COMMITTEE FOR SOCIAL DEVELOPMENT
OFFICIAL REPORT
(Hansard)
Charities Bill
13 March 2008
Members present for all or part of the proceedings:
Mr Gregory Campbell (Chairperson)
Mr David Hilditch (Deputy Chairperson)
Mr Mickey Brady
Mr Jonathan Craig
Ms Anna Lo
Miss Michelle McIlveen
Mr Alban Maginness
Witnesses:
Mr Kieran Doyle ) Department for Social Development)
Mr Roy McGivern
The Chairperson (Mr Campbell):
I welcome Mr Kieran Doyle and Mr Roy McGivern, who will guide us through the clauses of the Charities Bill. Gentlemen, I am pleased to see you, although I might not be saying that at the end of the meeting.
Last week, the Committee had been briefed as far as clause 71, so perhaps you would begin with clause 72.
Mr Roy McGivern (Department for Social Development):
Clause 72 comes under part 8 “Charity accounts, Reports and Returns”, and it gives the commission the power to impose financial penalties for non-compliance. The clause is based on standard sections in the charities legislation in England and Wales and in Scotland.
The Chairperson:
There seems to be an issue about the duplication of regulations. How has that been addressed?
Mr Kieran Doyle (Department for Social Development):
Once established, the charity commission will work with other regulators to ensure that there is no duplication and to ensure that charities meet the regulatory requirements.
The Chairperson:
Will the commission be robust in doing that?
Mr Doyle:
Yes.
The Chairperson:
Are members content with clause 72?
Members indicated assent.
The Chairperson:
We shall now move on to clause 73.
Mr McGivern:
Clause 73 deals with group accounts. It makes provision for charities with a parent body to submit a group account rather than individual statements from each charity. The Presbyterian Church in Ireland raised some issues about that provision. However, it will be for the charity, rather than the charity commission, to decide whether to submit such accounts. In fact, experience in England and Wales leads us to believe that most large Churches will submit a group account rather than ask individual congregations to submit separate accounts.
The Chairperson:
What is the issue with single registrations?
Mr McGivern:
Registration is slightly different. It is open to any organisation to register as a charity if it meets the necessary conditions and can demonstrate that it has a charitable purpose. Large denominations can choose to submit a group account to cover several registrations from individual congregations and from the larger parent body. In many cases, it would make sense to submit a group account.
The Chairperson:
I imagine that that would make sense for a larger denomination.
Are members content with clause 73?
Members indicated assent.
The Chairperson:
We shall now move on to clause 74.
Mr McGivern:
Clause 74 is one of several clauses that come under the general heading of “Incorporation of Charity Trustees”. I will hand over to Mr Doyle to expand on that.
Mr Doyle:
As we deal with this set of clauses, we will discuss the legal aspects of setting up charities and trustees’ responsibilities.
There are three ways of setting up a charity in Northern Ireland: as a charitable trust; as an unincorporated charity; or as a charitable company. Clause 74 deals with the incorporation of the trustees of a charity; it provides for the trustees of a charity, rather than the whole charity, to become a body corporate. The advantage of the trustees becoming a body corporate is that the property of the charity would be vested in the name of the incorporated body. That avoids the need for execution of deeds, the transfer of land or investments to new names or the appointment of new holding trustees. The trustees enter into contracts and can sue and be sued in the name of the incorporated body. Thus this clause provides for a form of incorporation for trustees if the charity is not a corporate body.
During the public consultation, the Presbyterian Church asked for clarification on the status of its trustees. The Church said that its trustees are a corporate body; in that case, the trustees will benefit from all the advantages of incorporation.
The Chairperson:
What about voluntary committee member participation? I think that it was a representative from a group that worked in supporting communities who said that the Bill could deter some people from becoming trustees.
Mr Doyle:
Perhaps some people fear that the legislation will put people off wanting to be trustees. From the point of view of the proposed charity commission, there has to be a legal framework to ensure that charities are well managed, well governed and well run. The Charities Bill provides an opportunity to introduce such a legal framework. Many of the provisions of the Bill have been welcomed, and it is good that a formal structure will be put in place for charities.
The Chairperson:
Are members content with clause 74?
Members indicated assent.
The Chairperson:
We shall now move on to clauses 75 to 86, about which the Committee has received no communication. Mr Doyle, would you like to deal with those as a block?
Mr Doyle:
Clauses 75 to 86 provide further details about the application process for incorporation and how a person, charity or organisation applies for it.
The Chairperson:
Are members content with clauses 75 to 86?
Members indicated assent.
The Chairperson:
We shall now move on to clause 87.
Mr Doyle:
Clause 87 provides details of the persons who would be disqualified from being a charity trustee: those convicted of an offence involving dishonesty, deception or bankruptcy; and those who have been disqualified from being a trustee in England and Wales. The Committee heard comments on clause 87 during its evidence sessions. One was received from the Chief Officers 3 rd Sector (CO3) regarding ex-prisoners who may be involved in a prisoner welfare group, for instance. It was queried whether they would be disqualified because they had been convicted of a criminal offence. Clause 87(4) permits the charity commission for Northern Ireland to use its discretion to waive a disqualification, and I imagine that it will consider each case individually.
The Chairperson:
One would imagine that it would be only in the most exceptional circumstances that the charity commission would waive a disqualification.
Mr Doyle:
Yes, but we foresee a situation arising in Northern Ireland where an ex-prisoner may wish to become a trustee of a charity. The facility will exist for the ex-prisoner’s disqualification to be waived.
