Charity Finance editor and former Charity Commission chief executive, Andrew Hind offers his analysis of yesterday's PASC report. 

"All the world's a stage, And all the men and women merely players:
They have their exits and their entrances; And one man in his time plays many parts.”

So wrote William Shakespeare in one of his most famous monologues, in As You Like It, which he penned in 1600.  

I was reminded of these lines yesterday when Bernard Jenkin MP took to the stage as the latest in the line of Parliamentarians who have been offering their views about the future of charity regulation over recent weeks.  

Jenkin made his entrance into the spotlight in his capacity as chairman of the Public Administration Select Committee which published its post-legislative scrutiny report of the Charities Act 2006 and the role of the Charity Commission.

The report contains some sensible recommendations worthy of support; not least its encouragement of a system allowing the Commission to fine charities which are late filing their accounts.  But in several areas Jenkin’s committee seriously misunderstands the vital role played by charities in our country and the factors which drive public trust and confidence in the sector.

Its very worrying suggestion that charities should be required to publish their expenditure on campaigning and political work in their annual returns can surely be seen as nothing more than a thinly-veiled threat that charities are there purely to deliver services, and not to upset ministers by campaigning on issues related to their charitable objectives.  What an absurd take that is on the role of civil society organisations in a sophisticated democracy.

Repealing public benefit clauses would be a serious mistake

Even more ill-informed is the recommendation that the public benefit clauses of the 2006 Act should be repealed and that the presumption that public benefit is delivered by charities advancing education and religion and relieving poverty be re-established.

Many thousands of words have been written over the last seven years about how much better it would have been if Parliament had defined public benefit on the face of the 2006 Act as has been successfully done in Scotland.  It is certainly very unfortunate that Prime Minister Blair appears to have been the key figure in ensuring that the historic opportunity to do that was missed back in 2006.

But let’s be clear.  An Act with an ill-defined public benefit test included in it is infinitely preferable to an Act with no public benefit test at all.  If Jenkin and his colleagues get their way we will be back to the bad old days when it was simply presumed that great swathes of the sector are operating for public benefit unless and until proved otherwise.  

At a time when public trust in many sectors of society is in steep decline, it is essential that the public understand clearly what charities stand for and why they deserve support.  That was the fundamental reason behind dropping the presumption and introducing the public benefit test in the 2006 Act.

Sir Stephen Bubb was right yesterday when he said “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”.

The fact is that very few charities have had any difficulty with the new public benefit clauses.  Indeed, up and down the country, trustee boards have found the renewed emphasis they are required to put on public benefit reporting in their annual reports to be a helpful way of focusing on their core charitable purposes.

The small number of independent charitable schools and religious organisations that have had trouble with the new public benefit test have in fact contributed, and are contributing, to the much-needed development of charity law in this area.

So I earnestly hope that Nick Hurd and his government colleagues will have the wisdom to let Bernard Jenkin and the PASC have their hour on stage and then bring the curtain down on this dangerous and ill-informed suggestion. The presumption of public benefit was introduced by the Statute of Elizabeth in 1601.  Shakespeare had just finished As You Like It.  It took us until 2006 to see sense and drop the presumption.  PASC must not be allowed to take us back 400 years, no matter how interesting it would be to see Shakespeare in his prime.