Legal & Regulatory
Government 'considering' Hodgson charity law review
Lord Hodgson's recommendations in his long-awaited report, submitted on 16 July have been heralded as 'positive' but, if enacted, could raise issues of public trust and confidence.
Further to our May 2012 story “Charities Act report from Lord Hodgson expected July 2012’[i], the completed review, Trusted and independent: Giving charity back to charities ,[ii] has now been submitted to Minister for Civil Society Nick Hurd and has been broadly welcomed by the main charity umbrella bodies.
A detailed analysis of the review has been provided by Stone King’s Jonathan Burchfield – see ‘The Hodgson Report revealed’.[iii]
The more controversial recommendations (which most don’t see the government adopting) include:
- Allowing ‘large’ charities with incomes of over £1m to pay trustees. NCVO’s open letter to Nick Hurd makes the point that this raises a significant risk to public trust and
- Making it easier for charities to invest in social enterprises by scrapping the requirement that charity investments have to maximise profit (note the whole SRI debate on this very point was covered in the Caritas SRI Round Table in September 2010 )
- Increased administrative burdens on charities in the form of a requirement to publish more information about their income and activities. NCVO chief executive Stuart Etherington observes: “"The proposal to introduce fees for registering new charities and filing annual returns is also a step in the wrong direction – in these difficult times it is counterproductive to put more obstacles in the way of charities being created when they are often best placed to address a wide range of societal challenges. It is also wrong to be charging existing charities at a time when they are under huge financial pressure.”
Charities Aid Foundation chief executive John Low was welcoming of the investment proposals: “Charities are facing a financial squeeze because of the economic downturn and ever increasing demands for their services. Our analysis of the latest charity accounts filed during 2012 shows a real terms fall in income. "It is essential that we do everything we possibly can to cut red tape and remove any bureaucratic burdens to make it easy for charities to carry on their vital work. Lord Hodgson’s recommendations will free charities from some unnecessary bureaucracy and help encourage social investment in projects for the public good." CAF had recently celebrated the first anniversary of its Social Investment Fund.
Nick Hurd said: “"We welcome Lord Hodgson's report and all his recommendations will be carefully considered."
[i]http://www.charitiesdirect.com/caritas-magazine/charities-act-report-from-lord-hodgson-expected-july-2012-1130.html
[iv] http://www.ncvo-vol.org.uk/sites/default/files/nick_hurd_letter_payment_of_trustees_final.pdf