Clause 87 provides that those who have been disqualified by the Charity Commission for England and Wales or by the Office of the Scottish Charity Regulator will be disqualified from being trustees here. The Volunteer Development Agency asked why that did not extend to people who had been disqualified in the Irish Republic. There are several reasons for that, including the fact that the Southern charities legislation has not yet been enacted. That point is worth exploring, but we cannot do so until the Southern legislation has been enacted. The two Governments would have to enter into an agreement to allow that to happen, and there may also be issues of European legislation.
The Chairperson:
When is the Southern legislation likely to be enacted?
Mr Doyle
The Irish charities legislation is going through Parliament, so it should be enacted about the same time as our Charities Bill; there might be only a difference of months.
The Chairperson:
Will the Southern legislation cover people who have been disqualified from being trustees in Poland or Lithuania, given the number of migrant workers coming from those countries?
Mr Doyle:
I would need to check.
Mr McGivern:
It would depend on whether there were charity regulations in the jurisdictions from which they come. In many European countries, I suspect that such regulations are not in place. However, we would need to investigate the matter in more detail.
The Chairperson:
I would have thought that this was the appropriate time to do so, as well as checking with the Irish authorities.
Are members content with clause 87?
Members indicated assent.
The Chairperson:
We shall now move on to clauses 88 to 95, about which we have not received communication.
Mr Doyle:
The clauses relate to persons acting as a trustee while disqualified. In addition, miscellaneous provisions cover other matters such as trustee remuneration for providing services to a charity, the power to relieve trustees from liability for breach of trust or duty, and trustees’ indemnity insurance.
The Chairperson:
Are members content with clauses 88 to 95?
Members indicated assent.
The Chairperson:
We shall now move on to part 10, clauses 96 to 103, about which we have not received communication.
Mr Doyle:
This part of the Bill covers charitable companies. Strictly speaking, charitable companies are regulated under company law; however, there is some crossover between company and charity law, and clauses 96 to 103 cover such instances. For example, if a charity that is a company wishes to wind up, it would have to seek the charity commission’s consent; or if a company wishes to alter its objects clauses, consent would be required from the charity commission. The provision in those clauses is to protect charities.
The Chairperson:
Are members content with clauses 96 to 103?
Members indicated assent.
The Chairperson:
We shall now move on to clause 104.
Mr Doyle:
Clause 104 deals with the annual audit or examination of accounts of charitable companies. The Northern Ireland Council for Voluntary Action (NICVA) asked why the provisions of clause 104 do not apply to company law. Charities that are companies are generally covered by company law; however, there is some crossover. The Companies Act 2006 — which applies to the whole of the UK — is being phased in over a long time, and amendments will be made in order to dovetail company and charity legislation in England and Wales. The Department will closely monitor the situation, and clause 181 will provide a power to make such amendments to the Charities Bill.
The Chairperson:
Has NICVA been made aware of that rationale?
Mr Doyle:
It was added to the Committee for Social Development’s comments for public consultation. Therefore it has been recorded.
The Chairperson:
Are members content with clause 104?
Members indicated assent.
The Chairperson:
We shall now move on to clauses 105 to 108, about which we have not received communication.
Mr Doyle:
These clauses deal with a new legal entity that will be introduced by the charity commission: a charitable incorporated organisation that will have the same status as a company, but, instead of the Companies Registry being the lead regulator, as is the case for charities that are companies, the charity commission will be the lead regulator. That will cut down on much overburdensome regulation and on dual regulation by the Companies Registry and the charity commission. It is an extra facility for which Northern Ireland charities might apply, and charities that are companies will be able to convert to a charitable incorporated organisation.
The Chairperson:
Are members content with clauses105 to 108?
Members indicated assent.
The Chairperson:
We shall now move on to clauses 109 and 110, about which we have not received communication.
Mr Doyle:
Clauses 109 and 110 cover the process of registering and making an application to be a charitable incorporated organisation to the charity commission for Northern Ireland.
The Chairperson:
Are members content with clauses 109 and 110?
Member’s indicated assent.
The Chairperson:
We shall now move on to clauses 111 to 117, about which we have received no communication.
Mr Doyle:
Clauses 111 to 117 cover conversion, amalgamation and transfer to a charitable incorporated organisation (CIO) from either a charitable company or an industrial provident society. It enables such an organisation to transfer if it wishes.
The Chairperson:
Are members content with clauses 111 to 117?
Members indicated assent.
The Chairperson:
We shall now move on to clause 118.
Mr Doyle:
Clause 118 covers the winding up, insolvency and dissolution of charitable incorporated organisations.
The Chairperson:
Are members content with clause 118?
Members indicated assent.
The Chairperson:
We shall now move on to clause 119, about which we have received communication.
Mr Doyle:
Clause 119 provides a power to transfer all property of an unincorporated charity to one or more charitable incorporated organisations. We received communication from Cleaver Fulton Rankin Solicitors regarding the transfer of designated land in this process. We have taken legal advice and will consider that point. Designated land is land that has been designated to a charity for a specific purpose.
Ms Lo:
CO3 also had an issue with clause 119.
Mr Doyle:
Where comments have been made in support of a clause, I have either simply stated that there has been no response or I have mentioned the comment; but where there is a salient point that needs to be addressed, I have provided a response.
The Chairperson:
Are members content with clause 119?
Members indicated assent.
The Chairperson:
We shall now move on to clauses 120 and 121.
Mr Doyle:
Clauses 120 and 121 cover miscellaneous provisions relating to charitable incorporated organisations.
The Chairperson:
Are members content with clauses 120 and 121?
Members indicated assent.
