Acevo chief executive Sir Stephen Bubb has criticised today’s Public Administration Select Committee inquiry into the Charities Act 2006, saying that it proposes adding bureaucratic burdens to charities which should be left to get on with their missions.
The PASC has today released The role of the Charity Commission and “public benefit”: Postlegislative scrutiny of the Charities Act 2006, which follows on from Lord Hodgson’s review of the Act last year.
And Sir Stephen has been quick to attack the 78-page document, saying that it is “regulatory madness” which the government should reject. He specifically targets its recommendation that public benefit be redefined and that charities should publish how much they spend on campaigning.
"This is a bad report,” Sir Stephen said. “It is an unhelpful and unnecessary distraction, at a time when charities need distraction like a hole in the head.
"The problem of a few charities struggling with the public benefit test is not a nut that needs cracking with new legislation and an orgy of parliamentary debate as to how charities should be regulated.
“What we need is for the Charity Commission to get its act together and be given the resources to do its job, not politicians meddling in how charities are defined and run. Charities need to be left to get on with the job, not distracted by MPs determined to open Pandora's box and redraw the line on what is considered charitable.”
Sir Stephen insisted that only “a tiny number” of charities have struggled with the public benefit test, and called the PASC’s proposal to force charities to account for how many hours they spend on campaigning “an entirely unnecessary piece of red tape at a time when charities are struggling quite enough as it is”.
The Acevo CEO continued: “The Committee presents no evidence that the extra bureaucracy is needed, beyond the views of an individual witness whose motives the committee questions in its own report.
"The report’s own evidence shows that while 1.1 per cent of the public say their trust in charity has reduced in the last two years because of campaigning activity, 67 per cent think charities should be able to campaign on the causes they represent. So the proposal is entirely without foundation and would impose a regulatory burden that would mean more donations being spent on bureaucracy, and less on good causes.”
Etherington: public benefit does need to be clarified
In contrast, Sir Stuart Etherington, chief executive of NCVO, has responded amicably to the report, agreeing that the definition of public benefit should be clarified and that this should be tackled at a Parliamentary level.
“This welcome report provides much food for thought,” Sir Stuart said. “The Committee rightly says that clarity is needed in the complex area of what constitutes public benefit. The most sensible way to achieve this would be for Parliament to set out high-level principles.
“Organisations should continue to show how they provide public benefit when they register as charities, and the Commission could refer to the principles in deciding on individual cases.
“It’s right that charities be as open as possible about how they spend money and what their priorities are – as many already are – so the public can best decide which charities to support.”
Sir Stuart also said that he agreed with the PASC that the Charity Commission should focus its resources on the regulation of charities and preventing the rare cases of abuse, and further reductions to the regulator's budget would risk weakening its ability to fulfil this role.
“A strong, independent Charity Commission is a crucial element in maintaining public trust in charities,” he said.
Charity Commission chair welcomes report
William Shawcross, Charity Commission chair, welcomed the "thoughtful, balanced, well-informed and helpful" report and particularly the Committee's recognition of the scale of the task of producing public benefit guidance.
He said: "The Committee recognises that our core duty is to regulate the charitable sector. We have concentrated on regulation since implementing our strategic review in 2011. Moreover, our new board was specifically chosen with a view to strengthening our regulatory experience.
"We note that the report says that 'the 2006 Act represented an ambition which the Commission could never fulfil, even before budget cuts were initiated'.
"We also note that the Committee is clear that it is the role of HMRC and not the Commission to investigate potential tax fraud."
He added that the Commission would respond more fully in due course.
More on the PASC report:
Public benefit test is critically flawed, MPs tell government
PASC criticises Charity Tribunal system
PASC puts fundraising self-regulation ‘on notice’
PASC supports Hodgson recommendation to fine late filers
PASC: Charities should publish lobbying spend and public income in annual returns
Commission should review its handling of the Cup Trust case, say MPs
