Draft Protection of Charities Bill - Joint Committee on the Draft Protection of Charities Bill Contents


2  Policy context of the draft Bill

What issues does the draft Bill seek to address?

22. The explanatory notes which accompany the draft Bill set out its purpose as to provide "stronger protection for charities in England and Wales from individuals who are unfit to be charity trustees" and to equip "the Charity Commission with new or strengthened powers to tackle abuse of charity more effectively and efficiently."[20] The previous Chapter outlined the policy developments which led the Government to conclude that the draft Bill was necessary.

23. Subsequent chapters will in turn explore the provisions of the draft Bill. Before doing so, the overall context will be considered. In order for the Committee to form its own view on the necessity of the additional powers in the draft Bill, it was important for us to explore the policy context surrounding it, and in particular to try to come to an understanding of the scale and nature of the key problems which the Bill is trying to address. In addition, much of our evidence focussed on operational or resource questions for the Charity Commission, which are explored briefly in this Chapter.

Abuse in the charitable sector—how big is the problem?

24. In the evidence we received, there was broad consensus that the abuse of charity was rare.[21] William Shawcross, Chairman of the Charity Commission, said, "Most of the charitable world is run by superb, trustworthy, decent volunteers, who have the charitable purposes of their charities totally at heart, and they will not be affected by these new powers one way or the other, but there are a few bad charities that spoil the reputation of the whole sector."[22]

25. The Government outlined the three key issues it thought the Charity Commission needed to regulate. The first issue was "the honest mistakes that trustees make", which was described as, "by far the most common"; the second issue was "persistent poor management of charities" such as late filing of accounts; and, the third and rarest was, "deliberate abuse, where people are going out of their way to abuse their position in a charity for personal gain … or some other non-charitable purpose".[23]

26. One way to assess the degree of abuse in any sector is to examine the investigative workload of its regulator. The chart below sets out the different issues of concern raised as a result of investigations by the Charity Commission between 2007 and 2014, and what proportion of its caseload each issue represents.Figure 1 Types of issues and concerns raised as a result of Charity Commission investigations, 2007-14

Source: Charity Commission[24], Baseline: 526 investigations. Note: Most cases involve more than one issue

27. Inferences from the chart about the scale of abuse should be approached with a degree of caution because the data only cover instances in which the Charity Commission has opened an investigation. It may be that the Charity Commission is more proactive in some areas than others, or that it is not aware of the full scale of charitable abuse. However the data do not contradict the view that a large number of cases relate to honest mistakes, with 24 % of cases relating to "Accounting issues" and "[governing] document compliance". Furthermore, taken together, "fraud allegations", "criminal activity" and "terrorism-alleged connections" make up 13 % of the areas of concern.

28. We heard that fraudulent abuse of charitable assets was a growing problem, or at least that it was being detected to a greater extent. The City of London Police said that "from 1 April to 30 November [2014] we have already seen 950 charity offences reported to Action Fraud and the NFIB [National Fraud Intelligence Bureau], which is up from 565 in the last financial year. Average losses for a charity [as a result of these offences] range between £5,000 and £2.5 million."[25] It should be noted that the Charity Commission's recent increase in investigative activity (which is discussed in paragraphs 44-51 below) may have contributed to the increase in the number of cases. Additionally a number of these offences were linked to "persistent mismanagement of a charity" and were "not necessarily criminal".[26] HMRC cited a smaller number of fraud offences. It said that in a typical year, the number of charities where there was "serious tax avoidance, evasion and fraud "would probably be in the low 10s". Despite this relatively low number of cases, the losses could be substantial. HMRC said that, "there have been individual cases reported in the press where £40 million or £50 million was at risk … when people make errors and mistakes, they do not tend to be of that magnitude".[27] The City of London Police said that the new powers would enable the Charity Commission to deal more effectively with those cases which were reported as fraud, but actually related to persistent mismanagement of a charity.[28] HMRC said that some of the tax avoidance cases "definitely brought the sector potentially into disrepute" and that the Commission having more power to act in those cases, through the draft Bill, would be "very good".[29]

29. The Office of the Scottish Charity Regulator (OSCR) told us that "the charity sector is becoming increasingly complex" and suggested that new powers could allow the Commission "the flexibility (with appropriate safeguards) to take decisive action in a range of complex cases".[30]

