Charities Bill [HL]

Lord Stevenson of Balmacara Excerpts

Wednesday 7th July 2021 Grand Committee

[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, I refer to my charitable interests as outlined in the register, and I would also like to share with the Committee that I have worked with charities for most of my life and have some experience of large ones and some smaller ones. This has informed what I want to say today. I am grateful for the briefings we received, the Library produced a very good note and the NCVO and other organisations pulled together some helpful thoughts.

The Minister said that the Bill is seeking to make a series of changes that will make it easier for charities to navigate the law and carry out their functions effectively while retaining important safeguards. We broadly support what she says on this. The Bill does achieve that, although it has taken a long time to reach the point where we can see it turning into law. I hope that making it easier for charities to amend their governing documents, dispose of land and use their resources more effectively will be a useful change to the work that goes on, day in, day out, across the country in all our various wonderful charities.

However—I think I picked this up from contributions already made—I wonder whether the Bill goes far enough. In some senses, we seem to have the worst of both worlds. We have a relatively weak regulator, which is heavily burdened and not well resourced to do the sort of job it has. It has had, it could be said, a pretty poor reputation in recent years, although it has improved. The Bill is a missed opportunity to rectify some of those issues, but it is wrong to try to change too much in this Bill—we probably do have to wait for another opportunity—but I think we will regret that. The noble Lord, Lord Hodgson, and others have pointed out some of the issues that still need to be addressed.

I have only a few small points to make about the detail, but I think they will be picked up in Committee. I am a bit surprised that we still have a number of different modes of operating charities. This raises issues in itself, although there are one or two that catch the eye more than others. I am referring here to royal chartered bodies, which are also charities. There is a case for considerable overregulation, and it is no longer the case that royal charters are providing the sort of support and ring-fencing they perhaps would have done before. The classic is the BBC, with its royal charter and charitable functions underlying all it does, yet it is subject to regular approaches by Governments of all parties, but primarily Conservative Governments, and does not seem to get the protection that its charitable status might once have suggested. There is nothing in this Bill that would allow us to look at that, but it needs to be picked up at some point as we go forward.

The second point is on fundraising: the Bill does a good job in introducing greater flexibility for charities with regard to fundraising appeals, the way the Bill sets out what happens if a fundraising appeal is either too successful or too unsuccessful will help move forward and cy-près has already been mentioned by a number of speakers. However, the supporting documentation states that there is a need to monitor the process going on here, and we may have worries about how this is going to operate in practice. I could not see how that was going to be done in practice. I wonder whether when she responds the Minister could mention that and explain what is intended.

Enough has been said on permanent endowments; I do not need to go into that. The power to use permanent endowments to make social investments is a really important change in the way we are going forward, and others have mentioned that as well. The new power moves a long way towards where most charities would want to be, which is not being tied to the value-for-money constraints that have so often bedevilled what they have wanted to do, but it does not go far beyond where they might want to get to. It does not go further down that line, in the sense that it does not raise too many dangers. Monitoring will be important here, and, again, it would be useful if the Minister could respond on that point.

I have a very minor point on ex gratia payments: when I read the Bill the first time, I was a little struck by what exactly is going on here, and I still do not quite understand the argument that says this allows charities to honour moral obligations. I do not think moral obligations feature in much of the law of the land. Morally, we are probably wanting to do lots of things, but we are restrained by the law of the land and other conventions. Again, when she comes to respond, could the Minister explain where this fits into the great scheme of things, perhaps giving us some examples of where moral payments might be a useful addition to the range of things for which trustees have responsibility? I am not against it in principle; I am just a bit confused about where it will take us in the great scheme of things.

On the payment of trustees, if I recall correctly, the original report by the noble Lord, Lord Hodgson, called for quite a radical change here: that the professionalism that could come from paying trustees should be considered. It is not in this Bill, and indeed was not accepted by the Government, but it is an important issue and should not go away. Payment for goods provided by trustees to their charities, where that is properly protected, above board and perfectly transparent, must be perfectly acceptable. There is a broader question about whether or at what point we should professionalise trustees and their role, particularly in the bigger charities. A charity with which I am involved is based in America and regulated under its rules, and there it is perfectly normal for trustees of charities to be paid and, indeed, for the chief executive of the charity also to be a trustee. It is a bit of a shock if you come from the British system and work on the American system. I am not saying that I necessarily think it is the right thing for all charities, but if it works well in one country—one territory—and serves the purposes of what they achieve by charitable objectives, it may be worth looking at.

Finally, on the issues that were rejected by the Government, even though they were accepted by the Law Commission, the noble Lord, Lord Hodgson, has made a good case about seeking the permission of the Attorney-General. I look forward to seeing that when we come to Committee and to supporting him if he chooses to table an amendment in the way he has suggested.