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Charities, Social Enterprises and Voluntary Organisations

Volume 789: debated on Tuesday 20 February 2018


Asked by

To ask Her Majesty’s Government whether they have plans to improve the regulation of charities, social enterprises, and voluntary organisations.

My Lords, the Charity Commission was recognised by the National Audit Office in November last year for making significant progress in improving its regulatory effectiveness. Additional funding of £5 million per year for the Charity Commission was announced in January, as was the preferred candidate for its chair, my noble friend Lady Stowell. The Charity Commission has been clear that safeguarding is a key governance priority. In response to recent safeguarding revelations, the commission has announced a number of measures to ensure that charities learn the wider lessons and that trustees strengthen their own safeguarding arrangements.

I thank the Minister for that Answer. Perhaps more than ever, we need a Charity Commission that is strong, effective and respected by all charities, big and small. Yet for the second time, the Government have nominated as its chair someone who has no noted experience of charities and no noted experience of regulation. Does the Minister agree that to safeguard the independence and authority of the commission, there now needs to be a depoliticisation of the appointment process?

My Lords, the appointment process is a fair and open recruitment process, in line with the Government’s code for public appointments and regulated by the Commissioner for Public Appointments, so there are no plans to change the process. My noble friend Lady Stowell has already said that if she is appointed as the chair, she will renounce her party membership and move to the Cross Benches. She is well aware of what it takes to be impartial and I am sure she will do a good job, as has been said by many people in the charity sector.

My Lords, while I am sure the Minister will wish to pay tribute to the retiring head of the Charity Commission, William Shawcross, he might be minded to take note of his final comment that some of the huge NGOs now hire extremely expensive lawyers to combat the good advice that they receive from the Charity Commission. Perhaps he might consider fining or getting some reimbursement from those enormous NGOs to heighten the Charity Commissioners’ rather slender budget, as William Shawcross recommended.

My Lords, the subject of charging for the Charity Commission to enable it to be sustainable is an open question and it will consult on that. I realise that there is an issue of principle here but my noble friend is right that some of these very large charities have considerable means. The suggestion on which the Charity Commission will consult is that only those charities with incomes of over £5 million will be involved. I think that would be about 2,000 charities out of about 168,000 registered charities.

My Lords, we all know that charities have to be regulated in accordance with charity law, but will the Government resist proposals for including social enterprises and voluntary organisations in any enhanced regulation? Surely the variety within civil society, and its constantly branching out into new and creative directions, is a national asset and should be left alone.

My Lords, I agree with the noble Lord. I do not think there is any suggestion of further regulation of civil society, as such, but we expect all organisations which deal with the public to obey the law. That includes charities but also all civil society. It is one thing that can be considered in the new consultation on the civil society strategy that we are going to launch soon.

My Lords, I am grateful to the noble Lord for bringing to our attention the connection between the activities of the Charity Commission and bodies like it and recent incidents of which we are all too well aware. I have long and profound experience of Haiti and could make my question centre on that, but that is not where the Question laid before us is. Granted, in times of heightened anxiety, such as this, we are all tempted to put regulatory strangleholds on those at the top, whether an NGO, the Charity Commission or even the Government. However, is not the best way of ensuring improvement—so that these things do not happen again—to have adequate procedures as near to the place where these incidents happen as possible, and proper ways of monitoring those activities? Is that not better than finding other rules and regulations simply at the top?

My Lords, there is lot of sense in what the noble Lord said. One of the things we want to do is to strike a balance. We should remember that all these organisations do good work; that is what they are in business for. We have to be careful about things such as safeguarding. I take the noble Lord’s point about making it near the action, as it were. One thing we are doing is convening two summits, one to focus on international aid charities, which will be jointly chaired by the Secretary of State for International Development, and another, chaired by the Minister for Sport and Civil Society, to concentrate on domestic charities, to look at what we can do to strengthen the safeguarding capability and capacity of charities working across that area. The fact remains that charities and organisations like them do good work on the ground.

My Lords, charities are affected not just by regulation but by policy developments. Will the Minister say whether there is a protocol across government to investigate how new policy developments impact on charities and their ability to do their work?

I do not know whether there is a protocol but the Minister for Sport and Civil Society is the focus for work in policy areas that go across government. We are currently working closely with, for example, the Department for Education and the Department for International Development to make sure that policy development is joined up. The Office for Civil Society, which is based at DCMS, is the focus for that.

My Lords, does the Minister agree that the Charity Commission should have powers to require charities to have clear lines of accountability and to be transparent, not only in how they spend their money but in how they handle their staffing issues?

Yes, one of the issues is the Charity Commission having sufficient resources, not only for regulatory functions but for advice functions. Increasingly, the charitable sector is asking for advice from the Charity Commission and we have to find a sustainable way for it to do that.