Legislation to give more powers to the Charity Commission has been widened to include measures to disqualify people from working in senior management positions at charities and to allow voluntary sector organisations to make social investments.
In today’s Queen’s Speech, the government announced there would be a Charities (Protection and Social Investment) Bill put before parliament.
This bill included new powers for the regulator including the ability to ban people with convictions for criminal offences, such as terrorism or money laundering, from being charity trustees.
In papers alongside the Queen’s Speech this afternoon, the government says the new legislation would “protect charities from abuse, strengthen the powers of the Charity Commission for England and Wales, and enable charities to more easily undertake social investment (investing their funds in a way that furthers their charitable purpose as well as providing a financial return)”.
The main benefits of the bill would be to protect charities from abuse “by people who present a known risk”, the papers say, and make it easier for the commission “to take robust action against individuals and charities in cases of abuse”.
The documents say that the bill will “extend the criteria for automatic disqualification from charity trusteeship, and would extend disqualification to senior management positions to better protect charities from the risk of abuse”.
They say that the Charity Commission will be given powers to direct that a charity be closed down after an inquiry and issue official warnings to charities.
The regulator said that it would be given a pre-emptive power to “stop a charity breaching the law – for example, such as intending to disclose personal data about its beneficiaries”.
In its response to the draft bill committee in March, the government said that powers to direct charities not to take certain actions and an extension of the proposed ability to disqualify people from being charity trustees to include senior management positions in charities should be reintroduced.
These were in the initial consultation on the bill but not included in the draft bill.
The powers allowing charities to make investment that generate both a social and a financial return come after recommendations from the Law Commission in September.
In a statement, William Shawcross, chair of the Charity Commission, said the bill was a “vital piece of legislation if we are to have the powers that we need to stop individuals abusing charities”.
He said the regulator “must be able to take action where abuse occurs”, and said that the legislation was also good news for charities wanting to make social investments.
(Source: Andy Ricketts, The Third Sector)