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

Robert Jenrick Excerpts

Tuesday 15th December 2015 Public Bill Committees

[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.

[Robert Jenrick (Newark) (Con)]

Does my hon. Friend acknowledge that most regulators in other spheres have the power to issue warnings without notice? For example, the Financial Conduct Authority has those powers for precisely the reasons that she has just given.

[Maggie Throup]

I completely agree with my hon. Friend. That is probably why the measure is in the Bill. It mimics what is happening across the board with other regulators.

--- Later in debate ---

[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.

[Robert Jenrick]

The hon. Lady is making a good point. Doe she agree that perhaps the best way to tackle that problem is through guidance from the Charity Commission? If the Care Quality Commission issues a warning, there is no formal way to appeal against it, but in the guidelines there is a 10-day period in which representations can be made to the CQC, which happens all the time. Then the CQC, having read the representations and at its discretion, can withdraw its warning.

[Anna Turley]

The hon. Gentleman makes an excellent comparison, but what happens if, at the end of that representation, the Charity Commission does not agree? Where is the right of redress or recourse after that? Judicial review is too large, bureaucratic and expensive. It is a complex, time and resource-intensive activity that is largely inaccessible without legal assistance. It is widely known as the remedy of last resort for public body decisions when all other avenues of appeal have been exhausted.

There may be a perception among the public that charities should not use their funds to pursue judicial review applications, in particular in the light of some of what we have seen in the media in the last few days about how charities spend their money, which goes against the grain of what we are trying to encourage. It has been said that if it were possible to appeal against a warning, the commission might be reluctant to issue warnings full stop, as there would be a risk that appeal after appeal would gum up the system. This implies an awareness that judicial review is not really a remedy, as it so much more costly, complex and inaccessible than an appeal to the tribunal. In any event, research suggests that of the 103 inquiries opened by the commission between April 2014 and April 2015, no more than 5% were appealed to the tribunal, which is not a significant proportion. If the warning power is meant to be only for low-level issues but could precipitate adverse publicity—we have already discussed that at some length this morning—and the exercising of the commission’s protective powers, it is illogical that it should be more difficult to challenge than the exercising of the commission’s more extensive regulatory powers, such as the power to remove trustees, which can be challenged in the tribunal.

It is also worth noting that there seems to be confusion over whether the warning power can be used for low-level or medium-level concerns. When the power was first suggested, the Cabinet Office said that it would be for medium-range abuses, for which the commission’s protective powers could be used but it is not likely to be proportionate to do so. Yet the explanatory notes to the Bill say that it will be used where the risks are relatively low. There is still a huge lack of clarity about the difference between a medium-range and a low-level concern. The possible implications of a warning, as we know, are harsh for low-level matters, so it is important that charities have a right of redress and recourse to a tribunal. Without it, they might be unable to disprove what could potentially be false allegations. We also want to ensure that the Charity Commission considers warnings extremely seriously before issuing them.