Charities (Protection and Social Investment) Bill [ Lords ] (First sitting)

Jo Stevens Excerpts

Tuesday 15th December 2015 Public Bill Committees

[Anna Turley]

My hon. Friend makes a really important point. The relationship is long standing, sophisticated and complex. It is right that there is an opportunity to give notice of a warning in the Bill. Our issue is that there is no significant timeframe and no notice of the timeframe. I will explain why that is such a critical issue, but my hon. Friend is absolutely right; it is important that there is a nuanced and balanced relationship and opportunities for both sides to state their case in any dispute.

I will now focus on the amendment. The Bill helpfully ensures that before issuing a warning, the commission must give notice of its intention to do so. However, there is no indication in the legislation of timescales for a warning. The briefing from the commission states that

“the Commission has confirmed it will ensure that a reasonable time for representations is given”.

It continues:

“The timing is likely to vary for warnings in different cases, depending on how much engagement and warning the charity has had during engagement with them, and there may be times when the timescales might have to be relatively short (if, for example, it relates to a time critical incident)”.

It states that operational guidance for its staff will be published. However, this seems very vague and gives total discretion in this situation to the commission. What is a reasonable time? Could that mean a matter of hours or a phone call before a press release is sent out? We know the potential damaging implications for a charity of publicity around the warning.

[Jo Stevens (Cardiff Central) (Lab)]

The problem with the term “reasonable” is that it is subject to interpretation. We can tell from case law and statute that what is reasonable in one circumstance is not reasonable in another. This will create a lack of clarity around the implementation of the Bill. Does my hon. Friend agree that it would be much better to have clarity and specific time limits so that both the Charity Commission and the charities are clear about what the expectation is?

[Anna Turley]

I totally agree. That is the purpose of the amendment. There is a lack of clarity around “reasonable time”. Not only is that pretty indefinite, but it puts the onus back on staff at the Charity Commission, which could place an undue burden on them and leave open to interpretation what the definition of a reasonable time could be. That is why it is important to have a timeframe in the Bill.

Without a timeframe, there might be no opportunity for a charity to prepare a defence or to correct an unconscious mistake, which could be the cause of the warning, or to let trustees know. We might end up in a ridiculous situation in which they could read about a warning for their charity in a newspaper or a sector magazine because, as the Bill is drafted, the Charity Commission can publish the warning. Such a warning, especially if published, could have a substantial impact on a charity’s ability to raise funds and might have significant reputational damage.

It may be felt that a prescribed period of notice is not necessary because the Charity Commission will act reasonably and proportionately. I do not doubt that will always be its intention; I know that the Charity Commission does an extremely good job in difficult circumstances, often with many resource pressures. However, recent experience shows that is not always the case. In a recent High Court case involving the commission and the Joseph Rowntree Charitable Trust, the Lord Chief Justice referred to “ludicrous time limits” imposed by the commission. He also said that he could understand why it was felt that the Charity Commission had behaved in an extremely high-handed manner in that case, and suggested that there should have been

“an awful lot more time spent at the beginning talking, as people normally do, and not issuing ultimatums”.

There is therefore a real danger that the commission, if allowed scope to use this new power in a disproportionate way, may well do so, however well meaning its intentions.

If the power is intended to be used only for low-level matters, a minimum notice period of 14 days is entirely appropriate. It is not clear why there should be any objection to that. For more serious matters where the Commission is able to take more extensive regulatory action, it will be able to use its other powers without notice. That is the existing situation. The Joint Committee on the Draft Protection of Charities Bill recommended that a reasonable minimum notice period to make representations over a draft warning should be clear in the Bill. That safeguard has not been included and the amendment seeks to rectify that.

Moreover, it was clear, even from the Government’s response to the Joint Committee’s report, that a recipient should have an opportunity to make representations on a proposed warning and for these to be considered by the commission before the warning is published. There is no minimum notice period, and it is possible that a recipient will not have a meaningful opportunity to make representations. We know that there have been many situations in which advice and support given by the commission can be challenged and are open to interpretation by the charity.

