The current law on cy-près schemes, set out in the Charities Act 1993, does not – in normal circumstances – allow the Charity Commission to create such schemes on its own initiative. Section 13(5) of the 1993 Act obliges trustees of charitable trusts to apply for a scheme in circumstance where “the case permits and requires the [charity’s] property or some part of it to be applied cy-près”. In most cases, cy-près schemes are only made when charity trustees apply for one. Section 16(6) of the 1993 Act (which applies to schemes in general, not only cy-près schemes) allows the Commission to make a scheme of its own volition, but only if “the Commissioners are satisfied that the charity trustees ought in the interests of the charity to apply for a scheme, but have unreasonably refused or neglected to do so and the Commissioners have given the charity trustees an opportunity to make representations to them”.

New Section 14B(2) significantly widens this power, allowing the Commission to make a cy-près scheme whenever charitable assets are applicable cy-près, as “it considers appropriate”. This would allow the Commission to override the wishes of the charity trustees, contrary to the principle, stated in new Section 1E(b) (page 7 lines 3-4) that the Commission should not “be directly involved in the administration of a charity”.

Amendment 121 seeks to rectify this, by stipulating that the Commission’s power in new Section 14B may only be exercised with the consent of the charity trustees.