The Chairperson:
We shall now move on to clause 122 of part 12, about which we have received communication similar to that received concerning clause 119.
Mr Doyle:
Clause 122 concerns the power to transfer all property of an unincorporated association to another charity with like purposes. It is simply a provision in the Bill to allow that to happen.
The Chairperson:
Are members content with clause 122?
Members indicated assent.
The Chairperson:
We shall now move on to clauses 123 and 124.
Mr Doyle:
Those clauses simply concern general provisions related to clause 122.
The Chairperson:
Are members content with clauses 123 and 124?
Members indicated assent.
The Chairperson:
We shall now move on to clause 125.
Mr Doyle:
Clause 125 provides for the power to replace the purposes of an unincorporated charity. An unincorporated charity is a charity that is not a company.
The Chairperson:
Are members content with clause 125?
Members indicated assent.
The Chairperson:
We shall now move on to clause 126, about which we have received communication.
Mr Doyle:
Clause 126 concerns provision of a power for the charity commission for Northern Ireland to modify the power of procedures of an unincorporated charity.
The Chairperson:
The Charity Commission for England and Wales commented on the implications for schemes made for common investment funds, which would have similar implications for our regime.
Mr Doyle:
The reason that I have not provided a response to that comment is that we have noted it and will consider it.
The Chairperson:
From an initial reading, will it have implications for a charity commission in Northern Ireland, or is that something that you are still considering?
Mr Doyle:
We will monitor and consider it. The Charity Commission for England and Wales has not been specific in its comments. If the Charity Commission for England and Wales were to amend the 2006 Act, the Department for Social Development would follow suit.
The Chairperson:
Does that mean that you are not sure because they are not sure?
Mr Doyle:
Yes. [Laughter.]
[Inaudible due to mobile phone interference.]
The Chairperson:
If an amendment were required, will you come back to the Committee?
Mr Doyle:
Yes.
The Chairperson:
Are members content with clause 126?
Members indicated assent.
The Chairperson:
We shall now move on to clause 127, about which we have correspondence.
Mr Doyle:
Clause 127 will permit, in certain circumstances, an unincorporated charity to spend a proportion or all of its endowment fund as capital. That might happen is if the charity were to transfer assets to another charity or if it were to wind up. That charity might have an endowment fund that it could not touch; however, if a resolution were passed and the charity commission for Northern Ireland were notified, clause 127 would allow it access to such a fund.
We have consulted our legal advisers on the comment that the Charity Commission for England and Wales made on clause 127, and we will consider it.
The Chairperson:
Are members content with clause 127?
Members indicated assent.
The Chairperson:
We shall now move on to clauses 128 and 129.
Mr Doyle:
Clauses 128 and 129 will permit, in certain circumstances, larger unincorporated charities to spend capital given for a particular purpose or subject to a special trust.
The Chairperson:
Are members content with clauses 128 and 129?
Members indicated assent.
The Chairperson:
We shall now move on to clause 130 of part 13, about which the Committee has received communication.
Mr Doyle:
Chapter 1 of part 13 covers public charitable collections. In Northern Ireland the PSNI regulates street collections and most door-to-door collections and issues the permits that allow those collections. The Bill makes provision for the public charitable collections function to pass to the charity commission for Northern Ireland. The PSNI said that it is content with that, as it would rather have one central body regulating street and door-to-door collections.
The Chairperson:
Are you aware that the Association of Charity Shops is concerned that it will have to cross what it regards as a three-fold barrier?
Mr Doyle:
Yes, and I will talk about that when we come to the relevant clause. Last week, I discussed the clause in question with the Association of Charity Shops. The association appeared to be content at the time; however, having thought about it, it has decided to write to the Committee to express its concerns.
The Chairperson:
What is the position with regard to Internet fundraising?
Mr Doyle:
Part 13 will regulate charitable collections in public places and door-to-door collections through a system of licences and permits that will be issued through the charity commission for Northern Ireland. That issue sparked a great deal of comment. Generally, regulation is welcome; however, concerns were raised that local councils would be best placed to issue permits because they have a better knowledge of where collections are carried out. In England and Wales, the Charity Commission is the lead regulator for public collections; the Office of the Scottish Regulator performs that function in Scotland. However, the local councils issue the permits.
Due to the review of public administration, those functions cannot be passed to local councils in Northern Ireland. The present legislative framework places those functions — the regulation of street collections and other public collections — with the charity commission for Northern Ireland. However, the option exists of passing the issuing of permits to local councils in future.
The Chairperson:
How does that address Internet fundraising?
Mr Doyle:
The question was asked why lotteries and Internet fundraising were excluded from the Bill. Lotteries are governed by separate legislation and are regulated by local councils.
Mr McGivern:
They are governed by the Betting, Gaming, Lotteries and Amusements ( Northern Ireland) Order 1985.
Mr Doyle:
Many organisations find collecting or soliciting on the Internet very difficult to police. The Internet is evolving, so we will have to keep a watchful eye on it.
Mr McGivern:
We will have to work with other regulators in the UK and Ireland to monitor their approach, and perhaps introduce further legislation to police Internet fundraising.
Mr A Maginness:
What is the position in England and Scotland on charitable fundraising on the Internet? Is charitable fundraising covered in their charities legislation or is it regulated by other legislation?
Mr Doyle:
The Charities Bill reflects legislation in England and Wales.
Mr McGivern:
The Charities Act 2006 in England and Wales does not cover Internet fundraising. There is separate legislation in Northern Ireland that covers gaming and betting, and I think that the same situation applies in England and Wales.
