CABINET OFFICE News
Release (CAB/030/08) issued by The Government News Network on 17
March 2008
Phil Hope,
Minister for the Third Sector, has today made the third
commencement order of the Charities Act 2006. This will bring into
force a range of changes to bring charity law up to date and give
charities greater flexibility.
Phil Hope, Minister for the Third Sector said:
'These changes will give charities more flexibility to
tackle the pressing social and environmental issues of the day.
New powers for the Charity Commission will mean better, more
proportionate regulation for charities.'
The main changes are:
1. Allowing charities to pay trustees for goods and services. In
the past charities have been restricted from paying trustees or
anyone associated with them for goods or services to avoid
conflict of interest. New measures remove this restriction to
enable, for example, a trustee who is a roofer to fix the
charity's roof at cost price. A range of safeguards accompany
the new power, to prevent conflicts of interest or abuse.
2. Wider powers to help the Charity Commission protect charities.
Under a new power the Charity Commission can direct the actions of
a charity or individuals running a charity, if it believes that
misconduct or mismanagement have occurred. In the past the only
option would be to remove the board and appoint interim managers
at great cost to the charity. The new rules enable a proportionate
response to each case.
3. Flexibility for charities changing their charitable purpose. A
charity always has a defined purpose. Over time circumstances may
change requiring that purpose to change. As the charity's
assets have been given for the original purpose the law courts and
Charity Commission must give permission. In the past they could
only permit the nearest alternative purpose. Now, social and
economic conditions can be considered so that the charity can have
the most beneficial purpose.
4. Power for the Charity Commission to remove or suspend
membership of a charity. This closes a loophole where an
individual in a charity is suspended or removed from their
position but could seek re-election to it if they remained a
member of the charity.
5. Helping charities deal with difficult circumstances. The Act
gives the Charity Commission more flexibility to help charities
deal with charitable donations that cannot be used as intended,
and to help charities that are established for purposes that are
no longer relevant to change those purposes.
6. New Charity Tribunal. If a charity wants to appeal against a
decision of the Charity Commission it must go the High Court. This
too costly for most charities resulting in lack of justice for
them and stagnation in charity law as it is not updated through
case law. The new tribunal will provide an affordable independent
recourse for charities.
All the provisions in the order, excluding the Charity Tribunal,
will come into effect immediately.
Notes to Editors
1. The Charities Act 2006 is often cited as
the biggest shake up of charity law for four hundred years. For
further information on its provisions and implementation please
see: Charities Act Implementation http://www.cabinetoffice.gov.uk/third_sector/law_and_regulation/charities_act_2006.aspx
2. The Office of the Third Sector (OTS) http://www.cabinetoffice.gov.uk/third_sector/
in May 2006 to drive forward the Government's role in
supporting a thriving third sector, and join up sector related
work across government.
3. The Charity Commission is the independent regulator for
charities in England and Wales. For further information please
see: Charity Commission http://www.charitycommission.gov.uk/
Cabinet Office Press Office 22 Whitehall LONDON SW1A 2WH
http://www.cabinetoffice.gov.uk