Recommendations from Public Administration Select Committee

The Public Administration Select Committee has recommended to the Government that the public benefit provisions in the Charities Act 2006 are critically flawed and should be repealed.

It should be the job of Parliament to define what public benefit means and determine the criteria for charitable status, not the Charity Commission or the courts, the Committee has stated.

In its post-legislative scrutiny report on the role of the Charity Commission and public benefit, the Committee has also stated that the budget cuts sustained recently by the Charity Commission have left it unable to regulate the sector as effectively as ministers might like.

It calls on ministers to revise the Commission’s statutory objectives so it can refocus its limited resources on regulation rather than wasting time and energy on less critical objectives such as promoting the effective use of charitable resources or overseeing a reappraisal of what is meant by public benefit.

The committee recommends that charities should be required to publish their spend on campaigning and political activity in their annual returns.

The committee also supports the introduction of fines for late filing of annual returns but does not back charges for registering new charities or filing annual returns.

In addition rejects Lord Hodgson’s proposal to increase the financial threshold for compulsory registration with the Charity Commission from £5,000 to £25,000, opining that registration is not a significant regulatory burden for charities and that public trust in the sector could be threatened by a higher threshold.

The Committee also highlights chugging and puts fundraising self-regulation on notice but stops short of calling for statutory regulation. It endorses the government's rejection of the idea that large charities should have the automatic right to pay trustees.