Mr A Maginness:
Surely gaming and betting is a separate category of Internet use. We are talking about specific fundraising by charities here.
The Chairperson:
We are talking about Northern Ireland-based charities’ use of the Internet for fundraising purposes and how that would come under the provisions of the Bill.
Mr A Maginness:
There seems to be a gap in the Bill. Indeed, Internet fundraising may be too complex a matter for the Charities Bill to deal with. How do other jurisdictions regulate such activity? You are probably unsighted on that — and it is unfair to ask such a question now — but it would be useful if the departmental officials could get back to us on the issue.
Mr McGivern:
That is a valid point. We are not aware of legislation in the UK or Ireland that deals specifically with Internet fundraising. We must meet the Committee and decide whether such legislation is required in Northern Ireland; having listened to what has been said today, it might be needed.
The Chairperson:
It sounds like an agenda item for a British-Irish Intergovernmental Conference meeting.
[Laughter.]
Mr A Maginness:
It certainly does.
The Chairperson:
Are members content with clause 130?
Members indicated assent.
The Chairperson:
We shall now move on to clause 131.
Mr Doyle:
Clause 131 covers charitable appeals that are not public charitable collections. The clause clarifies that a charitable appeal is not a public charitable collection if that appeal is made during a public meeting; in a churchyard; on land used for public worship; or on land that is enclosed.
The Chairperson:
Are members content with clause 131?
Members indicated assent.
The Chairperson:
We shall now move on to clause 132, about which we have received no communication.
Mr Doyle:
Clause 132 provides clarification of the terms used in this part of the Bill.
The Chairperson:
Are members content with clause 132?
Members indicated assent.
The Chairperson:
We shall now move on to clauses 133 and 134, on which the Committee has received correspondence.
Mr Doyle:
Clauses 133 and 134 cover restrictions that apply to conducting door-to-door or public collections, such as when a person has not obtained the appropriate permit.
The Chairperson:
There are concerns that the charity commission will have limited local knowledge; should local authorities issue permits instead?
Mr Doyle:
The Department could not transfer that function to local councils because of the review of public administration (RPA). There is a provision that, at some future stage [inaudible due to mobile phone interference].
Mr McGivern:
In line with other RPA announcements, the Department intends to consider the transfer of that function, and if the charity commission for Northern Ireland is established later in 2008, one of its priorities will be to examine that matter.
The Chairperson:
I look forward to that. Are members content with clauses 133 and 134?
Members indicated assent.
The Chairperson:
We shall now move on to clause 135.
Mr Doyle:
Clause 135 covers an exemption for local short-term collections. A public charitable collection is exempt if it is local, short term and the promoter notifies the charity commission for Northern Ireland before the collection.
The Chairperson:
Are members content with clause 135?
Members indicated assent.
The Chairperson:
We shall now move on to clause 136.
Mr Doyle:
Clause 136 covers the method of applying to the charity commission for a public collection certificate. The PSNI feels that it should be notified when a collection takes place in a relevant district. The Department recognises that it is important for the charity commission to liaise effectively with the PSNI, and that relationship will be defined in a proposed memorandum of understanding to be drawn up between those two bodies.
The Chairperson:
Are members content with clause 136?
Members indicated assent.
The Chairperson:
We shall now move on to clause 137.
Mr Doyle:
Clause 137 covers the determination of applications and the issuing of certificates. The clause requires that the charity commission, on receipt of an application for a public collection certificate, must, after enquiries, either grant or refuse that certificate.
The Chairperson:
Are members content with clause 137?
Members indicated assent.
The Chairperson:
We shall now move on to clauses 138 to 141.
Mr Doyle:
Clause 138 covers the grounds for refusing to issue a certificate. Those grounds include instances when the applicant has been convicted of a relevant offence, has failed to demonstrate due care and diligence, and so on.
The Chairperson:
Are members content with clauses 138 to 141?
Members indicated assent.
The Chairperson:
We shall now move on to clause 142.
Mr Doyle:
Clause 142 explains how a person can apply to the charity commission for a permit to conduct a public charitable collection. The Department was informed that the Association of Charity Shops had made some comments to the Committee. I met representatives from the association last week, and I think that the Committee also received correspondence from the association yesterday or this morning.
The Chairperson:
In correspondence received by the Committee, the Association of Charity Shops states:
“The proposed system will introduce a three-tier system of certification, permitting and notification requirements on charity shops carrying out collections. This would create and additional layer of regulation which is not present elsewhere in the UK.”
Is that accurate?
Mr Doyle:
That part is accurate. However, the rest of the sentence states:
“nor in Northern Ireland at present”.
The House to House Charitable Collections Act ( Northern Ireland) 1952 currently regulates door-to-door collections.
The Chairperson:
Is the “three-tier system” present at the moment?
Mr Doyle:
No, it is not.
The Chairperson:
However, that system will be introduced under the current terms of the Bill.
Mr Doyle:
Yes, it will.
The Chairperson:
The point is that that is not the case in England and Wales.
Mr Doyle:
In England and Wales, the permits are issued by councils. We do not have that facility as yet. That is the difference. There is not the same level of notification to the charity commission.
The Chairperson:
Are you saying that, if under the review of public administration there is a transfer to local government — without prejudice to what may or may not happen — the position on charity shops and collections will be identical to that which pertains in England and Wales under the legislation there?
Mr Doyle:
It is different in England and Wales, where there is a simple requirement to give councils notice of public collections. Under the system proposed in the Charities Bill, a certificate of fitness will be issued, followed by a permit specifying the duration of the collection and the manner in which it will take place, and the charity commission will be notified.