30. Other witnesses queried whether there was evidence of widespread abuse. The Joseph Rowntree Charitable Trust (JRCT) suggested that there was "little robust, factual information about the nature and extent of misconduct or mismanagement by trustees and charities"[31] and that the extent of fraud in the charitable sector was significantly lower than in the public or private sectors.[32] JCRT maintained that better evidence of the levels and trends of misconduct and mismanagement was necessary to decide whether the Charity Commission needed further powers.[33] Bond, a UK membership body for organisations working in international development, said that the language in the draft Bill overstated the scale of the problem.[34]

31. A number of respondents suggested that robust regulation was important regardless of the scale of the problem because of the role it played in maintaining public 'trust and confidence' in the charity sector.[35] The Cabinet Office said that although public trust and confidence was currently "pretty high" it was important to make sure that "we have a regulatory regime and a regulator in place that supports public trust and confidence in the work of charities".[36] The Small Charities Coalition said that,

    "regulation is extremely important to charities, or it certainly ought to be. The lifeblood of charities comes from individual donations…They have to be able, therefore, to ensure that they have public trust and confidence, otherwise that just disappears."[37]

32. Similarly, the National Council for Voluntary Organisations (NCVO) said that isolated cases needed to be tackled in order to "prevent a damaging effect on the whole charity brand."[38] A smaller number of witnesses were less certain that tougher regulation and public trust were so closely linked,[39] and the Cabinet Office acknowledged that there could be a tension between the Charity Commission's investigatory function and its maintenance of public confidence in the charity sector.[40]

SCALE OF THE COUNTER-TERRORISM PROBLEM

33. The draft Bill seeks to hinder the exploitation of charities by extremist groups. In 2013 the Prime Minister's Task Force on Tackling Radicalisation and Extremism concluded that new legislation to strengthen the powers of the Charity Commission would contribute to its tackling terrorism and extremism more effectively.[41] Before assessing the draft Bill's effectiveness in this regard (see Chapter 5), we consider the extent of the problem it is seeking to solve.

34. DCS Terri Nicholson from the Metropolitan Police's Counter-Terrorism Network told us that the counter-terrorism network was currently investigating around 40 cases relating to abuse of charity. However, she said that it was "difficult to put a scale" on the extent of this type of abuse because of the "Syria factor". She added that it was difficult to assess the full scale of this type of abuse because the situation in Syria was, "very much an emerging picture".[42]

35. William Shawcross identified 86 charities where there had been allegations of terrorism or which were "at risk of extremism".[43] A newspaper article in November 2014 reported his fears that groups distributing money and supplies donated by the public in the UK could be exploited by Islamists to smuggle money, equipment and fighters to terrorists on the front line.[44] However, as with issues of more general abuse, our respondents questioned the evidence base for the scale or significance of the problem.[45] The think-tank Claystone told us that "data gathered pertaining to misconduct or mismanagement on issues relating to extremism is unsound".[46] Bond suggested that counter-terrorism issues genuinely affected only a negligible proportion of charities.[47]

36. Sir Stephen Bubb, Association of Chief Executives of Voluntary Organisations (ACEVO), suggested that the issue of terrorist and extremist abuse in charities was better tackled by other authorities.[48] Claystone also took issue with what it described as the Charity Commission's growing national security remit, which it described as being based on "confused, contradictory" policies and procedures.[49] The JRCT said that there had been a "greater politicisation of policy discussions around charities" and welcomed the NCVO review of the Charity Commission's governance structure, which it felt would enable the Commission to put "questions about its political neutrality to rest".[50]

37. The consensus of opinion is that abuse, distinct from honest mistakes and persistent mismanagement, is rare in the charity sector. There is, moreover, insufficient evidence available to make an accurate assessment of the incidence or significance of such abuse. We heard that, when such abuse does occur, the financial costs and reputational damage to the charity sector can be considerable. It is right that the Charity Commission should be more effective at tackling it than has historically been the case. This raises the question of whether this would also need additional legislative underpinning and, if so, whether the proposals in the draft Bill are the correct ones.

Excepted and exempted charities

38. The Charity Commission's limited regulatory control over excepted and exempted charities makes it difficult to assess the full scale of abuse of charity, and whether the powers in the draft Bill are sufficient to address it.

