Official warnings give too much power to Charity Commission, CLA to warn

30 Nov 2015 News

The Charity Law Association is to propose eight amendments to the Charities Bill to reduce the scope of proposed powers for the Charity Commission, especially the power to issue official warnings.

The Charity Law Association has proposed eight amendments to the Charities Bill to reduce the scope of proposed powers for the Charity Commission, especially the power to issue official warnings.

The Charities (Protection and Social Investment) Bill has its second reading in the House of Commons later this week. It will give greater powers to the Charity Commission and also includes measures on social investment and fundraising.

The CLA believes that at present the scope of the proposed power to give warnings is far too wide, and gives the Commission too much authority. The Charity Finance Group and NCVO are also understood to have also expressed concerns about the scope of the power.

All three bodies are expected to submit briefings later this week, calling for the bill to include greater restrictions on the Commission’s powers.

The CLA has warned that at present the Commission could warn any charity, at 24 hours’ notice, with no right of appeal, and name them publicly. The charity would be required to remedy the shortcomings named in the warning even if it did not agree that its actions were wrong.

It believes that these powers are unfairly broad, given the potentially serious reputational implications for charities.

It is expected to propose that the Commission should have to give at least a month’s notice, that the warning process should be subject to appeal to the Charity Tribunal, and that warnings should only be made public with the name of the charity.

It will also call for changes on the face of the bill to make it clear that the Commission cannot “fetter trustees’ exercise of discretion for all time” – a phrase used recently after the Commission agreed it could not stop the Joseph Rowntree Charitable Trust making grants to Cage, an advocacy group which has in the past appeared to side with terrorists.

The CLA said it had no opposition to the principle of issuing statutory warnings.

The CLA is also expected to call for further restrictions to other powers in the bill, including those giving more scope to disqualify trustees, and the right to direct charities not to take a particular action.

The bill is expected to be amended further, later this week, to include reserve powers to force charities to obey and fund a new fundraising regulator.

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