is there to enforce),
act on the instructions of the person or body which appointed
them as trustees, such as members of the charity or central or
local government, or comply with any external or internal directions
if, in doing so, they would be acting outside the charity's purposes.
We would therefore expect charity trustees, when entering into
contracts with public authorities, to ensure the contract retains
for them enough discretion over the delivery of the service to
sustain independence.
On the face of it, the definition of public
authority applied by the courts appears to give rise to an anomaly
whereby (for example) local authority provision of care home accommodation
would afford HRA protection but not where that service provision
is undertaken on behalf of the local authority under contract
by a charity. However, other human rights protections are available
where services are provided under contract, either under contractual
obligations or by seeking redress from the delegating public authority.
There remains an issue about the provision of
particular services by charities which are similar to those provided
by a local authority but which are not provided under contract.
The provision of almshouse accommodation for example. Residents
of private accommodation have a formal lease or licence to occupy
the premises which will be subject to Landlord and Tenant legislation,
which will afford them certain rights. Residents of local authority
provided accommodation also have formal rights of occupation.
Almshouse residents, though, have no such legal rights, since
they occupy the accommodation at the discretion of the charity's
trustees. Those discretions must of course be exercised by the
trustees for the benefit of, and in the interests of, the charity
within the scope of the objects and powers of the charity and
the law relating to the exercise of trustee discretions. The provision
of housing is not in itself a charitable purpose; it is only charitable
if it is provided to meet the needs of proper charitable beneficiaries.
Some charitable housing is sheltered accommodation for the elderly,
or for those with special housing needs because of disability.
Other charitable housing may be aimed at those in financial need.
This sort of housing is sometimes referred to as "voluntary"
or "social" housing as it is usually let at below market
(ie "sub-market") rents. It thus contrasts with private
owner-occupied or rented property. Since the provision of almshouse
accommodation is not a public function it is not subject to the
provisions of the HRA. This would only be remedied if the law
was changed to bring almshouse or other charitable housing provision
within the scope of a public function within the meaning of the
HRA.
To the extent to which the HRA currently does
or might in the future apply to certain functions discharged by
charities then it would be necessary to extend the discretion
of charity trustees to include consideration of Convention rights,
or extend very substantially the impact of the current legal obligations
which the law imposes on trustees when exercising trustee discretions.
This would need to be subsumed into the law relating to the exercise
of trustee discretion, to be applied on a proportionate basis
appropriate to the size and responsibilities of the charity. Since
charity trustees would be required only to take a proportionate
approach to the consideration of Convention rights, we do not
think in practice that this would present them with too many difficulties.
3. What steps, if any, should be taken to
address any potential gaps in Human Rights Act protection and
accountability, following the Leonard Cheshire case?
4. Whether any alternative means, apart from
sections 6(3)(b), (such as contractual terms) could effectively
fill any potential gaps in human rights protection?
It is our view that any potential gaps in HRA
protection and accountability following the Leonard Cheshire
case can be adequately filled, in circumstances where charities
are supplementing local authority functions by making charitable
provision available on the basis of local authority funding, by
contractual provisions designed to protect Convention rights and/or
by obtaining redress from the delegating public authority.
Amendments to our operational guidance
We are in the process of reviewing our operational
guidance on the implications of the HRA for charities, including
the meaning of a public authority, in light of recent court decisions.
It is not our intention to produce definitive guidance on the
meaning of public authority but to extract from the relevant case
law the characteristics of a public authority for the purposes
of the HRA. The revised guidance is not yet available.
30 April 2003
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