39. There are around 75,000 excepted charities,[51] and around 14,000 exempted charities[52] in England and Wales. These charities are not required to register with the Commission. Further detail about excepted and exempted charities is set out in the Box below.Box 1: Definitions of exempt and excepted charities
·  "Exempt charities" are institutions which cannot be registered with the Commission and are not subject to its direct regulatory jurisdiction. They were initially granted the exemption because they were considered to be adequately supervised by another body or authority. The exempt charities are those institutions that are comprised in Schedule 3 to the Charities Act 2011 ("the 2011 Act"). Examples of such charities are most universities in England and the boards of trustees of various specified museums and galleries.

·  "Excepted charities" are charities that have been excepted from the requirement to register with the Charity Commission and have an income of less than £100,000. Such excepted charities do not have to meet the requirements that flow from registration such as filing annual accounts, but do come under the Commission's regulatory jurisdiction. Types of charities that are excepted include scouts and guides units, non-public facing armed services funds, Parochial Church Councils and certain Christian religious denominations. In addition small charities with an annual income of less than £5,000 are excepted (other than Charitable Incorporated Organisations, all of which must register, regardless of income).

40. These exemptions and exceptions apply in England and Wales, but not in Scotland or Northern Ireland, where all organisations representing themselves as 'charities' must be registered with the relevant charity regulator.

41. Professor Gareth Morgan described the legal framework around excepted and exempted charities as "extraordinary",[53] pointing to the potential scale of unreported wrongdoing.

42. The absence of excepted and exempted charities from the purview of the Commission means that the draft Bill could fail to address the genuine extent of abuse in the charity sector. Whilst it is outside the scope of the draft Bill, a possible solution would be to remove the statutory exceptions and exemptions. William Shawcross saw the value in having "a level playing field for all such charities". However, he made clear that if such a change was brought about, the Charity Commission "would need additional resources to meet the costs of registering and regulating them. It is quite a large number of charities, and almost half as many again as we already have".[54] Although registration would place some burdens on small charities, it could also convey benefits. The Small Charities Coalition pointed out that a number of charities with an income of less than £5,000 register with the Charity Commission because "The implied accreditation system is important to them, with donors and public support generally."[55]

43. A significant number of charities are excepted or exempted from the requirement to register with the Charity Commission. This denies the Charity Commission full regulatory control over the charity sector, and makes it harder to ascertain the full scale of abuse.

44. We recognise that the draft Bill is not the correct vehicle to address this issue. We therefore urge the Government to consider whether all charities should be brought within the requirement to register with the Commission in the next substantial review of charity law. We hope that the effects of the Commission's new investment in digitisation will help these registrations to be carried out without undue additional resource.

A more active approach by the Charity Commission

45. In Chapter 1 we reported that the culture and performance of the Charity Commission has been criticised by a number of bodies.

46. Some of the strongest criticism of the performance of the Charity Commission came from the NAO in December 2013, which highlighted issues related not only to the legal powers of the Commission but also with, "the overall regulatory approach and the culture within the Commission; its resources; poor use of its own data" and "weaknesses in sharing information".[56] The NAO also found that the Charity Commission was "reactive rather than proactive in its approach" in that almost all its investigations were prompted by external sources.[57] The Commission has to an extent conceded these shortcomings and our evidence suggests that the Charity Commission has responded over the past year by becoming more proactive. William Shawcross said that in response to the Cup Trust case and criticism by select committees he had sought to instil a "much more engaged and much more proactive" approach under a new leadership team and management structure.[58]

47. One possible indicator of the Charity Commission's regulatory "proactivity" is its use of the power to open a statutory inquiry. Figure 2 sets out the number of statutory inquiries opened and closed by the Charity Commission between 2007 and 2014.Figure 2 Number of statutory inquiries opened and closed by the Charity Commission per year

Source Charity Commission[59]

48. Figure 2 shows a marked increase in the number of statutory inquiries opened between 2012 and 2014. Assuming the level of abuse has not increased, this would seem to support the Commission's view that it is, "becoming a more effective, proactive regulator".[60]

49. The Wales Council for Voluntary Action (WCVA) and NCVO told us that from their perspectives the Commission had become a more active regulator.[61] The NCVO said that "They have opened more statutory inquiries. They have been more on the case, as it were, and that is something we welcome".[62] On 22 January 2015, the National Audit Office published a report following up its 2013 review of the regulatory effectiveness of the Charity Commission. It found that the Commission was making more effective use of its powers. In particular the NAO noted that the Commission used its information gathering powers 652 times in 2013-14 compared to 200 times in 2012-13 and used its enforcement powers 56 times in 2013-14 as compared to three times in 2012-13. The NAO also said that the Commission had improved its use of data and its follow-up checks, although further improvements to follow-up were necessary. The NAO was concerned that the Commission was taking longer to register charities and that its internal targets had not been met in the last 18 months. It reported that the Commission had established a team to process the backlog of overdue applications.[63]

