Public benefit amendment divides opinion again

Finance | Ian Allsop | 1 Sep 2006

The latest public benefit test amendment to the Charities Bill, which is set to be considered in the Commons in October, has been met with a mixed reception.

NCVO has said the amendment will help charities to understand how to meet the public benefit requirement. However, Judith Hill of the Charity Law Commission (CLA), has written to minister for the third sector, Ed Miliband stating that common law already states that charities can only be registered if they can demonstrate public benefit.

Stuart Etherington, chief executive at NCVO, said: "NCVO believes that further amendment to the Charities Bill is needed to ensure that there is clarity with regard to the application of public benefit. We welcome this amendment, as it would give this clarity. We hope that the government accepts this amendment or comes forward with its own amendment, agreed with the Charity Commission. This would ensure that the Bill really does put public benefit at the heart of charity law."

But in a letter written on behalf of the CLA to Miliband, Hill, partner at Farrer & Co, said: "The proposed amendment is... quite clearly, another attempt to ensure that charities that charge fees for their services which restrict the availability of those services do not pass the public benefit test. I would simply reiterate that the law already provides for this in so far as such fees restrict the availability to a class which is too small to qualify as 'the public' for this purpose, so that this clause would not add anything. As with other clauses tabled on this subject, it would, rather, detract from the common law public benefit test on which we currently rely. The recommendation of the CLA is to resist this amendment, and any other like it."

Jonathan Burchfield, partner at Stone King solicitors, said he expected the Bill to go through its remaining stages by November. "If all goes well, we are looking at a new Act this November, but parts of the Act will not be introduced straight away. They will be coming through piecemeal."

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