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Acts of union

Finance | 1 Sep 2005

One aspect of devolution has been how Scotland has taken a strong lead on certain policy issues. A good example of this is the Scottish Executive's decision on a blanket ban on smoking in public places, announced last year, and due to be introduced next spring.

Similar proposals have been unveiled in England but they don't go so far, for example, smoking will still be allowed in pubs which limit their food sales to snacks. Sound familiar? When it comes to updating arcane charity legislation, Scotland has been the first to turn a Bill into an Act. While the Bill in Westminster will finish up looking pretty much the same, at this stage it still looks unlikely that England and Wales will have a statutory definition of public benefit to match the bolder move north of the border.

The arguments are well rehearsed, and there are obvious concerns about whether existing case law which, as things stand, is how the Charity Commission will be left to determine public benefit, will actually result in any fee charging charities failing the all important test. Many would say this defeats the whole object of having it in the first place.

There are potential problems of having contrasting regulatory environments and legislation and it would be wrong for English charities to assume that they are not affected by law dispensed from Holyrood if they undertake activities in Scotland. Equally, while the Sorp on the surface looks like it only applies to England and Wales, it is applicable in Scotland.

The Charity Commission and OSCR have announced the grand sounding memorandum of understanding to promote more efficient working between the two regimes and it is to be sincerely hoped it is effective in practice. It is surely in the best interest of the charity sector as a whole in the UK if there is as much consistency of regulation as possible. Which is why it will be fascinating to see if the august figures shaping the future of charity law in Westminster will be as brave as their Scottish counterparts on the public benefit issue. And for a more rational reason than satisfying the political whims of Labour backbenchers with a bee in their bonnets about independent schools.

Counting the costs?

Just when it seemed there was enough red tape for charities to contend with, particularly ones running shops, more concerns have appeared on the horizon with product safety legislation and the WEEE directive. This legislative burden is one reason attributed to the big increase in costs for charities in our shops survey this year, which reports a slight drop in profits despite a fairly respectable increase in sales figures.

Other factors being blamed include the reduction in quality of goods coming into the shops as the discount retailers on the high street sell affordable but short life products, and the eBay effect, whereby a supposed legion of would be donors are selling their precious bric-a-brac for personal gain.

These are valid concerns and possible reasons for costs rising. However, it is important that shops don't seek easy scapegoats but instead concentrate on finding innovative solutions. This could include establishing specialist stores and loyalty card schemes, and looking at the opportunities offered by eBay for charities selling goods to a wider audience, while still focusing on maintaining their unique values on the high street.

Sadly, it is easier in reality for the bigger chains to do this. The smaller chains with strong local appeal, and hospices, will probably survive. However, the results this year only confirm fears that ultimately it will be the medium sized chains that do not or cannot keep up who will be squeezed out.

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Directory: Charity Commission | Office of the Scottish Charity Regulator (OSCR)