50. Some of our witnesses felt that the Commission's more proactive approach either negated the need for the powers provided for in the draft Bill or meant that it would be sensible to await an assessment of the impact of the Commission's making greater use of its existing powers before proceeding.[64] The Commission rejected this argument. William Shawcross said that "These powers will lift several important constraints upon us, which have been obstructing our effective regulation for a long time. We have considered this for a long time … It would be marvellous for us if it could become law next year".[65] Rob Wilson MP, the Minister for Civil Society, agreed that legislation was now needed. He described the powers in the draft Bill as being part of "a multi-strand approach" to addressing abuse in the charity sector. He said that, "there is no point in the NAO asking, or telling, the Commission to be more proactive and then finding that it cannot act when it finds abuse in the system. It is really important that the Commission has these powers."[66] A number of witnesses[67] from the charity sector agreed that while there was a need for the Charity Commission to make better use of its existing powers, the proposed powers would usefully address the "gaps and deficiencies"[68] in the Charity Commission's regulatory armoury.

51. We are satisfied that, notwithstanding the evident increase in the Commission's use of its existing powers, there remains an overall case for legislative gaps in its regulatory armoury to be addressed now, rather than waiting for it to exhaust the benefits of its more proactive use of its existing powers. The case for each specific power is addressed in the remaining chapters of this Report.

Non-regulatory functions versus enforcement

52. This section considers whether the Commission's renewed focus on its regulatory function (through increased attention to investigation and enforcement) has diverted attention and resources from its core role of providing advice and support to charities, and carrying out operational functions such as granting permissions. Members of the Charity Law Association told us that "With the increased emphasis on the enforcement role of the Commission … we have seen an adverse impact on the information and enabling side of the Commission's work".[69] The CLA told us that the day-to-day interactions between the Commission and charities were the basis on which charities would judge its effectiveness as a regulator, and that better guidance and cooperation with umbrella bodies was therefore essential.[70]

53. The Directory of Social Change shared this view, making clear that enabling charities to comply with the law through advice and guidance was "integral to the regulatory approach, not an added 'extra' or luxury".[71] Other witnesses stressed the importance of this function, especially for new trustees and those of small or emerging charities.[72]

54. The Charity Commission said that their target response time for all queries was 15 working days and that, as at 16 December 2014, it had been met in 74 % of cases.[73] However, the CLA said that, recently, the time taken by the Charity Commission to respond to queries had increased significantly (and 30 working days was "not uncommon"), and that the helpline was now only available in the mornings.[74] The Minister defended these timescales, saying that the Commission received a large volume of queries: "48,274 e-mails, 88,822 phone calls and 9,681 letters last year" and that it was therefore, "impossible for it to deliver the sort of service that we have perhaps seen in the past, and certainly not a one-to-one service".[75] The Charity Commission said that due to the large volume of inquiries it received, part of its 'transformation budget' was being spent on improving online services so that, "where charities come to us for assistance … or permission to do certain things … much more of it can be done online much faster".[76]

55. Witnesses also raised concerns about the accessibility of the Charity Commission's website, since it had migrated to the gov.uk site. The CLA said its website had become "much more difficult to search and find relevant guidance".[77] Professor Morgan observed that there were "all sorts of issues at the moment about the Commission's website."[78] The Charity Commission acknowledged that there had been "teething problems" caused by the migration to the gov.uk site, but that they were working to improve the website.[79]

56. Some witnesses did not see a tension between the supportive and regulatory aspects of the Commission's role. Sir Stephen Bubb, ACEVO, said that distinguishing between the Commission's role as "police" and "friend" was "silly".[80]

57. The Charity Commission has to tread a fine line in its dealings with the sector. Its primary focus has to be that of civil regulator. It must also carry out its core operational functions, such as registering charities, granting regulatory consents and making orders and schemes. However, it should also act as a 'facilitator', helping charities, especially smaller charities, understand the nature of their obligations under the law. Nevertheless, the Commission has to guard against providing advice that inevitably is seen by the recipient as regulation, so contributing to 'regulatory creep'.

