PASC report on Charities Act 2006

At the beginning of June, the Commons Public Administration Select Committee (PASC) published its report, The role of the Charity Commission and “public benefit”: Post-legislative scrutiny of the Charities Act 2006.

The Report is PASC’s response to Lord Hodgson’s report on the Charities Act 2006. PASC also took the opportunity to respond to other developments in the regulation of the charitable sector including the decision of the Upper Tier Tribunal in the Independent Schools case; the refusal to register the Exclusive Brethren’s Preston Down Trust, as well as continuing public concern about ‘chuggers’.

PASC concluded that:

• the public benefit test is “critically flawed” and the Charity Commission’s interpretation of it has been disruptive (though it did accept that it is for Parliament to resolve the issues of the criteria for charitable status and public benefit – not the Commission);
• the Government should revise the statutory objectives for the Charity Commission, to allow the Commission to focus its limited resources on regulating the sector;
• the proposal to increase the financial threshold for compulsory registration of a charity with the Charity Commission (to £25,000) should be rejected; the Charity Commission’s reliance on the Charity Tribunal to resolve contentious areas of law has been expensive, time-consuming and an unjust way to test the law;
• the Charity Commission should not charge for registration of new charities or the submission of annual returns (though there may be a case for charges on late filing);
• charitable companies should not have to file returns with Companies House and the Charity Commission;
• there should be no automatic right to pay trustees; – the self-regulation of fundraising should be placed ‘on notice’ to improve performance;
• charities should publish their spending on campaigning and political activity.

PASC said that its recommendations were made with the objective of increasing public trust in charities, while reflecting this changed economic and political climate. The Government is expected to respond by the Autumn. Read the full report.

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