MPs have voted to remove a clause from the Charities Bill that had been introduced to block the government's plans to extend right to buy to charitable housing associations.

Clause 9, which states "charities are not compelled to use or dispose of their assets in a way which is inconsistent with their charitable purposes" was introduced to the Charities (Protection and Social Investment) Bill, by the Lords in the summer.

But yesterday, during the committee stage of the bill, Conservative MPs voted to remove the clause, while Labour MPs argued that it should have stayed.

Speaking at the committee stage yesterday, Rob Wilson, minister for civil society, argued that the clause would place additional strain on the Charity Commission “at a time of very limited resources”.

“The clause gives the Charity Commission a new and wide-ranging role in policing the use and disposal of charity assets that is inconsistent with our aim of helping the commission to focus on its core regulatory responsibilities,” Wilson said.

“Requiring the Commission to ensure that charities are not required to use or dispose of assets would be more than just an unwelcome distraction for the regulator at a time of very limited resources.”

But shadow minister for civil society, Anna Turley, said the clause was “extremely important” in enabling charitable housing associations to maintain their assets.

“The clause simply and effectively states the existing legal position and supports trustees in their existing duties by ensuring that they are able to adhere to their charitable aims and objectives, and it protects them from being compelled to undertake an action that is at odds with their charitable purposes,” she said.

Turley said she was “surprised” the government was “persisting in trying to remove the clause”.

“The opposition are not against the right to buy,” she said. “Indeed, we want those who desire to be homeowners to achieve that.

"However, the problem is compulsion. We want to limit the power of the government to direct a charity against its independent will, and contrary to its charitable purposes, to dispose of its assets according to the government’s latest whim. That is an infringement of the independence of charity, community and voluntary sector organisations. For many housing associations, it will go against the grain of their aims and objectives,” Turley said.

The shadow charities minister said the clause was based on a “principle broader than simply housing”.

“What after housing might be next on the government’s list in requiring charities to purge themselves of their assets?” she asked.

Turley also rejected claims that the clause would be burdensome for the Charity Commission.

“I totally understand that [the Charity Commission] did not ask specifically for the clause, but the bill was not drafted for the Charity Commission or by it,” she said. “It was drafted in the best interests of the charitable sector to support its independence and to provide it with a secure regulatory framework in the future. There will be areas where the Charity Commission agrees with us and others where it does not, but we do not believe that the clause is burdensome for it. It is part of its role in defending the integrity of the charitable status.”

The government and National Housing Federation announced a deal that would see charitable housing associations deliver the right-to-buy initiative on a voluntary basis, at the end of last year.

Fundraising transparency

MPs also discussed clause 14 of the charities bill, which requires greater transparency by charities around their fundraising methods. And they agreed that it should remain part of the bill.  

Wilson said the clause was added in an attempt to avert future fundraising scandals like the Olive Cooke affair.

“These provisions were added to the bill following a series of media exposés of poor fundraising practices in which elderly and vulnerable people were targeted by charities or subjected to undue pressure to donate," he said. "Many of those poor practices are completely and utterly unacceptable.”

The transparency clause was welcomed by Turley who said she “tabled no amendments”.

Disqualification of trustees

During the discussion about the implementation of new powers for the Charity Commission to disqualify trustees (clause 10) Wilson confirmed that no additional funding would be made available to the regulator to support this. 

Wilson said clause 10 would “help to protect charities from terrorist or extremist abuse” and would also apply to trustees convicted of money-laundering offences and contempt of court.

“It is right that the Charity Commission looks beyond the benefits for the individual and considers the risks and benefits involved not only for any charity directly concerned, but for charities generally,” Wilson said.

“The proposed disqualification powers will protect charities from individuals who present a known risk, while providing for the rehabilitation of offenders and a way back into charity trusteeship on a case-by-case basis. That strikes me as a fair and proportionate system.”

Turley said the clause was supported by Labour and had no amendments to suggest.

But she said “some issues remain to be ironed out”, including its impact on the charity sector’s work in rehabilitating ex-offenders and their career prospects and long-term resettlement.

Labour MP for Cardiff Central, Jo Stevens, also questioned the clause’s impact on offender rehabilitation programmes.

“At a time when the prison population continues to grow and the fragmentation of the probation service, post-privatisation, is seeing some private providers cutting jobs in probation by more than 40 per cent, the rehabilitation of ex-offenders is more important than ever, and the pressure on charities working in this strand of the sector will be increasing all the time," Stevens said.

"Rehabilitation and reducing re-offending rates must remain a priority for the government, and the work that charities such as the Prison Reform Trust and Unlock do, is critical to this. Those charities have expressed concern about the waiver process and the impact it will have. I share many of those concerns.”

“Instead of seeking to narrow opportunities for ex-offenders to reintegrate and contribute to society, we should be supporting their efforts to contribute to civil society, both through paid employment in the voluntary sector and as volunteers,” she said.

Stevens also questioned whether greater resources would be given to the Commission to implement clause 10.

Wilson replied: “To respond to the question about what additional resources will be available for the Charity Commission, the simple answer is none.”