INDEPENDENCE OF CHARITY COMMISSION
Amendment to Charities Bill clause 6, omitting new s1A(3)
Main Points
The Bill has the effect of preserving the status the Charity Commission now has as a Government department. This is quite wrong. The Commission does not fulfil functions on behalf of Government. It should not therefore be part of Government, but independent of it, clearly, legally and visibly on the face of the Bill.
The Commission is not even a regulator implementing Government policy on an independent basis. Its responsibility for delineating the scope of charity – that which is in the public interest – demonstrates this. The Commission is rightly made accountable to the Charity Appeal Tribunal and the courts under the Bill.
The Commission has powers to maintain the integrity of charities and public confidence in them. Charities serve the public interest, which is not the same as government policy. The Commission will be better able to win public confidence if it is manifestly independent of Government.
The Commission must hold charities to their obligations. In a world where Government, rightly and commendably, relies more and more on charities as partners in the delivery of public services the risk to their independence is increased. The Commission must be free to uphold this.
The role of charities in contributing to public debate is vital. They have first hand experience of the most difficult issues of public policy. Their role includes lobbying and political campaigning. It is equally vital that the Commission should be free without fear or favour to draw the difficult line between proper use of this right and illegitimate political activity. And it is especially important that it should be free to defend charities which properly criticise Government.
The Scrutiny Committee called for Commission independence. In its response the Government asserts that departmental status is right, without giving any reasons. Non-Ministerial Department status, although giving the Commission responsibility for the use it makes of its powers, is not sufficient guarantee of independence; nor are Ministerial undertakings given during the passage of the Bill – they will depend on the will of the Government of the day. This amendment provides the only adequate guarantee of Commission independence.
The question arises as to what status the Commission should have. There is no exact model – the Commission is both an extension of the courts and an independent regulator. NDPB status is inadequate – that is suited to bodies implementing government policy at arms length from government. The NAO offers the nearest parallel, serving the public interest through Parliament.
The Amendments
The amendment to clause 1A(3) is the principal amendment designed to achieve the independence of the Commission as described above.
The addition of the new para (3A) is intended to avoid casting any doubt on the ability of the Commission to give Government advice by ensuring that the Commission’s general function set out in new section1C(2)6 is not affected. It is clearly desirable that the Government should be able to call on the Commission’s expertise on charity matters, so long as the Commission’s independence is safeguarded.
The replacement of para 5 of the new schedule 1A is modelled on s3 of the National Audit Office Act 1983. It removes Government control over the terms and conditions of Commission staff while retaining their eligibility for the civil service pension scheme. This is necessary to enable the Commission to determine the staffing it needs.
Resourcing the Commission
The Bill appears to be silent on the issue of funding the Commission, presumably on the basis that it is established as a Government department and as such special funding authority is not necessary. If the Commission is to be a body separate from Government specific provision will need to be made in the Bill for its resourcing. S4 of the NAO Act provides that its expenses are ‘defrayed out of moneys provided by Parliament. That may be the appropriate model, though the NAO Act makes the NAO subject to the Public Accounts Committee and the PA Commission specially set up by the Act, for which there is no parallel for the Charity Commission.
Detailed Issues Covered in Schedule 1A
Appointment of Commission members – a key issue is whether members of the new Commission should continue to be appointed by the Home Secretary as Commissioners are now. There are good arguments for removing this power from the Government if the Commission is to be truly independent. The NAO Act sets up a special Parliamentary Commission for this purpose. This is an attractive model and there is a good case for setting up an equivalent for the Charity Commission. This could best be achieved by providing that the Commission should have its own Parliamentary Committee, on the lines of the Public Accounts Committee which the NAO serves. This may however be too elaborate; and the NAO analogy is not close since the Charity Commission does not serve Parliament in the way the NAO does. Other appointment possibilities might be Crown appointment, but that is on the advice of the Government and would not distance the appointments significantly; or, as is the case for the Commissioner for Public Appointments, Privy Council appointment, but OCPA is an altogether smaller body established under Order in Council. On balance it seems acceptable to leave responsibility with the Home Secretary if the statute guarantees Commission independence, on the basis that responsibility for appointments to many independent public bodies rests with the Government and OCPA guarantees their integrity.
Members’ terms of appointment – para 2 already changes the position of members of the Commission, ensuring that they are not civil servants, in contrast to existing Commissioners (whose position is saved by para 2 of schedule 2).
Annual Report – it is arguable that the requirement in para 10(1) that the Commission should report to the Home Secretary and itself separately lay the report before Parliament makes the Commission inappropriately accountable to Government. This could easily be achieved by omitting the words ‘to the Secretary of State’ so that the Commission was simply required to publish a report (and lay it before Parliament). But on balance it may be unnecessary to go that far on the basis that the guarantee of Commission independence prevents the Government from interfering with the Commission through its annual report.
National Audit Office
In looking for a model for a public body independent of Government the NAO has many attractions. But, as discussed above in relation to specific issues, it is not an exact parallel. The NAO serves Parliament directly, whereas the Charity Commission serves the public interest at large. The approach adopted in the amendments, and reflected in these notes, is therefore to create a model specifically for the Commission, drawing on the NAO model where this seems helpful.
The Government’s Position in Response to the Scrutiny Committee
The Scrutiny Committee’s report dealt at some length with the issues of Commission independence – paras 175-180. It recommended the removal of the expression ‘on behalf of the Crown’ and a clear statement of Commission independence, as intended by these amendments.
The Government’s reply, para 17, rejects the report’s recommendation but without convincing reasons. It argues that the Commission has long held Non-Ministerial status; that it is, and will remain, an independent regulator ‘completely free from any Ministerial control over the exercise of its statutory powers to regulate charities’. It reaffirms the present Government’s belief in the ‘paramount importance’ of the Commission’s independence. None of this justifies, or even convincingly explains, the Government’s refusal to change the Bill in the light of the arguments accepted by the Scrutiny Committee.
Position of Existing Commission Staff
Commission staff who are at present civil servants may well be concerned at the prospect of any change to their position. The Bill could give them specific protection, though their position would presumably be covered by TUPE.