Clause 143(3) allows the charity commission, when it issues the permit, to decide on the manner and the timescale of the permit. In effect, a permit for a charity shop association or an individual charity shop could be open-ended. However, that provision would be the subject of a discussion between the charity commission and the relevant charities to decide which it would operate.
Mr A Maginness:
Do you think that, under the proposed legislation, an open-ended permit could be given? Is there anything that would prevent that?
Mr Doyle:
No, there is not. There is a power under clause 143(3), which authorises the charity commission to make a decision on the timescale for the permit, whether it be for a year, five years or open-ended. There is scope in the Bill for the charity commission to do that.
Mr McGivern:
It also recognises the difference between someone organising an annual collection or a flag day, and a charity shop that collects 365 days a year.
Mr A Maginness:
That seems reasonable, Chairperson, if that power is contained there.
The Chairperson:
As a result of last week’s meeting with representatives of the Association of Charity Shops, and the issues that have been raised today, would it be possible for you to have another meeting with them to try to allay their concerns? It is obvious that their concerns have not been allayed; after they met you, they wrote to the Committee, which is an indication that they are not happy.
Mr Doyle:
They were not happy with the word of an official. To be honest, however, it is in the Bill. The scope is there, but that did not appear to satisfy the association. The set-up in Northern Ireland is different to the set-up in England, Wales and Scotland. The Northern Ireland legislation is different. England, Wales and Scotland do not have legislation covering street collections or door-to-door collections, including the black bin bag or goods-in-kind collections.
The Chairperson:
I got the impression, from their communication, that their concern was not so much that there is a different legislative set-up, but that charity shops in Northern Ireland would have a more complicated set-up to deal with than their counterparts in England, Scotland and Wales. If you can alleviate their concerns on that, I suspect that the issue will be a dead one.
Mr Doyle:
Much of this legislation reflects the situation in England and Wales, except where powers are devolved to local councils. There is scope in clause 143(3), but it may be a matter for the Association of Charity Shops, once the legislation is up and running, and advice and guidance are available, to meet the charity commission to decide the best way forward. The Department has certainly noted the association’s concerns. I will meet representatives of the association again and flag the matter up. We cannot prejudge the charity commission’s decision. It will be an independent body.
The Chairperson:
Therefore, the Department will meet representatives from the association again. Are Members content with clause 142?
Members indicated assent.
The Chairperson:
With shall now move on to clause 143.
Mr Doyle:
Under clause 143, the charity commission for Northern Ireland, on receipt of an application for a public collection permit, and after making such enquiries as it sees fit, will either issue a permit or refuse the application.
The Chairperson:
Are members content with clause 143?
Members indicated assent.
The Chairperson:
We shall now move on to clauses 144 to 146. The Committee has received communication on permits, which are dealt with by those clauses.
Mr Doyle:
Clauses 144 to 146 cover the grounds for refusal of a permit; for example, when the charity commission for Northern Ireland is of the opinion that a collection would cause undue inconvenience to members of the public, householders or businesses. It also covers the withdrawal or variation, and so forth, of a permit and explains the circumstances in which the charity commission can withdraw, attach a condition or vary a public collection permit. It also covers the grounds for appeals against the commission’s decision to refuse a permit.
The Chairperson:
Are Members content with clauses 144 to 146?
Members indicated assent.
The Chairperson:
We shall now move on to clause 147.
Mr Doyle:
Clause 147 allows the Department to make regulations that relate to public charitable collections.
The Chairperson:
Are Members content with clause 147?
Members indicated assent.
The Chairperson:
We shall now move on to clause 148.
Mr Doyle:
Clause 148 explains offences that could be connected to any charitable appeals; for example, the improper use of badges or documentation.
The Chairperson:
Are members content with clause 148?
Members indicated assent.
The Chairperson:
We shall now move on to clauses 149 to 155.
Mr Doyle:
This part of the Bill covers the control of fund-raising for charitable institutions. Much of it applies to professional fund-raisers and the regulations under which they engage with charities in Northern Ireland.
The Chairperson:
Are members content with clauses 149 to 155?
Members indicated assent.
The Chairperson:
We shall now move on to clause 156, which deals with regulations about fund-raising.
Mr Doyle:
Clause 156 provides the Department with powers to make regulations for fund-raising.
The Chairperson:
What is the difference between the charity commission’s role with regard to fund-raising and that of the Fundraising Standards Board?
Mr Doyle:
I have met officials from the Fundraising Standards Board on several occasions. Its role is to promote self-regulation in the charitable sector in England, Wales and Scotland, and it wishes to carry that through into Northern Ireland. It believes that clause 157 will assist it in promoting the opportunity for self-regulation in fund-raising in Northern Ireland. Again, the Department cannot prejudge a decision of the charity commission for Northern Ireland. When the commission is established, it would consider the matter with the Fundraising Standards Board.
The Chairperson:
Are members content with clause 156?
Members indicated assent.
The Chairperson:
We shall now move on to clause 157.
Mr Doyle:
Clause 157 provides the Department with the power to make regulations as necessary to regulate charity fund-raising.
The Chairperson:
Are members content with clause 157?
Members indicated assent.
The Chairperson:
We shall now move on to clause 158.
Mr Doyle:
Clause 158 is an explanation of the terms that are used in this part of the Bill.
The Chairperson:
There is nothing controversial in the clause. Are members content with clause 158?
Members indicated assent.
The Chairperson:
We shall now move on to clause 159.