[Jo Stevens]

A warning could have human rights implications. It might harm a trustee’s reputation, for example, or be in breach of his or her rights under article 8, particularly in the absence of a fair trial, as preserved by article 13. Is my hon. Friend concerned that the Bill has implications for human rights?

[Anna Turley]

I completely agree with my hon. Friend. A later amendment sets out the right of appeal to the charity tribunal, which we think is an important safeguard. Even without that appeal, giving no notice whatsoever could entail significant risks, particularly with regard to reputational damage, as the Human Rights Act sets out.

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[Maggie Throup (Erewash) (Con)]

I am delighted to be able to speak in support of clause 1 of this very important Bill, which strengthens and protects our charities, which play a very important role across our nation. We are stronger for the work that our charities carry out. We would be much poorer as a nation if we did not have our amazing charities and, indeed, I can cite many examples in my own constituency. Millions of people every day rely on charities, and millions of people every day willingly give up their time to volunteer. It is the hundreds of thousands of generous volunteers who really make a difference, and 41% of people reported that they took part in volunteering last year. That is a massive 21 million people across the UK. Trustees play an important role in charities, and in the past I have been a trustee for two different charities. Before being appointed, on both occasions I went through a rigorous selection process that put me under a lot of scrutiny. This is only right, as trustees play an important role. Sadly, we have recently heard some bad news stories about instances in which trustees were not quite as scrupulous as they should have been. That should not happen, as it reflects badly across the whole charitable sector.

The Charity Commission has a wide range of powers, but they need to be strengthened. It is only right that the regulator has the powers that charity users and volunteers expect. Those powers are there to protect the charity, but ultimately they protect charity users, who are likely to be the most vulnerable people in our society. I do not believe that the powers included in the Bill are draconian; they fill a crucial gap. Clause 1 provides an effective way of handling low-level breaches of statutory provisions of the Charities Act 2011. It fills the gap between the existing situation in which the Charity Commission can give advice and guidance and the nuclear option of statutory inquiry. I am sure that every charity will welcome this gap being filled. In effect, it will put a charity on notice, and will help to prevent it from reaching a position where that nuclear option is required without an interim warning.

Clause 1 lays out very clearly the steps that the Charity Commission will have to take if it needs to issue an official warning to a charity or charity trustee. Such clear steps are important for the Commission, for charities and for trustees. I do not believe that amendment 2 is necessary, because the notice period it contains could work against what the Charity Commission is trying to do and what the Bill is trying to do. A lot of evidence could be destroyed in that notice period. As has been indicated, it would not allow time-sensitive issue or breaches to be handled in an effective way.

[Jo Stevens]

The hon. Lady has suggested that if notice of a warning was given, evidence would be destroyed. Are there any examples of that happening?

[Maggie Throup]

I think not only in the charity sector but across the board, evidence can be destroyed or changes made very rapidly, so the provision would begin to undermine the purpose of the Bill, which tries to help charities rather than be too draconian. That is the measure we want to take with this clause.

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[Mr Wilson]

I will come to that exact point in the amendment in a few moments. I hope I can give the hon. Lady some comfort that we are responding to her request.

Let me return to the important safeguards. This measure is the one new regulatory power in the Bill that we and the Charity Commission expect may impact on more charities than any of the other proposed powers. Most of the powers in the Bill are targeted at serious, deliberate abuse of a charity or serious mismanagement putting charity assets or beneficiaries at risk. The official warning power would be used more frequently by the Charity Commission as a more reasonable and proportionate way of dealing with breaches where the risks and impact on charitable assets and services are lower.

The Joint Committee on the draft Bill gave its qualified support to the official warning power, saying:

“We are however persuaded that in principle it would be useful for the Commission to have at its disposal ‘something in between’ guidance and the opening of an inquiry”.

It qualified its support for the official warning power by recommending that several points be addressed in the Bill. The Government accepted all but one of these. The Joint Committee recommended limiting the scope of a warning to a breach of statutory provision or breach of Commission order or direction.

