Charities (Protection and Social Investment) Bill [HL]

Earl of Lindsay Excerpts

Wednesday 10th June 2015 Lords Chamber

[The Earl of Lindsay (Con)]

My Lords, I welcome the maiden speech of my noble friend Lord Bridges of Headley and I congratulate him on his appointment as a Minister. I share with him the experience while on the Front Bench of carefully prepared briefs being shredded by the noble Lord, Lord Williams of Elvel. That is a memory that will not fade.

First and foremost, I welcome the Bill, and in doing so I should declare an interest in having various roles in or links to charitable bodies as listed in the register. In principle, I support any measures that can be sensibly developed to give the public greater confidence in the probity and good governance of the charities they choose to support, and to provide charities themselves with greater protection from individuals who are either unfit to be trustees or who might seek to exploit them. I therefore support the Charity Commission being given new powers to take action when necessary against individual trustees or, where appropriate, against the charities with which they are involved.

Public and donor confidence in the probity and governance of charitable bodies strikes me as essential. In supporting the increased powers that are being proposed for the Charity Commission, I acknowledge at the same time that even with these increased powers, the scale, magnitude and extraordinary diversity of the 160,000-plus charities for which it is responsible will continue to pose a considerable challenge for it, given the resources that it has available—and that is before one considers the large number of unregistered charities, as mentioned by my noble friend Lord Hodgson of Astley Abbotts. The figures are startling. There are probably a third of a million charitable bodies throughout the UK with more than 1 million trustees.

Recognising this continuing challenge for the commission along with the Government’s commitment to a more intelligent approach to regulation and its enforcement, I want briefly to explore an additional, parallel opportunity for improving confidence in the governance of charities and the fitness of trustees to perform their duties. It is an opportunity that I believe could be developed alongside the enactment of the new statutory powers being proposed for the commission. As well as delivering greater confidence, it could assist the commission in enabling it to focus its efforts and resources in a more risk-based manner, and to resort less frequently but more effectively to the exercise of its proposed new powers.

In raising this opportunity, I should declare an interest as the chairman of the United Kingdom Accreditation Service—UKAS—which is the country’s national accreditation body, as it is in this role that I have been involved in exploring a number of different initiatives to promote demonstrable good governance and management in the charity sector. I should add that UKAS, as the national accreditation body, already supports voluntary and regulatory standards across a broad range of policy areas in a way that benefits both the regulator and the regulated. There are therefore some useful precedents in other policy and regulatory areas on which to draw.

Current discussions with a number of relevant parties in the sector are exploring whether agreed standards, underpinned by accredited certification or inspection, might be a useful and robust means by which the quality of a charity’s governance or the calibre of a trustee can be demonstrated to a donor, a regulator, or indeed the public interest. In recent years, bodies such as the NCVO have developed a number of different voluntary standards and codes of practice for the sector, and many charitable bodies have adopted one or more of them. However, given the general need for greater confidence in governance and the calibre of trustees, the current discussions are exploring whether there might be multiple benefits from aligning these voluntary standards more closely with the regulatory requirements and underpinning those certifying the charities for their compliance against them with UKAS accreditation.

It has also been recognised that such an approach might at the same time be an opportunity to address the challenges that many charitable bodies face, such as how the multiplicity of standards, codes of practice and awards makes it difficult for organisations to decide which ones to use. There is a need to identify which standards or marks are valid and meaningful, along with the need for a more coherent and rationalised approach. Such an approach, intelligently designed and configured so that it complements the objectives sought by this Bill and intelligently endorsed so that compliance is recognised and, where appropriate, rewarded by external parties such as the regulator, could have a significant effect on improving the standard of both charities’ governance and trustees’ abilities. It could be value-adding for charitable bodies that choose to be certified as having adopted the relevant standards. It could increase public, regulatory and donor confidence in certified charities, and assist the Charity Commission by enabling it to better direct its efforts and resources to where there is the greatest need for oversight or intervention, thereby making it a more robust regulator. It could also reduce the need for costly legal action.

While potentially having a significant impact where it matters most, such an initiative could none the less remain entirely voluntary. It would be largely owned and driven by the sector, and it could be managed so that the bodies for which it is not relevant do not feel compelled to participate. At the same time, a more robust and better-recognised standards-based option, underpinned by accredited certification, might be helpful in respect of the large number of charities that are not registered with the Charity Commission, and obviously to the large federated charities.

As I said at the start, I fully support the Bill and the proposals that it will bring forward, but I believe at the same time that there may be an opportunity to develop a credible regime of voluntary, well-designed, sector-owned standards, underpinned by accredited certification that will, in conjunction with the provisions of the Bill, help to address the concerns surrounding governance in the charities sector.