Forum Brief: Charity law review

The government has put forward radical proposals for an overhaul of charity law.

A report published by Tony Blair's Cabinet Office-based Strategy Unit called for radical new types of charities and social enterprises, better information for the public and modernisation of the role of the Charity Commission.

Consultation on the plans will now continue.

Forum Brief: Charity Commission

Rosie Chapman, director of policy at the Charity Commission, told ePolitix.com: "This week saw publication of 'Private Action, Public Benefit', the Cabinet Office's review of the law and regulation of the not-for-profit sector. Issued as a public consultation document, the review's 61 key recommendations form a detailed and wide-ranging review, affecting charities, which constitute the majority of the not-for-profit sector.

Taken as a whole, the review sets out a useful package of modernisation proposals and makes recommendations for legislative and regulatory changes in a number of key areas. These include, for the first time, a statutory definition of charitable status; a new legal form for charities (the Charitable Incorporated Organisation); the removal of trading restrictions; a new licensing system for public collections; new self-regulatory arrangements designed to improve standards of practice in fundraising; and improvements to charity reporting which will lead to greater openness and accountability on the part of large charities. It also seeks to remove obstacles to mergers and other forms of collaborative working, and to ensure that those charities that are not currently registered with the Commission are properly regulated in future.

If the review is implemented in substantially its current form, virtually all charities will be affected in one way or another. We hope that the review will be widely read and debated within the sector - a debate in which we will be playing our full part. And this is a key debate because the review, and the proposed legislation that could follow it, will update the legal framework in which the sector operates and will allow us to develop further as a modern regulator.

In common with many other voluntary sector commentators, we welcome the report. We feel it will help promote public confidence in charities and across the wider not-for-profit sector. Freeing up the regulatory and legal framework of the sector allows us to build on the strengths and recent success of our own modernisation and development programme. The progress we've made, which has been recognised by bodies including the National Audit Office, is aimed at realising our vision of the role of a 21st century regulator and promoting the health and vitality of a robust and independent voluntary sector.

The Strategy Unit's consultation sets out to modernise charity law and regulation, to reduce bureaucracy and restrictions for charities, and to make charities more accountable to donors and the public. It also reinforces the Commission's role as the regulator for charities in England and Wales.

As an independent regulator we are free to respond frankly to the report. We will consider our response to the proposals in due course and will highlight those recommendations we welcome, alongside any which we feel need further development or re-examination.

There will be a lot of detail to be filled out over the next few weeks and months as the report is analysed and the recommendations are discussed. But they mark a clear starting point for achieving the aim of promoting the vitality and the independence of the sector, helping charities in their work and enabling us to continue to regulate them effectively in the public interest."

Forum Brief: Royal National Institute for the Deaf

James Strachan, chief executive for RNID, told ePolitix.com: "This report is a major step forward in redefining the boundaries and function of the voluntary sector for the 21st century. Crucially, it challenges the sector to be clear about its performance and impact on those it serves.

"Preserving the independence of the sector is vital. At the same time, so is the development of more effective partnerships with government to help shape and deliver public services.

"Increasingly, charities need to understand that these two approaches are not mutually exclusive.

"We welcome the extension of the public benefit test and the recognition that the sector has moved to tackle new forms of exclusion and disadvantage.

"It is also vital to encourage the sector to become less risk-averse and more entrepreneurial. Therefore, we specifically welcome relaxing the rules around mergers, the raising of development finance, and the ability for the sector to trade.

"This report vindicates recent proposals to reform the guidelines on charity campaigning. The campaigning role of the sector remains crucial for a healthy democracy. This move confirms and endorses charities' role as campaigners for the public benefit."

Forum Response: The Depression Alliance

Jim Thomson, director for the Depression Alliance, told ePolitix.com: "These definitions of what is and what isn't charitable are hundreds of years old and of doubtful relevance to a modern, fast-moving not-for-profit sector.

"Sometimes people lose sight of the fact that it is the donor's money, entrusted to us to use in the most effective way to meet the need they have given to. A responsible attitude to how we ask for that money, coupled to greater accountability in how it is spent, can only benefit us all in the long term."

Forum Response: Help the Aged

Hilary Carter, spokeswoman for Help the Aged, told ePolitix.com: "Help the Aged welcomes these new proposals as being grounded in common sense. They clarify the role that charities play within public life, set new standards for transparency and effectiveness as well as removing unnecessary red tape."

Forum Brief: The Guide Dogs for the Blind Association

Geraldine Peacock, chief executive of the Guide Dogs for the Blind Association, told ePolitix.com: "I do welcome this report, as I think it will usher in a whole new era for the not-for-profit sector. It promises an end to the currently-fudged issue of whether charities should also be businesses and we should see a shift in perceptions of the sector from our being 'cap-in hand' to being enterprising and sustainable.

"I also particularly welcome clarification offered by the report of the role of the Charity Commission and of the need to properly recruit, train and support trustees, although measures to enable trustees to take time off work, in much the same way as school governors and jurors do, would have been an important step forward.

"And the public benefit test is very significant. It will mean that the way in which charities work will be simpler, clearer, more transparent and easier for everyone to understand and that should give a major boost to public confidence."

Forum Response: The National Deaf Children's Society

Mark Astarita, deputy chief executive for NDCS, told ePolitix.com: "The National Deaf Children's Society is delighted to see that many of the proposals contained within the report reflect recommendations that we made to the government.

"The relaxation on trading is very exciting news. It gives us an opportunity to access funds without the bureaucracy of setting up a trading company.

"The government has been very wise in giving us the opportunity to self-regulate, but it is slightly unfortunate that they are talking about raising a levy, I would have thought the government could continue to fund this.

"However, I am glad that the government has had the courage to insist on a public benefit test - which will be to the greater good of society as a whole. On top of this the report's proposals will encourage charities to play a more campaigning role, which is important in an active and healthy democracy."