58. It has been suggested in evidence that greater emphasis on investigation and enforcement has had a negative impact on the Commission's ability to process new registrations and to provide support and advisory services, which were referred to as "back office" functions by its Chairman. The draft Bill would give the Commission new powers in the area of enforcement and thus potentially new areas of activity. If the Commission is to be asked to fulfil its existing statutory remit in the most effective way the question of its resources must be considered.

59. For this reason, although it is not a matter for the draft Bill, the Commission's resources are considered below.

60. As indicated previously, the Commission regulates a large and diverse sector. Given its limited resources, much of its work will continue to be primarily responsive in nature. Its advice and guidance are essential to playing the 'facilitator' role. We note the weight of evidence which suggests that providing the Commission's online advice within the current pared-down framework of the gov.uk website is unlikely to give charities, particularly the smaller ones, what they need and that it has become more difficult for users to navigate.

61. We recommend that, in light of the evidence we have received, the Government reviews the Charity Commission's pages on gov.uk and works with them to improve the availability and accessibility of the Commission's information.

The Commission's resources

62. A number of witnesses suggested that the Charity Commission's principal difficulty was a lack of resources rather than of legislative power. The charities sector in England and Wales is large and diverse resulting in "950,000 odd trustees"[81] whom the Commission is responsible for regulating. The Commission has a little over 300 staff[82] and is split between three geographical locations. In recent years it has, in common with the rest of the public sector, undergone significant reductions in resource.[83]

63. Lord Phillips of Sudbury said that he was "unconvinced of the need for the Bill", which failed to address that the Charity Commission was, "seriously understaffed".[84] He said that while Charity Commission employees do their best, they have "far too much to do".[85] Its lack of resources might mean that the strengthening of the Charity Commission's powers through the draft Bill has an adverse effect on tackling abuse:

    "where a Regulator threatens seriously, the person(s) threatened will run for the lawyers (and lots of them if he/she/they are well breeched!) which, the Commission well know, will tie up more resources than they can deploy. That discourages the Commission from taking on any but the strongest cases, which even then tend to tie down disproportionate resources."[86]

64. Lord Phillips suggested that the Commission would need to employ a greater number of experienced lawyers in order to implement the existing legislation effectively, and that if it did so, the draft Bill would be unnecessary.

65. Victoria Keilthy, Director of Private and Third Sector Delivery at the NAO, agreed that resources had an impact on the Commission's ability to regulate. She said that the NAO had found, "a decline in the number of monitoring cases because the Commission had taken the decision to reduce the number of staff in that area."[87]

66. The Minister, acknowledging that resources were an issue, said that "More resources have been made available to the Charity Commission: £1 million for the period 2014 to 2015, and £8 million to invest in capital",[88] although, as he conceded the Government had not carried out an impact assessment to ascertain whether these resources would be enough to carry out the more greater activity expected of it.[89] Along with other respondents, the Association of Charitable Foundations expressed concern that the additional resources would not be sufficient to enable the Charity Commission to regulate effectively. It said that the funds were "largely one-off" and that the "continuing squeeze on resources" would inhibit the Charity Commission from acting.[90] In its most recent report on the Charity Commission,[91] the NAO reported that, as part of its work to better understand the cost of regulating the sector, the Charity Commission had derived unit costs for its 30 key activities. On the basis of these calculations, it had told the NAO that its 2014-15 budget was sufficient. However, the NAO observed that the current costs were based on the Commission's old regulatory model, and the increase in enforcement activities could alter these calculations. The NAO concluded that, although the Charity Commission had made a start in understanding the cost of regulating the sector effectively, it needed to do further work.

67. There has been much debate about whether the resources available to the Charity Commission are sufficient. The pressure on these resources is unlikely to be eased in the new Parliament, whatever the composition of the Government. It remains the case that the Commission will be unlikely to live up to the increased expectations of it, which include continually improving its non-regulatory functions, without additional resource. Nevertheless, the additional funding for greater digitisation is welcome in that it should free up additional resource for other work.

68. We note the NAO's finding that although the Charity Commission has made a start in understanding the cost of regulating the sector effectively, it needs to do more particularly as regards developing a better understanding of the costs and benefits of effective regulation. Its doing so will be essential if it is to make a persuasive case to Government for any additional resource we suspect it may need.