Mr Doyle:
Clause 159 introduces a new power that has not previously existed in Northern Ireland, whereby, under legislation, the Department can give financial assistance to charitable, benevolent and philanthropic institutions — organisations that are not charities. The qualification is that:
“The Department may give financial assistance to any charitable, benevolent or philanthropic institution in respect of any of the institution’s activities which directly or indirectly benefit the whole or any part of Northern Ireland.”
The Chairperson:
The Committee has received no communication on that clause. Are members content with clause 159?
Members indicated assent.
The Chairperson:
We shall now move on to clause 160.
Mr Doyle:
Clause 160 contains a further explanation of the terms that are used in this part of the Bill.
The Chairperson:
Are Members content with clause 160?
Members indicated assent.
The Chairperson:
We shall now move to clauses 161 to 163.
Mr McGivern:
Clauses 161 to 163 deal with the register of charity mergers. The commission will keep a record and maintain a register of any charity mergers that take place.
The Chairperson:
The Committee has received no communication on those clauses. Are members content with clauses 161 to 163?
Members indicated assent.
The Chairperson:
We shall now move on to clause 164. The Committee has received correspondence on this clause.
Mr McGivern:
Clause 164 covers circumstances in which a charity receives a gift during or after a charity merger. The law firm Cleaver Fulton Rankin has raised a technical issue regarding the risk of a gift not transferring because of time delays. We consider that to be a valid point. The possibility exists that a charity could lose the benefit of a gift if that gift is made during the time between the merger and the registration of that merger. Therefore, the charity commission will have to take note of that issue and ensure that any charity does not suffer a loss because of that time delay.
The Chairperson:
That issue was also raised by the Charity Commission for England and Wales. Are members content with clause 164?
Members indicated assent.
The Chairperson:
We shall now move on to clauses 165 and 166.
Mr McGivern:
The Committee is very familiar with clauses 165 and 166. They have caused considerable correspondence and oral submissions. Clause 165 provides an exemption from aspects of the Bill in relation to designated religious charities; it is worth pointing out again that it has no impact whatsoever on charity registration. During last week’s evidence session with some of the smaller faith-based organisations, it became clear that there was a misconception that they would not be able to register as a charity. This matter is completely separate from registration; it is an exemption that was introduced to recognise the unique structure of faith-based charities. Clause 166 lists the various criteria.
The Chairperson:
The Committee has received several items of correspondence on this issue, particularly from smaller groups that may fall outside either the time or numerical criteria. Will you tell the Committee where we are on that issue?
Mr McGivern:
The Department has considered all the issues that have been raised. There is a clear need to strike a balance between the charity commission being able to go into a charity where there is evidence of mismanagement or misconduct and carry out a proper investigation, set against the need to recognise the unique structures in many faith-based organisations in Northern Ireland.
A membership level needs to be set, because there is a possibility of a faith-based charity being set up with very few members — perhaps a bogus charity — which would then be exempt from clauses 33 to 36. That would mean that the charity commission could not carry out an investigation into that charity, remove or suspend trustees, or appoint an interim manager.
It must be made clear that charities must have been established for a set period of time, have proper governance arrangements in place and have a membership level that would inspire confidence that the charity has a structure in place to deal with any problems internally rather than the charity commission having to deal with them.
The membership level was set at 1,000, based on Scottish legislation, and also taking the different population levels into account. In Scotland, the level was originally set at 10,000 but was reduced to 3,000 during stage 2 of the Bill. The Department has put the figure of 1,000 in the Bill, but it is open to hearing the Committee’s views.
There is no consensus on the number of smaller Churches in Northern Ireland, because there is no register of those Churches. The Department has spoken to representatives of the Irish Council of Churches and the Churches’ Community Work Alliance, but it is very difficult to get an overall picture of the numbers involved.
Mr Craig:
You will find that you will never get a register with independent Churches. It is a contradiction in terms: a Church is not independent if it is registered. Should the charity commission not be considering an opt-out clause for independent Churches with regard to the membership level of 1,000? The commission could deal with individual cases; it could make a judgement of whether a charity is a bona fide Church or religious organisation. If the charity meets all the other criteria, it can be exempt from the 1,000 members requirement. That would be a sensible way to deal with the issue.
Mr McGivern:
Mr Craig, are you saying that there should be no numerical figure at all?
Mr Craig:
No; I am saying that, given the circumstances of independent Churches, the commission should have the power to waiver the 1,000 figure under certain conditions, if the charity meets the rest of the criteria.
Mr McGivern:
There is concern that that could leave the system open to abuse. Who would decide whether a small Church or small faith-based organisation is bone fide? The charity commission would have to satisfy itself, which raises concern that there would not be an adequate level of assurance for an organisation with a very few members that does not have sufficient governance arrangements and has not been long established. Do you think that lowering the figure of 1,000 would bring in a number of the Churches to which you refer?
The Chairperson:
The problem is that, regardless of what the membership level is, there will be a small number of Churches that are just above or below the threshold. We do not want a situation where Churches are trying to recruit an extra member to get above the threshold or lose one to get under it. If small Churches or religious groups that are going to register as a charity meet the governance requirements, why is it necessary to have a membership threshold and the requirement that the group has been established for a minimum of 10 years?
Mr McGivern:
Clauses 33 to 36 protect charities. Therefore, if there is an internal issue of misconduct in a small Church with, say, 50 members, it is beneficial to that Church if the charity commission resolves the issue instead of being left to deal with the matter itself. The commission will have the expertise to resolve the matter for that Church or faith-based organisation. If that small Church were exempt from clauses 33 to 36, would there be public confidence that the matter could be resolved internally and that it would have sufficient structures to do so? Although the Department has total confidence that the large, long-established denominations in Northern Ireland are capable of resolving such matters internally, it is concerned that some small Church organisations would not have the capacity or the skill to resolve those issues. That could lead to a loss of public confidence in the charity or the work of the charity commission.
