One-door regulator for charity sector

Responding to the Report of the Scottish Charity Law Review Commission, Justice Minister Jim Wallace said the changes would provide the “one-door regulator that the charity sector had lacked for years”.

He added that the reforms would benefit charities across Scotland by providing better support. It would also give improved protection for the public from bogus charities.

The main features of the new reforms are:

• That Scotland should benefit from an updated definition of charity, consistent throughout the UK
• A comprehensive register of Scottish charities which will contain only those charities which are active and will have more information about them
• A regulator, provisionally entitled the Office of the Scottish Charities Regulator (OSCR), embracing the functions of registration, monitoring and supervision, investigation support and information – (charitable status will be granted by a unit within OSCR, run by the Inland Revenue.)
• A new reporting and monitoring regime , based on annual submission of reports and accounts but graduated to take account of different sizes of charities. OSCR will liaise with other regulators (eg Communities Scotland) whose remits cover charities to minimise duplication of effort
• OSCR will provide comprehensive advice and guidance relating to regulatory matters and, working closely with the sector, will signpost other sources of advice such as codes of practice.
• OSCR will encourage and facilitate better arrangements at local level for public charitable collections

The Minister said:

“This is a radical strong package of reforms that will help Scotland’s charities. We will be investing over £1 million a year in a new Justice Agency, the Office of the Scottish Charities Regulator.

“The new agency will transform the way charities are monitored and supported in the public interest. It will add capacity and cohesion to regulatory functions which until now have been fragmented.

“It will give the public greater protection from bogus charities and and will allow people to donate with greater confidence.

“It will provide the one-door regulator that the charity sector has lacked for years. The Executive looks forward to working with the major stakeholders, including SCVO and members of the advisory forum, to put these important developments in place.

“Some reforms will need legislation and an opportunity will be sought for this: but it is in the best interests of charities and the public for us to press ahead with the package of measures we are announcing today.”

The Scottish Charity Review Commission (McFadden) published its report together with 114 recommendations in April 2001.

A national advisory forum, including voluntary sector organisations, key professionals and the existing regulatory bodies, was set up to advise Ministers on the practical aspects of implementing the recommendations of the McFadden Commission with a view to deciding on the best way of proceeding.

The forum’s discussions turned out to be wide-ranging and not confined to implementation details and helped the Executive to understand the issues involved in the many aspects of charity regulation.

Responding to the announcement on Charity Regulation in Scotland by Justice Minister Jim Wallace, SCVO’s associate director, Stephen Maxwell, said:

“SCVO has campaigned for ten years for a coherent regulatory framework for the voluntary sector. By accepting the case for charity law reform, the Executive has moved us closer to that goal.

“But its statement of intent falls short of committing to legislation which would deliver a new definition of charity based on public benefit, a statutory independent regulator supported by an accessible appeals procedure, and limit charitable status only to bodies independent of government.

“We welcome the announcement today of practical steps towards a new system and remain committed to persuading the next Parliament of the need to enshrine the public benefit definition of charity in Scots law, and to establish the regulator independently of political influence. The Executive has acknowledged that reform will require legislation and we will be urging that a Bill encompassing these points be a priority for the next programme for government.”

Last month Jackie Baillie introduced a members debate on a motion calling for a Charity Bill in Scotland.

In her speech she argued that charities are not supported by the current complicated and archaic legal framework of charity law, in particular how the definition of charity does not fit in with the modern public perception of what a charity is.

Hugh Henry, deputy social justice minister, hinted at the possibility of a shift in Executive policy during the debate. He said: “There might be a further review of proposals to put the register of charities on a statutory footing in order to extend the regulator’s powers, which might include the power to grant charitable status.”