Joint working with other bodies

69. The Charity Commission does not operate in a regulatory vacuum. In many cases charities will be required to register with other bodies additionally to, or instead of, the Commission and be subject to different forms of oversight (see Box 1 above). More generally, sharing of information with other bodies, particularly those involved in law enforcement, is critical to making best use of the limited resources available to detect, investigate and prevent abuse. All charities (including those that are excepted or exempted) must register with HMRC in order to receive Gift Aid, and as such, data sharing between the Charity Commission and HMRC is particularly important in acting against tax avoidance, evasion and fraud.

70. The NAO found that sharing information with other bodies was one of the "five barriers to effective regulation" by the Charity Commission.[92] We therefore sought to understand whether and how the draft Bill, or concurrent policies, would enable the Charity Commission to achieve the aim of tackling abuse of charity by working with other bodies.

Information sharing with other bodies

71. We were told that a number of separate bodies might receive prima facie evidence of wrongdoing. DCS Nicholson explained that it was crucial to "[share] intelligence at the earliest possible opportunity, regardless of who gathered the intelligence in the first place."[93]

72. Law enforcement bodies from whom we received evidence (Met Police, National Crime Agency, City of London Police, HMRC) were all positive in their assessment of the Charity Commission's cooperation and sharing of information.[94] The additional funding from the Government was particularly welcomed by the City of London Police, who hoped investment into the Charity Commission's IT infrastructure would result in greater detection of fraud. It said that "in about two years the frauds we had in went up from 40 % being cyber-enabled to about 70 %"[95] and that this meant that "the disruption of online bank accounts [and] early intervention"[96] had become more important.

73. Witnesses raised concerns about the working relationship between HMRC and the Charity Commission. The Office of the Scottish Charity Regulator (OSCR) said that although it had "actively developed" memoranda of understanding with a number of organisations, including HMRC, there had been particular challenges to information sharing with HMRC. It said that the key challenges related to HMRC's legislative framework, which limited the information it could share with other bodies. The OSCR said that it was, "currently developing a new MOU with HMRC, but are aware of the possibility that some challenges will remain."[97] A former officer at the Charity Commission said that, in practice, individual HMRC staff at "the coal face" have little or no awareness of the memorandum of understanding.[98]

74. In its 2013 report on the workings of the Charity Commission, the NAO found deficiencies in the information sharing between HMRC and the Charity Commission. It acknowledged that, since taking legal advice, HMRC had revised its memorandum of understanding to enable it to share more information with the Charity Commission.[99] However, in its follow-up report, the NAO observed that in the first-half of 2014-15 the Commission made three times more disclosures to HMRC than it received. HMRC told the NAO that it expects its disclosures to increase in the second-half of the year.[100]

75. We heard from HMRC that the data sharing appeared to have been much improved by taking further legal advice. It said that it was now able to share with the Commission information on whether it regarded the individuals running charities as being "a fit and proper person".[101] This was described by Andrew Edwards, HMRC, as "a big change", which had led to HMRC "prosecuting more cases in recent years than we did in the past" and raising its awareness of fraud, particularly in the area of Gift Aid.[102] The Charity Commission told us that, although the past it had given to HMRC more information than it had received from it, now "there is a much closer working relationship with HMRC."[103]

A single point of registration

76. We were told that HMRC and the Commission are working on a single portal for charities to register and that,

    "That new system will both help weed out inappropriate charities and help us to work together better. In cases where charities are registering with both of us at the same time, we will know about it at the same time and we will get the same information at the same time. We will be able to pass information backwards and forwards before we make a final decision".[104]

77. We heard a clear view from some in the sector that the overall regulatory burden on charities was disproportionate. Sir Stephen Bubb, Chief Executive of ACEVO, told us that:

    "Charities, particularly those involved in delivering public services, are regulated not just by the Charity Commission but by a wide range of bodies. The bureaucracy and red tape involved in that is a cause of concern."[105]

78. The CLA told us that by their nature, trustees are mostly "volunteers and there is a lot of regulation for them to get on top of".[106]

79. Provided the single point of registration does not add unduly to the time taken to register a charity, we consider that it could have significant advantages for all parties involved, particularly well-intentioned but thinly resourced charities. It is regrettable, therefore, that the roll-out of the new system has been delayed until April 2016.[107]

  1. We note the conclusion in the NAO report of 22 January 2015 that while the Commission is exchanging more information with other public bodies "it typically makes twice the number of disclosures [than] it receives".[108] In the modern interconnected world, regulation is a 360 degree matter and it is vital that other public bodies have confidence in the Commission and are as open with it as it is with them.



