COMMITTEE FOR SOCIAL DEVELOPMENT

OFFICIAL REPORT

(Hansard)

Charities Bill

31 January 2008

Members present for all or part of the proceedings:
Mr Gregory Campbell (Chairperson)
Mr David Hilditch (Deputy Chairperson)
Mr Mickey Brady
Mr Fred Cobain
Mr Jonathan Craig
Ms Anna Lo
Mr Fra McCann
Mrs Claire McGill
Mr Alban Maginness

Witnesses:
Mrs Denise Hayward ) Volunteer Development Agency
Mrs Wendy Osborne )

The Chairperson (Mr Campbell):
I welcome Wendy Osborne and Denise Hayward from the Volunteer Development Agency. The usual format is that you make a brief submission, followed by questions from members. If you are content, we shall begin.

Mrs Wendy Osborne (Volunteer Development Agency):
Thank you for the opportunity to give evidence on the Charities Bill. The Volunteer Development Agency’s role is to promote and develop volunteering to build stronger communities. At the heart of that, its role is to encourage people to participate. We base our submission on the fact that the charitable sector in Northern Ireland is made up of small organisations — 78·5% of which have an income of less than £100,000 per annum. The majority of those organisations are wholly dependent on volunteers. In fact, over 27,000 volunteers are involved in voluntary management committees.

The Bill is about regulating the organisation of charities. However, people get involved in charity work because they are committed to a cause, and they want to make a difference. The Committee and the Assembly should hold fast to that. We want to keep people’s involvement in, and public participation in, community life. We would like the legislation to say something about the value of the charity sector, understanding that it enables people to get involved. It contributes quite a bit to the quality of life in Northern Ireland, and that is important. That should be the context in which the legislation is set.

The Bill is about individuals, particularly about volunteers who sit on voluntary management committees. It says nothing about the responsibilities of paid staff: it is about the responsibility of the trustees, who are voluntary members. It would be useful to have the legislation amended to include a wider definition of the trustee and the trustee’s role. At present, it has only one line; whereas the trustee has a key role.

That leads us to an important point about proportionality. The charitable sector is led by and mainly involves volunteers. It is made up, for the most part, of small organisations. Bureaucracy, proportionality and the standards that might be expected of such organisations are important issues. Although we are delighted that, on the issue of financial accountability, the legislation looks at smaller levels of funding in relation to smaller organisations, it must be strong in what it says about proportionality in the provision of annual-accounts information. The bottom line is that the Volunteer Development Agency does not want to see the legislation create barriers to people wanting to get involved. That is where proportionality comes into play.

Mrs Hayward (Volunteer Development Agency):
I want to say something about resources and accountability in relation to the charity commission. Its work will be varied, and it will have wide-ranging powers. We are concerned that the commission should be well resourced to ensure that things are not slowed up — for example, the issue of permits for collections. Such things must be managed effectively, in order not to create a barrier to charities doing their ordinary, everyday business.

Volunteers on management committees need support. They give up their time to serve communities by sitting on voluntary management boards. We want to ensure that those volunteers have sufficient support to be able to adhere to the new legislation and to abide by it. There must be clarity between the role of the charity commission in providing support and guidance and that of the voluntary and community sector in doing that. Both parties must be well resourced in order to do that.

With regard to accountability, we consider that the draft legislation that was put out for consultation was clearer. It required all charities to register. There has been a slight change in the wording of that, as we have stated in our submission. It might be better if all charities established in law, and/or operating in Northern Ireland, had to register with the commission.

On the public benefit test, the onus should be on the commission to consult with the sector, and more widely. It is one of the most important parts of the legislation. The commission should not just be able to issue guidance without consultation.

Scrutiny of the work of the charity commission is a big issue. It is important that this Committee scrutinises the proposed legislation at this stage. Further down the line, however, we need to ensure that the commission’s activities do not have a negative impact on the sector or on volunteering, as outlined in the compact. We would like to see further scrutiny of its activities either by the Executive or by this Committee.

The Chairperson:
Thank you for that. You seem to have some concerns about the definition of amateur sport in Northern Ireland. Would you care to elaborate?

