The Government?s attempts to reform charity law have moved forward this week with the publication of a draft Charities Bill. At the heart of the Bill is a re-definition of charity, basing it on the principle of public benefit in an attempt ?to align the legal definition of charity with the popular understanding of what is, or should be, charitable.?
Twelve new purposes have been established for charities, including ?the advancement of culture, arts, science and heritage?. A new charity will need to show that it will fulfil at least one of the twelve purposes and also that it has been established for the benefit of the public. Other reforms set out to reduce the bureaucratic burden on charities: the threshold for company registration will be raised from £1,000 to £5,000 a year, and the minimum turnover requiring companies to have accounts audited has been raised to £1m.
Stephen Lloyd, Chair of the Charity Law Association and Head of Charity and Social Enterprise at Bates, Wells and Braithwaite solicitors said, ?This is once in a generation reform and the participation of charities at this draft stage is vital. The changes will encourage arts charities to reflect on their activities through the prism of their charitable acts. Arts organisations will need to recalibrate some of their thinking to establish their public benefit and value to society.? He went on to call for the drawing together of charity legislation in a clear and unambiguous form, ?The Bill will be drafted in reference to previous Acts and if the law is to be clear and not opaque, a consolidation Act will be required.?
A new joint committee of peers and MPs, chaired by former Health Secretary, Alan Milburn, has been established to scrutinise the new Bill. Its attention will focus on how the Bill will improve public confidence in charities while balancing flexibility and accountability. It will also examine changes to the Charity Commission and consider the possibility of establishing a tribunal to which Charity Commission decisions can be referred. Additionally, the committee will investigate legislation on charity trading. The right of charities to trade as part of their normal activities without the need to set up a trading company ? an initial recommendation for the Bill (see ArtsProfessional Issue 35, October 7 2002, p1) ? has been dropped from the draft. While this Bill will affect England and Wales, similar legislation is progressing in Scotland and the committee is expected to liaise with the Scottish Executive. The scrutiny period will continue over the summer with recommendations expected by the end of September.
Arts charities are being called upon to submit evidence and representations to the committee by June 28. Alan Milburn said, ?We are working to a tight timetable ? not of our own choosing ? and will have to start taking oral evidence soon after the draft Bill is published. We recognise this leaves little time for people to give us their views, but hope that many of the issues are already well known. The Joint Committee is especially keen to ensure that the views of small charities are taken into account.?
Full details of how to submit evidence can be found at http://www.parliament.uk/ parliamentary_committees/jcdchb.cfm