Charities Bill [HL]

Lord Bilimoria Excerpts

Wednesday 7th July 2021 Grand Committee

[Lord Bilimoria (CB) [V]]

My Lords, on this Charities Bill, I declare my various interests as a trustee of charities, including the National Bereavement Partnership, the British Cardiac Research Trust and the Cobra Foundation. This Law Commission Bill makes a number of technical changes to charities law. The commission has said that

“uncertainties in the law and unnecessary regulation can disrupt charities’ activities, discourage participation and force charities to obtain expensive legal advice.”

These recommendations will simplify the regulation of charities and yet maintain the important safeguards for how they are run. The Government have welcomed the Law Commission’s report and recommendations; in fact, they accepted 36 out of 43 of those recommendations.

In its fantastic—as usual—briefing, the House of Lords Library summarised the changes as being

“to simplify the law around … changes to a charity’s governing documents … payments to trustees in certain circumstances for goods and services provided … using funds for ex gratia payments or using funds obtained in connection to specific fundraising campaigns for other purposes—

these are the cy-près powers that the noble Baroness, Lady Greengross, spoke of—

“utilising permanent endowments … and disposals of charity land.”

To put this into context, there are almost 170,000 registered charities in England and Wales, which now generate an income of approaching £100 billion. There are 700,000 individual trustees, and charities play a major role not just in society but in their huge contribution to our economy.

As the briefing explains, the Government have also acknowledged that charities legislation is

“commonly perceived as being complicated, uncertain and in places unduly burdensome”


and that this

“can disrupt a charity’s activities, discourage people from volunteering to become trustees and force charities to obtain”

legal advice, which is often expensive. The Government believe that this

“negatively effects the Charity Commission’s ability to regulate the sector.”

The Government have said that the changes will

“improve the efficiency of the sector, release more funds for use on charitable purposes rather than administration, and reduce unnecessary and overly bureaucratic regulation that not only increases the sector’s costs but also is a factor in discouraging people from volunteering to become trustees.”

The Law Commission highlighted the important balance between regulating charities and ensuring that they have the freedom to act in the best interests of their abilities and in the public interest. In a debate in May, the Minister, the noble Lord, Lord Wolfson of Tredegar, one of my university contemporaries, stressed the importance of protecting and regulating charities:

“Charities occupy a special place in our society, and the law should both protect and regulate them. The reforms that we introduce will remove or replace inappropriate and unnecessary burdens while safeguarding the public interest in ensuring that charities are properly run, so that charities will have more time and more resources to spend on their charitable objectives.”—[Official Report, 18/5/21; col. 471.]


The Minister, the noble Baroness, Lady Barran, said in response to the Law Commission’s recommendations:

“Ensuring that there is a modern, strong and flexible legal framework for charities is just one element of the Government’s work to create a more effective, sustainable and impactful charity sector. As the Secretary of State for Digital, Culture, Media and Sport commented in a recent speech, ‘there is huge power in civil society, and that it should be the government’s job to unlock it—not try to replace it, or end up stymying it.’ The Government will steward the sector, unlock new types of resources, from encouraging philanthropy”—


which I will come to—

“to leveraging finance, empowering volunteers to keep supporting their communities, and build a compelling picture of the enormous value that charities contribute to our economy and society.”

She could not have put it better.

Until June last year, I had the privilege for five years of chairing the advisory board of the Cambridge Judge Business School, one of the finest business schools in the world. While I was chairman I helped to found and establish the Centre for Strategic Philanthropy, based at the business school and the university, thanks to the benefaction of Badr Jafar, an alumnus of Cambridge University. The Centre for Strategic Philanthropy within the University of Cambridge Judge Business School is dedicated to enhancing the impact of strategic philanthropy both within and from global growth markets. Through a combination of rigorous research, executive education and the convening of diverse voices, the centre aims to become the leading hub of actionable knowledge to catalyse greater philanthropic impact from the world’s fastest-growing regions. It is headquartered in the UK at Cambridge, one of the finest universities in the world. The UK is seen as the headquarters of charities and charities expertise.

I quote Badr Jafar, the founding patron of the Centre for Strategic Philanthropy:

“Today, well over a trillion dollars of private philanthropic capital, more than triple the annual global development and humanitarian aid budgets combined, is deployed every single year. The evidence is also overwhelming that the world’s emerging economies are becoming an increasingly powerful source of philanthropic capital and social innovation. With the impending generational transition taking place around the world, now is the time to start building the cross-border networks that will empower the next generation of strategic philanthropists emerging from these markets, to question our own assumptions, and to facilitate the development of imaginative new solutions to some of the world’s greatest social and environmental challenges.”


This is huge. This is important not just for us here in the UK but globally.

Last year, at the beginning of the pandemic, I was privileged to become a trustee of the National Bereavement Partnership right from its beginning. It has carried out inspirational work throughout the pandemic. We have an inspirational CEO, Michaela Willis MBE. When I asked for her and our trust’s views on the Bill, she said that the National Bereavement Partnership believes that the Bill’s recommendations appear to be sensible, and that there has to be a certain amount of public scrutiny to keep the checks and balances in place regarding charity behaviour. We wholeheartedly agree that simplifying the law could apply to us. The charity’s governing documents need to be less laborious. Payments are made to trustees in certain circumstances for goods and services provided as, in some cases, that can be where the expertise and knowledge lie. It is a false economy to look for services elsewhere than might not be up to speed on the subject matter. The charity emphasises that it should be in certain circumstances, so it is practical.

Using funds for ex gratia payments is a particular barrier when it comes to volunteers and needs to be addressed. On specific fundraising campaigns for other purposes—the cy-près powers—it is important that there is project-specific funding, but it is not always the case that the piece of work concludes in the way it should or is planned to. In these cases, there should be the flexibility for funds to be transferred to a piece of work as close as possible to what they were donated for, within reason.

Charities provide a unique service. They are fundamental to society. They need to be regulated but also to be protected and cherished. Without them, much expertise would be lost. There must be a balance. Charities must be open, honest and accountable. Their accounts must be managed, audited and published for public scrutiny. On the flipside, charities need not be constrained by unnecessary legal burdens.

The National Bereavement Partnership has made a difference to the emotional well-being of callers—that is, the people who call in with very sad and tragic situations. It provides emotional support and therapeutic intervention, and is a conduit between other services, enabling long-term well-being. It adds value to NHS services, saving the Government money and keeping people out of the mental health system.

I conclude that the British charity sector is a jewel in the crown of our country. However, it is also a manifestation of the amazing spirit of benefaction among the British people. I will never forget my friend Sir Andrew Cahn once telling me something; he is the chair of WWF-UK, of which the Duke of Edinburgh was president for many years. Sir Andrew said that the WWF raises—well, the latest figure would be approaching £100 million a year. He said, “Did you know, Karan, that the vast majority of this money is not millions of pounds donated by big institutions and companies, but £10 and £20 in direct debits that individual citizens in this country donate, for animals in parts of the world where they will never go? They will never see those animals or meet the people who benefit from this charity”. That is the amazing British charitable spirit. It is that spirit that makes this country so amazing, and it makes our charities so incredible, amazing and phenomenal.