20   Cabinet Office, Draft Protection of Charities Bill, Cm 8954, October 2014: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/365710/43820_Cm_8954_web_accessible_Draft_protection_of_charities_bill.pdf [accessed 18 February 2015] Back

21   Q 44 (Victoria Keilthy), Q 57 (Sir Stuart Etherington), Q 228 (Richard Corden) and written evidence from the Association of Charitable Foundations (PCB0023), Charity Law Association (PCB0039), Directory of Social Change (PCB0015) and NCVO (PCB0010) Back

22   Q 401 (William Shawcross) Back

23   Q 1 (Ben Harrison) Back

24   Compiled from Charity Commission reports on investigations and compliance case work, 2007-14. See, for example, Charity Commission, Tackling abuse and mismanagement 2013-14 (December 2014): https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/393102/Tackling_abuse_and_mismanagement_2013_14.pdf [accessed 28 January 2015] Back

25   Q 294 (Detective Superintendent Pete O'Doherty) Back

26   IbidBack

27   Q 353 (Andrew Edwards) Back

28   Q 294 (Detective Superintendent Pete O'Doherty) Back

29   Q 374 (Andrew Edwards) Back

30   Written evidence from Office of the Scottish Charity Regulator (OSCR) (PCB0040) Back

31   Written evidence from Joseph Rowntree Charitable Trust (PCB0028) Back

32   Ibid. Back

33   Ibid. Back

34   Written evidence from Bond (PCB0033) Back

35   Q 228 (Sir Stephen Bubb) and Q 51 (Victoria Keilthy) Back

36   Q 1 (Ben Harrison) Back

37   Q 214 (Simon Hebditch) Back

38   Written evidence from NCVO (PCB0010) Back

39   Q 157 (Nicola Evans) Back

40   Q 14 (Ben Harrison) Back

41   HM Government, Tackling extremism in the UK: Report from the Prime Minister's Task Force on Tackling Radicalisation and Extremism (December 2013): https://www.gov.uk/government/uploads/system/uploads/ attachment_data/file/263181/ETF_FINAL.pdf [accessed 28 January 2015] Back

42   QQ 295-296 (Detective Chief Superintendent Terri Nicholson) Back

43   Q 463 (William Shawcross) Back

44   Tim Ross, Robert Mendick and Andrew Gilligan, 'Charity Commission: British charities investigated for terror risks', The Daily Telegraph (1 November 2014): http://www.telegraph.co.uk/news/worldnews/islamic-state/11203569/ Charity-Commission-British-charities-investigated-for-terror-links.html [accessed 28 January 2015] Back

45   See, for example, written evidence from Directory of Social Change (PCB0015) Back

46   Written evidence from Claystone Associates (PCB0004) Back

47   Written evidence from Bond (PCB0033) Back

48   Q 267 (Sir Stephen Bubb) Back

49   Written evidence from Claystone Associates (PCB0004) Back

50   Written evidence from Joseph Rowntree Charitable Trust (PCB0028) Back

51   Q 477 (William Shawcross) Back

52   Ibid. Back

53   Written evidence from Professor Gareth Morgan (PCB0001) Back

54   Q 477 (William Shawcross) Back

55   Q 214 (Simon Hebditch) Back

56   Q 37 (Victoria Keilthy) Back

57   National Audit Office, The Regulatory Effectiveness of the Charity Commission, HC 813, Session 2013-14, (4 December 2013): http://www.nao.org.uk/wp-content/uploads/2013/11/10297-001-Charity-Commission-Book.pdf [accessed 18 February 2015] Back

58   Q 401 (William Shawcross) Back

59   Compiled from Charity Commission reports on investigations and compliance case work, 2007-14. See, for example, Charity Commission, Tackling abuse and mismanagement 2013-14 (December 2014): https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/393102/Tackling_abuse_and_mismanagement_2013_14.pdf [accessed 28 January 2015] Back

60   Written evidence from Charity Commission (PCB0035) Back

61   Written evidence from Wales Council for Voluntary Action (WCVA) (PCB0021) Back

62   Q 98 (Sir Stuart Etherington) Back

63   National Audit Office, Follow-up on the Charity Commission, HC 908, Session 2014-15 (22 January 2015): http://www.nao.org.uk/wp-content/uploads/2015/01/Follow-up-on-the-charity-commission.pdf [accessed 18 February 2015] Back