[Jo Stevens]

The Joint Committee was satisfied that the issue of a warning did not meet the further safeguard and appeal to a tribunal. It reached that conclusion on the basis that necessary details were added to the Bill. However, those details are not in the Bill. Will the Minister respond to that point?

[Mr Wilson]

The criteria for issuing an official warning are now clearly stated in the Bill—breach of trust or duty, or other misconduct or mismanagement. These are not as narrow as the criteria recommended by the Joint Committee, but we decided that limiting the warning power to a failure to comply with a limited range of statutory provisions, or order or direction of the Commission, would result in a power that was only half effective at best. Charity law is a mix of statute and case law, and the scope of the warning power needs to reflect that. It would be wrong to limit the warning power to just breaches of statutory provisions or commission orders or directions, as this would limit the regulator to issuing warnings on less than half the legal framework.

I recognise that a breach of duty might not always be completely clearcut, but it is right that the regulator of charities should be able to reach a view on whether a charity’s trustees have breached their duties, and should be warned about their conduct. It would be wrong to expect the Charity Commission to have to open a statutory inquiry and consider exercising its more serious compliance powers in cases where charity trustees have breached their duties but not a specific statutory provision.

--- Later in debate ---

Charity lawyers have told me that they will be forced to advise volunteer trustees in receipt of an official warning that non-compliance will automatically be evidence of misconduct or mismanagement, and that they run the risk of significant regulatory action by the commission. That is not necessarily so in an operational compliance case, since a statutory warning may be issued on the strength of a low-level breach of trust or duty that relates to a disputed area of best practice, which carries no right of appeal to the charity tribunal. That is a significant concern. As the Bill is drafted, the only way to appeal against a warning will be judicial review, which can be extremely costly and protracted and could have a disproportionate impact on small charities in particular.

[Jo Stevens]

The Government have been reducing access to judicial review proceedings, which is another reason why this is of particular concern.

[Anna Turley]

My hon. Friend makes an excellent point. We know that judicial review is pretty much inaccessible without legal assistance, and that cuts to legal aid have had a hugely detrimental impact on people who are trying to access justice.

Community and Voluntary Sector Funding

Jo Stevens Excerpts

Tuesday 24th November 2015 Westminster Hall

[Jo Stevens (Cardiff Central) (Lab)]

It is a pleasure to serve under your chairmanship for the first time, Mrs Moon. I congratulate my hon. Friend the Member for Bradford West (Naz Shah) on securing the debate. We have heard excellent and wide-ranging contributions this afternoon, and I very much welcome the debate. It is important that we discuss the issue, since funding for the community and voluntary sector is at a critical juncture. With the Chancellor’s spending review coming tomorrow, I am sure that everyone involved in the sector will wait with bated breath to see what further cuts he has lined up for local government budgets. The continuous budgetary pressure on local government makes it even harder for the voluntary sector to fund its important work. I have seen in my own constituency the tremendous impact that community organisations have and the growing funding challenge that they face because of cuts to Welsh Government budgets that have to be passed on to local authorities.

I spent some time a couple of weeks ago at Grassroots Cardiff, a small community organisation working with the most vulnerable young people in Cardiff Central. It provides advice, support, creative opportunities and training that help young people between the ages of 16 and 25. In a supportive environment, it promotes self-confidence and development to help vulnerable young people avoid homelessness and drug abuse. It also runs a fantastic weekly Asperger’s support group for young people—the only one that is available in Cardiff and the wider region. I have seen the remarkable work that the organisation does and the positive difference it has made to the lives of young people with Asperger’s.

Grassroots works very hard to function within its means, but owing to the cuts it is really struggling. It has lost local authority funding because of UK Government cuts and faces the prospect of being able to offer only a part-time service. That successful organisation, which has been serving the community in Cardiff Central for decades, is under threat. It is desperate for funds. If it asks for funds from local people, who are already stretched with low incomes and a lack of work opportunities, they will give what they can, but it is a struggle.

