Yesterday, the government published its response to the Hodgson review of the Charities Act and the Public Administration Select Committee's post-legislative scrutiny report. Here's Vibeka Mair's two-minute summary of key changes.
1) More pressure to get accounts in on time
Government will look into a system of fines for charities that file their accounts late.
2) More scrutiny of charity campaigning and charities' relationship with the state
Government supports in principle the idea that charities should be required by law to declare how much of their spending has gone on political and communications work and how much of their funds they got from government.
3) New regulator for housing associations
The government has backed Lord Hodgson’s recommendation that the Homes and Communities Agency should be the principal regulator of housing associations, instead of the Charity Commission.
4) Audit threshold rises
Government partially supports a recommendation from Lord Hodgson to increase the income threshold for a full audit from £500,000 to £1m.
5) Lighter regulatory burden
Government supports a single registration and filing system for charities between the Charity Commission and HMRC.
6) Some support for social investment
Government will work to develop a standard social investment vehicle which will allow investment from different sources, which might have different legal and tax treatments; and it will see if the Law Commission will undertake a review of issues relating to social investment by charity trustees.
What the government won’t do
- Devise a statutory definition of public benefit
- Make it easier for charities to pay their trustees
- Scrap National Exemption Orders
- Introduce a charity ombudsman
- Raise the threshold for compulsory registration with the Charity Commission to £25,000
- Charge charities for registration with the Charity Commission
What it might do
The government will persist with self-regulation of fundraising, but will review in 2017.
Progress report in one year
The government pledged to report back to both Lord Hodgson and PASC in a year’s time on progress made in implementing the recommendations that it has accepted.