The Chairperson:
That is what happens at present.
Mr McGivern:
There are no measures in place at present.
The Chairperson:
Therefore, if allegations of inappropriate conduct are made, there is no current resolution.
Mr McGivern:
That is correct — there is nothing in place at the moment.
The Chairperson:
How would leaving small organisations to deal with problems themselves make matters worse?
Mr McGivern:
The purpose of clauses 33 to 36 is to enable the charity commission, when it is established, to resolve matters that arise. At present, there is no mechanism to do that apart from police investigations. If we set a barrier between zero and 1,000 members, what would be the appropriate number?
Mr Brady:
You make an inherent assumption that, the larger an organisation is, the better equipped it is to deal with problems. That is not necessarily the case if one considers the statutory organisations with which we deal. The premise on which the membership level is based is not very strong. It is an arbitrary figure that should be examined. Small organisations are as adept at handling internal problems as are larger organisations. I make that judgement from my dealings with statutory organisations.
Mr McGivern:
The Department accepts that and is open to suggestions. There is some assurance in the 10-year establishment and criteria under clause 166(3)(e), which deals with internal governance arrangements. Therefore, the charity commission would have to be assured that there were proper governance arrangements in place before charitable status could be granted. That is a potential safeguard.
In Scotland, the feeling was that the membership should not be lower than 3,000. Indeed, only nine or 10 applications have been received.
Mr Brady:
My point is that if all the other criteria are fulfilled, the numbers are not really that important.
The Chairperson:
That is the point.
Ms Lo:
I still think that that criterion is quite divisive and will lead to the creation of a hierarchy of Churches. The implication is that some Churches — the main Churches — are more trustworthy than the smaller Churches and therefore can avoid abiding by the provisions in those clauses.
Mr McGivern:
We are not saying that they are more trustworthy. We are simply saying that they have had the structures in place, over a period of time, to deal with those types of issues. A small newly established Church would take some time to find its feet and put governance arrangements in place, and it may, therefore, not have the appropriate structures in place to deal with those issues.
Ms Lo:
Some faith groups may have been established for more than 10 years, but they could never achieve a membership of 1,000 people and will, therefore, never attain that religious charity status. People see this as a matter of principle. They do not understand why some Churches should be allowed to attain that religious charity status, while others are not.
The Chairperson:
To Committee members and those who have made the effort to communicate with the Committee, the assumption seems to be that Churches that have over 1,000 members and that have been established for at least 10 years have an appropriate level of governance and expertise, while those that have not reached that level and do not meet those specific criteria do not have that expertise.
Mr McGivern:
Potentially, yes.
The Chairperson:
Potentially, yes. If a line could be inserted in that clause that focuses on expertise and governance, irrespective of the size of the organisation, people would be more prepared to concede on the issue. At the moment, there is concern about this arbitrary level — the idea that 50·1% is in, but 49·9% is out.
Mr McGivern:
There is a possibility that the Department will reconsider that criterion. In light of the number of representations that the Committee has received, and the views that members have expressed today, we can perhaps consider reducing the figure of 1,000, or perhaps removing that particular criterion and leaving the others in.
Mr Craig:
I can fully understand why the criterion for a Church to be established for a number of years has been included, because the system could be abused in certain circumstances. The figure has been set at 10 years, but even if it were five years, in all honesty, how many criminals do we know who would set up an organisation for five or 10 years simply to defraud the system? It is incredibly unlikely that that would happen — it would probably never happen. We are all making the same argument today — the numbers are not relevant. If an organisation has met all the governance criteria, is a bona fide religious organisation and has been established for a period of five to 10 years, what are the chances of its having been set up to defraud the system? They are practically zero.
Account must also be taken of the fact that clause 166 is an exemption clause. If a Church’s governing body does not initially deal with any untoward behaviour in its organisation, the commission has the authority and right to deal with it, anyway. Therefore, the clause simply allows a Church to deal with a matter under its own strictures first of all. I am mystified as to why a criterion of a membership of 1,000 has been included, because the charity commission can take over in the end in any case.
The Chairperson:
Mr McGivern, just before Jonathan Craig spoke, you intimated that, having read the communications and listened to the contributions today from members, the Department would revisit the clause. If members are content to do so, we could leave it at that for now, and you could get back to us about that provision.
On that basis, are members content with clauses 165 and 166?
Members indicated assent.
The Chairperson:
We shall now move on to clause 167.
Mr McGivern:
Clause 167 deals with institutions that are not charities under the law of Northern Ireland but which are UK-wide charities. It sets up two different forms of registration. Clause 16 deals with the registration of charities that operate under the law of Northern Ireland; clause 167 is a different category. It deals with charities that are registered with the Charity Commission for England and Wales or with the Office of the Scottish Charity Regulator. They will also be required to register their activities in Northern Ireland and report them to the charity commission for Northern Ireland. We were legally advised to change the wording of the Bill to ensure that there was a distinction between clause-16 charities that operate under the law here and which register here with the commission and those that operate on a UK-wide basis.
The Chairperson:
Are members content with clause 167?
Members indicated assent.
The Chairperson:
We shall now move on to clauses 168 to 178.
Mr McGivern:
Clauses 168 to 178 deal with miscellaneous provisions relating to such matters as the manner of giving notice of a charity meeting, the supply by the charity commission of documents, and the public inspection of those documents.