Mrs Osborne:
The definition of sport has changed in the new legislation. It is now tied tightly into the promotion of health. There is clearly a connection; however, for a number of sporting organisations that are currently charities, that could present difficulties. Take the example of a small boxing club. Its first action is to establish the club; it is driven by the sport. Many other indirect benefits flow from that. Promotion of health and well-being is one of those, but if the definition is tied entirely to health, it might limit those organisations in getting charitable status. That was the point that we were making.

The Chairperson:
For clarification, is it your concern that the new definition of amateur sport may be presented in such a way as to preclude groups from getting charitable status that would have previously been included?

Mrs Osborne:
Yes.

The Chairperson:
You have given the example of a boxing club.

Mrs Osborne:
Yes.

The Chairperson:
Have you considered other groups?

Mrs Osborne:
There are a number of sporting organisations and groups that have charitable status, including the Northern Ireland Amateur Gymnastics Association. It is important that such groups do not inadvertently get excluded.

The Chairperson:
It is useful to have that sort of information.

Mr Hilditch:
My question is perhaps more simplistic. What are your views on the potential burdensome levels of administration that the Charities Bill may cause office workers in those charities?

Mrs Hayward:
There will clearly be a bigger burden than currently exists. We welcome the legislation in the sense that there is a place for the charity commission in Northern Ireland and there is a need for it. However, there has to be a degree of proportionality. There has to be a difference between the big national charities that have a lot of paid staff and the smaller organisations that are perhaps managed by volunteers. I am not sure that the legislation is sufficiently strong to protect that proportionality.

We are glad that the accounts threshold for smaller charities has been changed since the consultation period. However, there is no clarity about what they are going to be expected to provide regarding annual reports and annual returns. For some charities their annual reports are simply the minutes of their annual general meetings. It is unclear as to whether they are going to be expected to do more than that.

Mr Hilditch:
Do you feel that that may frighten off some people who want to get involved in charities? Obviously, a lot of people do that on a voluntary basis.

Mrs Hayward:
That is a concern. It is hard enough —

Mr Hilditch:
It is difficult enough to get people to volunteer.

Mrs Hayward:
Exactly. The most recent research that we have published shows that volunteering in Northern Ireland is at a tipping point — it is close to falling off. We do not want to do anything that creates a barrier or deters people from getting involved. The essence of delivering the legislation will be about the support that is provided to those people to ensure that they can meet the requirements of the commission.

The Chairperson:
Your written submission refers to your preference for local authorities — as opposed to a commission — issuing permits for charities to hold collections. Is that a strong view? Why is that your preference?

Mrs Hayward:
That issue was raised at a public consultation on the initial draft legislation that we hosted for our members last year. The sense was that when the charity commission is set up, it is going to have a lot of work to do on registering charities. There was a fear that applications for permits could get bogged down in that whole melee — for want of a better word — and that the whole system could slow down. That would be off-putting and difficult for charities as many of them depend on that income.

The Chairperson:
Local councils are perhaps more amenable to whoever will be making the applications. Were some people concerned because their knowledge of who is going to be on the commission is a bit vague and that it could be too bureaucratic? Would those issues have had a bearing on that preference?

Mrs Hayward:
Yes, absolutely. People feel that the local councils have local knowledge. That had a strong bearing.

Mr Brady:
I thank the witnesses for the presentation. You talked about the characteristics of voluntary organisations. Do you think that the proposed legislation will have an effect on the make-up of those groups? I was involved with an organisation, and the average age was about 70. Will the Charities Bill affect the diversity of voluntary groups? I am not sure about that.

Mrs Osborne:
At the moment, governance is an issue for voluntary and community organisations. The charities commission and the legislation will add to that. Therefore, charities are conscious of meeting regulatory requests.

That will have a knock-on effect on the diversity of management committee membership. When people come on board they know that they will need skills and what their role will be. It can be difficult to get a diversity of people involved.

Mr Brady:
On the other hand, the fact that there are clearer parameters means that people who join organisations with charitable status will know what is expected of them.

Mrs Osborne:
That is correct. They should be aware of that already, but there is a huge task in making 30,000 individual voluntary management committee members aware of their roles and responsibilities. It is to protect them as individuals. There are organisational liabilities in relation to governance, but there are individual liabilities as well.

The Chairperson:
Thank you very much. That has been helpful and informative.