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

6  Reporting, Reviews and Appeals

271. This Chapter briefly considers three relatively uncontroversial clauses which cover the recording of disqualifications and removal by the Charity Commission (clause 10), preventing disqualified individuals from participating in a charity's governance as part of a corporate trustee (clause 11) and the arrangements in the draft Bill for its review (clause 12). It also examines an issue relating to appeals against decisions made by the Commission.

Records of disqualification and removal (clause 10)

272. Clause 10 of the draft Bill would update the Charity Commission's requirement to maintain a register of all persons disqualified by the Commission.

273. Witnesses told the Committee that this additional transparency would be valuable and that it was important that the register was updated frequently.[315] The NCVO noted that in the process of maintaining the list it was important to guard against defamation.[316]

274. We support the inclusion of clause 10.

Participation in corporate decisions while disqualified (clause 11)

275. Clause 11 of the draft Bill would amend the Charities Act 2011 to prevent a disqualified person who is director of a corporate trustee of a charity from participating in decisions about the charity's affairs.

276. This provision seeks to close a loophole which otherwise allowed a disqualified individual from participating in the corporate decisions of a charity. The evidence received by the Committee was supportive of the amendment.[317]

277. We support the inclusion of clause 11.

Reviews of the operation of the Act (clause 12)

278. Clause 12 of the draft Bill would require the Minister for the Cabinet Office to carry out reviews of the operation of the Act within five years of its passing and every five years subsequently.

279. NAVCA welcomed this provision as an "opportunity to assess the actual implementation and effect of the powers".[318] The NCVO also supported the proposal, but suggested that after the first review the Minister could decide whether further reviews were necessary or not.[319]

280. Other witnesses suggested that it would make more sense to have a wider review of charities legislation rather than look solely at the effects of the powers in this Bill. Professor Morgan proposed a five-yearly review of all charity legislation, similar to the provision in the Charities Act 2006 that led to the review by Lord Hodgson of Astley Abbotts,[320] while the Charity Finance Group suggested a review of the 2011 Act by 2020.[321]

281. We agree that a wider review of charity legislation would be more valuable than a narrow review focussing solely on the provisions of this Bill. The timing of the review should take into account the passage of this Bill, assuming it is introduced in the new Parliament, and the implementation of any reforms based on the Law Commission's ongoing charity law project.[322]

Appeals against decisions of the Charity Commission

282. The Charity Commission said in its evidence that "some appeals to the tribunal are mischievous or a delaying tactic" which were used to "frustrate the Commission in getting on with its investigation."[323]

283. The Committee has considered a variety of ways this could be addressed, including whether the opening of a statutory inquiry under s46 of the Charities Act 2011 should be appealable to the First Tier Tribunal (Charity), on the basis that the powers available to the Commission as part of an inquiry could all be appealed if they were used subsequently. Taking into account our view that a statutory warning from the Commission should not be appealable to the Tribunal, we believe that it would be sensible for the opening of a statutory inquiry to remain appealable. The Charity Commission and the Government, in consultation with the Charity Tribunal, may nevertheless wish to look at the issue of tactical appeals in more detail in due course to see whether it can be alleviated.

284. We were particularly grateful to Alison McKenna, Principal Judge of the First-tier Tribunal (Charity) for her helpful response to a number of questions which we asked her about the operation of the current system of appeals. Among other things, she commented on the "considerable confusion amongst the Tribunal's users" caused by the current format of Schedule 6 to the 2011 Act. Because trustees may well not understand which section of that Act has been relied upon by the Commission for it to have made its decision, it is often left to the Tribunal's administrative staff to try to determine whether there is any basis for the Commission's decisions to be within its jurisdiction.[324] We note that the Law Commission's forthcoming work on charity law includes "certain powers" of the Charity Tribunal.[325] Although its terms of reference do not include Schedule 6 to the 2011 Act, we suggest that greater clarity over the formulation of Schedule 6 should be a part of its work in due course.

315   Written evidence from Office of the Scottish Charity Regulator (OSCR) (PCB0040), Directory of Social Change (PCB0015) and Muslim Charities Forum (PCB0029) Back

316   Written evidence from NCVO (PCB0010) Back

317   Written evidence from Professor Gareth Morgan (PCB0001), NCVO (PCB0010), and Charity Commission for Northern Ireland (PCB0030) Back

318   Written evidence from National Association for Voluntary and Community Action (NAVCA) (PCB0020) Back

319   Written evidence from NCVO (PCB0010) Back

320   Written evidence from Professor Gareth Morgan (PCB0001) Back

321   Written evidence from Charity Finance Group (PCB0034) Back

322   Written evidence from Law Commission for England and Wales (PCB0027) Back

323   Q 483 (William Shawcross) Back

324   Letter from Judge McKenna to the Chairman, 19 January 2015, Appendix 5 Back

325   Written evidence from Law Commission for England and Wales (PCB0027) Back

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Prepared 25 February 2015