64   Written evidence from Joseph Rowntree Trust (PCB0028) and Bond (PCB0033) Back

65   Q 403 (William Shawcross) Back

66   Q 489 (Rob Wilson MP) Back

67   Q 58 (Sir Stuart Etherington), See also QQ 217-219 (Simon Hebditch) and Q 124 (Professor Morgan) Back

68   Q 37 (Victoria Keilthy) Back

69   Written evidence from Charity Law Association (PCB0039) Back

70   Q 154 (Jo Coleman) Back

71   Written evidence from Directory of Social Change (PCB0015) Back

72   Q 219 (Simon Hebditch) and written evidence from National Association for Voluntary and Community Action (NAVCA) (PCB0020) Back

73   QQ 404-405 (Michelle Russell) Back

74   Written evidence from Charity Law Association (PCB0039) Back

75   Q 487 (Rob Wilson MP) Back

76   Q 415 (Michelle Russell) Back

77   Written evidence from Charity Law Association (PCB0039) Back

78   Q 122 (Professor Gareth Morgan) Back

79   Q 424 (William Shawcross) Back

80   Q 228 (Sir Stephen Bubb) Back

81   Q 153 (Jo Coleman) Back

82   Charity Commission, Staff structure and salary ranges: http://forms.charitycommission.gov.uk/about-the-commission/freedom-of-information/staff-structure-and-salary-ranges/ [accessed 10 February 2015]  Back

83   Although it was announced that the Commission would receive £8m from HMT's "spend to save" budget, to automate and digitise a number of its systems which would free up staff resource (Q 10 Kenneth Dibble) Back

84   Written evidence from Lord Phillips of Sudbury (PCB0032) Back

85   Ibid. Back

86   Ibid. Back

87   Q 38 (Victoria Keilthy) Back

88   Q 553 (Rob Wilson MP) Back

89   QQ 554-558 (Rob Wilson MP) Back

90   Written evidence from Association of Charitable Foundations (PCB0023) Back

91   National Audit Office, Follow-up on the Charity Commission, HC 908, Session 2014-15 (22 January 2015): http://www.nao.org.uk/wp-content/uploads/2015/01/Follow-up-on-the-charity-commission.pdf [accessed 18 February 2015] Back

92   Q 37 (Victoria Keilthy) Back

93   Q 315 (Detective Chief Superintendent Terri Nicholson) Back

94   Q 297 (Donald Toon), Q 298 (Detective Chief Superintendent Terri Nicholson), Q 300 (Detective Superintendent Pete O'Doherty) and  Q355 (Andrew Edwards) Back

95   Q 300 (Detective Superintendent Pete O'Doherty) Back

96   Ibid. Back

97   Written evidence from the Office of the Scottish Charity Regulator (OSCR) (PCB0040) Back

98   Written evidence from David Orbison (PCB0014) Back

99   National Audit Office, The Regulatory Effectiveness of the Charity Commission, HC 813, Session 2013-14, (4 December 2013): http://www.nao.org.uk/wp-content/uploads/2013/11/10297-001-Charity-Commission-Book.pdf [accessed 18 February 2015] Back

100   National Audit Office, Follow-up on the Charity Commission, HC 908, Session 2014-15 (22 January 2015): http://www.nao.org.uk/wp-content/uploads/2015/01/Follow-up-on-the-charity-commission.pdf [accessed 18 February 2015] Back

101   Q 356 (Andrew Edwards) Back

102   QQ 356-357 (Andrew Edwards) Back

103   Q 423 (Michelle Russell) Back

104   Q 377 (Andrew Edwards) Back

105   Q 231 (Sir Stephen Bubb) Back

106   Q 153 (Jo Coleman) Back

107   David Ainsworth, 'Joint registration system between Charity Commission and HMRC delayed', Civil Society, (27 November 2014): http://www.civilsociety.co.uk/governance/news/content/18661/joint_registration_between_charity_commission_and_hmrc_delayed [accessed 2 February 2015] and Q 377 (Andrew Edwards) Back

108   National Audit Office, Follow-up on the Charity Commission, HC 908, Session 2014-15 (22 January 2015): http://www.nao.org.uk/wp-content/uploads/2015/01/Follow-up-on-the-charity-commission.pdf [accessed 18 February 2015] Back


 
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Prepared 25 February 2015