OSCR proposals would hit small charities, Society warns

Small charities would face an "undue burden" of greater administrative under proposals being consulted on by OSCR, the Scottish charity regulator, according to the Law Society of Scotland.

Under the proposed changes, a number of new questions would be included in the annual return that all charities have to complete. Charities would have to answer a number of sections depending on their income level, with the lowest income threshold being set at £25,000.

The Society believes this is too low for the level of information being required, and would place too great a reporting burden on smaller charities. It argues that the threshold should broadly reflect the level of income a typical charity would be likely to have with at least one full time paid member of staff.

Stephen Phillips, convener of the Society’s Charity Law Committee, said: “We are supportive of any measures which aim to improve public trust and confidence in charities. however there is a risk that these new measures will place an undue burden on charities, smaller ones in particular."

He added: “We would also call for further guidance from OSCR on the reasoning behind some of the proposed questions – as the way in which some of the questions are posed could give a misleading impression that certain approaches are considered best practice for every charity, which is not necessarily the case.”

The proposals also consider the introduction of a serious incident reporting obligation on charities, meaning that charities would be obliged to report every instance of fraud or theft, amongst other matters, to the regulator, no matter how small.

Mr Phillips said: “Issues such as fraud and theft are matters for the police. If a serious incident occurs then self-evidently the charity should take steps to try and ensure it does not happen again, but we would question whether reporting such incidents to OSCR is always appropriate.

“We would certainly suggest that if a serious incident reporting regime is to be introduced, then some further consideration should be given to the question of what constitutes a serious incident, taking into account the diverse nature of charities, their activities and scale."

He also warned that unless OSCR was able to provide the necessary support for charities reporting incidents, the process of gathering statistics on serious incidents "may have the effect of decreasing public confidence in Scottish charities – contrary to the strategic aim behind these new proposals".