The Chairperson:
We have received no communication on clauses 168 to 178. Are members content with clauses 168 to 178?
Members indicated assent.
The Chairperson:
We shall now move on to clause 179, which deals with orders and regulations.
Mr McGivern:
We have received no comment on clause 179; it is a standard clause.
The Chairperson:
Are members content with clause 179?
Members indicated assent.
The Chairperson:
We shall now move on to clause 180, about which we have received communication.
Mr McGivern:
Clause 180 deals with general interpretation, and it provides an explanation of some of the terms in the Bill. I know that the Committee received some comments about charity trustees.
The Chairperson:
The Scottish legislation includes an explanation on the general duties of trustees.
Mr McGivern:
The Bill will not cover all the duties and responsibilities of a charity trustee, but it will set out the main duties. We do not want the charity commission to have to change the legislation every time the duties of a trustee change. Following the enactment of the legislation, the charity commission will have to issue advice and guidance to all charities on the roles and responsibilities of a trustee. There is no reason for those roles and responsibilities to appear in the Bill.
The Chairperson:
The Scottish authorities thought differently.
Mr McGivern:
They did; perhaps they were being overprotective.
The Chairperson:
Are members content with clause 180?
Members indicated assent.
The Chairperson:
We shall now move on to clauses 181 to 186.
Mr McGivern:
Clauses 181 to 186 contain miscellaneous provisions relating to the commencement of the Act.
The Chairperson:
No correspondence has been received on those clauses. Are members content with clauses 181 to 186?
Members indicated assent.
The Chairperson:
We shall now move on to schedule 1.
Mr Doyle:
Schedule 1 covers the terms of the appointment of the charity commission for Northern Ireland, its remuneration and staffing. NICVA said that the charity commission should be overseen by the Office of the Commissioner for Public Appointments for Northern Ireland (OCPANI). The appointment of the deputy chief commissioner and three to five commissioners will be carried out through the public appointments procedure and overseen by the code of practice of OCPANI.
The Chairperson:
What about the suggestion that two members of the commission should be from a legal background?
Mr Doyle:
We have followed the terms of appointment in England and Wales; they are in the Bill. There is a legal requirement that at least one member of a charity appeal tribunals have a legal background. The Department feels that that is sufficient, and it follows the make-up in other types of organisations.
The Chairperson:
What about the suggestion that the commission be fully independent and directly accountable to the Executive?
Mr Doyle:
As a non-departmental public body, the charity commission for Northern Ireland will be accountable to the Department for Social Development. The Minister for Social Development will lay an annual report before the Assembly for consideration.
The Chairperson:
Therefore it will be directly accountable to the Executive. Are members content?
Members indicated assent.
The Chairperson:
We shall now move on to schedule 2.
Mr Doyle:
Schedule 2 covers the membership and terms of appointment of the charity tribunal.
The Chairperson:
Are members content with schedule 2?
Members indicated assent.
The Chairperson:
We shall now move on to schedule 3.
Mr Doyle:
Schedule 3 covers the appeals and applications that can be made to the charity tribunal. In effect, it is a list of decisions that the charity commission for Northern Ireland can make and against which people can appeal.
The Chairperson:
Are members content with schedule 3?
Members indicated assent.
The Chairperson:
We shall now move on to schedule 4.
Mr Doyle:
Schedule 4 sets out that the charity commission for Northern Ireland may refer any question it considers appropriate to the charity tribunal for consideration.
The Chairperson:
Are members content with schedule 4?
Members indicated assent.
The Chairperson:
We shall now move on to schedule 5.
Mr Doyle:
Schedule 5 defines connected persons for the purposes of section 58(2), which covers the disposal of charitable property and land.
The Chairperson:
Are members content with schedule 5?
Members indicated assent.
The Chairperson:
We shall now move on to schedule 6
Mr Doyle:
Schedule 6 covers the provisions for group accounts.
The Chairperson:
Are members content with schedule 6?
Members indicated assent.
The Chairperson:
We shall now move on to schedule 7, about which the Committee received communication.
Mr Doyle:
Schedule 7 concerns further provision for charitable and corporate organisations; it covers the miscellaneous provisions relating to charitable organisations. The comment received from NICVA is similar to the point that it made about the charity commissioners: NICVA considers that the duties of the trustees should be incorporated in this schedule. As Mr McGivern said, the Department considers that such guidance should be issued by the charity commission rather than being embedded in the legislation.
The Chairperson:
Are members content with schedule 7?
Members indicated assent.
The Chairperson:
We shall now move on to schedule 8.
Mr Doyle:
Schedule 8 covers minor and consequential amendments to charity-related legislation.
The Chairperson:
Are members content with schedule 8?
Members indicated assent.
The Chairperson:
We shall now move on to schedule 9.
Mr Doyle:
Schedule 9 repeals all previous charity-related legislation.
The Chairperson:
Are members content with schedule 9?
Members indicated assent.
The Chairperson:
It looks as if the light has gone out completely.
Mr A Maginness:
Mr Chairperson, may I ask a question about clause 167? Is it mandatory for charities that have registered elsewhere to register in Northern Ireland?
Mr McGivern:
Yes; even those charities that are already registered with the Charity Commission for England and Wales must, under clause 167, register in Northern Ireland.
Mr A Maginness:
That is all I wanted to know. Thank you.
Mr A Maginness:
Mr McGivern and Mr Doyle, thank you for your assistance today. The task is arduous, but we are getting there slowly but surely.