In the previous Parliament, under the coalition Government, there were tax cuts for the wealthiest in the country—a giveaway to the people who needed it the least. At the same time cuts were made to the local authority funding that supports and delivers voluntary and community sector provision in villages, towns and cities across the UK. The expectation was then, as it will be once again in tomorrow’s spending review, that ordinary working people will have to foot the bill.

Part of the Conservative party manifesto in 2010 and again 2015 was the creation of the big society. One pillar of that was opening up public services and enabling voluntary organisations, charities and social enterprises to compete to offer public services combined with community empowerment, giving local councils and neighbourhoods more power to take decisions and shape their own area. However, under the coalition Government outsourcing took place on an unprecedented scale, and that is continuing under the current Government. The aim was to create a fairer playing field in which charities, social enterprises and private companies could bid for services, but as we have heard in many speeches today, the harsh reality has been private companies’ share growing, while charities and voluntary organisations have lost out completely.

The other pillar of the big society was community empowerment. The idea of that, as I understand it, was for people to be able to select the community projects they wanted to launch. However, because of the swingeing cuts in public sector funding, people are now forced to choose which projects they want to save, rather than the ones they want to launch. I have seen that happen in my constituency. Several voluntary sector organisations, including Carers UK’s Cardiff branch, ABCD Cymru, which works with the disabled black and minority ethnic community, and Cardiff’s Disability Action group, have had to fold altogether, leaving people without the support they desperately needed.

[Tulip Siddiq]

My hon. Friend has been talking about the notion of the big society. In the more affluent bits of my constituency there is a lot of social capital and invisible capital. The big society has worked there, but does my hon. Friend agree that in the more deprived areas of our constituencies it will not work? We cannot expect people who are choosing between putting the heating on and eating, and whose tax credits are being cut, to volunteer as well and keep up the big society, while the Government crush the roots of local democracy and cut councils’ funding.

[Jo Stevens]

I agree entirely. It always seems that the people who can least afford to give are the ones who are looked to for giving.

Several colleagues have mentioned the Big Lottery Fund. Since 2010 it has supported 74 projects in my constituency, including a deaf youth summer theatre school, the Somali Integration Society legal and welfare advice pilot project, and the Adamsdown day centre’s “Young At Heart” project. The day centre provides an essential service for elderly people who would otherwise have little or no daily social interaction. Its lottery fund money made the difference this year between being able to stay open or closing its doors for good. Seventy-four projects in Cardiff Central have received more than £3.3 million in funding from the Big Lottery Fund. Not only is that funding worth discussing here; it is something that all of us need to protect. I am sure that all the hon. Members present share that view, and I hope the Government will take note of what has been said today and take action urgently to protect a fantastic, hard-working, critically important sector.

Oral Answers to Questions

Jo Stevens Excerpts

Wednesday 21st October 2015 Commons Chamber

[The Prime Minister]

I would agree that of course those things do not lead to peace, and what is required is a peace process to deliver a two-state solution. We will all have seen appalling murders on our television screens—knife stabbings of entirely innocent people in Jerusalem and elsewhere in Israel—and that is completely unacceptable. We need to make sure that this peace process gets going on a genuine basis of a two-state solution.

[Jo Stevens (Cardiff Central) (Lab)]

Q3. Food bank use has risen by 1,665% since the Prime Minister took office in 2010. In Cardiff Central I meet people every week who rely on food banks to feed their families. Does the Prime Minister know how many more families will be relying on food banks as a result of his Government’s cuts to tax credits, and does he care?

[The Prime Minister]

What is happening in the hon. Lady’s constituency is that the number of people claiming unemployment benefit is down 20% in the last year, the youth claimant count has fallen almost 20% in the last year and long-term youth unemployment has fallen in the last year by 38%. That is what is happening. Of course, I do not want anyone in our country to have to rely on food banks, but the right answer is a growing economy, creating jobs, higher wages, the national living wage and cutting taxes. That is what we are delivering and that is how to help Britain’s families.