The Public Administration Select Committee has supported Lord Hodgson's recommendation to fine charities that submit their annual returns late to the Charity Commission, in its report into the efficacy of the Charities Act 2006.

It does not, however, support his recommendation to charge for submitting the returns, which would be too expensive to get off the ground, the committee advised in its report published today. A fines system would be much less costly and the income generated "would not constitute a conflict of interest", it adds. 

Charities submitting annual returns late "is a risk to public trust in the charitable sector", said the Committee, chaired by Bernard Jenkin MP. "Members of the public wishing to make a charitable donation should have up-to-date information, proportionate to the size of that organisation, on the charity's income and expenditure in order to make an informed choice about their donation," it adds.

The Committee recommended that the Charity Commission works with the Cabinet Office to develop a "proportionate and flexible system of fines". 

In agreement with another of Lord Hodgson's recommendations the Committee adds that charities which are also companies should not have to submit seperate returns to the Charity Commission and to Companies House. It calls for the two organisations to agree what information is needed to satisfy both of their requirements as "a priority".

Passporting system

The PASC also said there were benefits to be had from streamlining the regulatory requirements of the separate country jurisdictions, and recommended a passporting system for charity regulation.

"We call on the Cabinet Office and the Charity Commission and the equivalent bodies in Scotland and Northern Ireland, to renew efforts to achieve this."

The PASC's investigation into the Charities Act 2006 began in August last year and follows the independent evaluation undertaken by Lord Hodgson. Hodgson's review was stipulated in the Act itself, which required that it be assessed five years after implementation. 

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