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Lords Select Committee on Charities

Briefing on DCMS and Charity Commission Response to Stronger Charities for a Stronger Society

The House of Lords Select Committee on Charities published its report Stronger Charities for a Stronger Society in March 2017. The wide ranging and comprehensive report made 42 recommendations aimed at various actors in the charitable space including regulators, infrastructure bodies and government. In December 2017 the Department for Culture Media and Sport published its response to the report and in January 2018 the Charity Commission published its response.

Summary of DCMS response

Tracey Crouch, minister for sport and civil society, wrote a warm foreword in which she referred to charities as a ‘national asset’ and emphasised the need to work together creatively across sectoral boundaries in order to tackle the issues that prevent charities from reaching their potential. She further emphasised that, through the report response and in future work on the civil society strategy, she wanted to send a strong positive message about the government’s vision for its work with and for civil society.

Despite a positive foreword and the fact that the majority of the recommendations were welcomed, the government’s response offered little in the way of substantive ideas or initiatives that would enable any of the recommendations to be implemented. Instead the response frequently referred to the good work of existing programmes, the importance of developing an effective Civil Society Strategy and the work that will be carried out when a voluntary, community and social enterprise crown representative is appointed.

Recommendations that were rejected include:

  • Recommendation 5, to consult on a statutory duty on employers to give employees time off for charity trustee roles.
  • Recommendation 37, for government to implement recommendations made by Lord Hodgson of Astley Abbots in his review of the Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Act.

In response to recommendation 19, that the government review commissioning to consider the impact of payment by results on charities and to see what support the sector needs, the government expressed its support for such contracts saying ‘payment by results contracts and social impact bonds can support innovative solutions to address some of the biggest issues of our time’. It further cited existing work carried out by the Government Outcomes Lab (GO Lab) and it therefore seems that any formal review of commissioning practices or outcome based funding models will not be commenced in the near future.

In response to recommendations 35 and 36 about reviewing Compacts in collaboration with the voluntary sector, the government said that central government continues to ‘follow the principles’ of the Compact, and that the Civil Society Strategy will provide an opportunity to discuss how sector partnerships can be strengthened.

Recommendation 41 stated that the Lords Select Committee had ‘grave concerns’ about the Charity Commission proceeding with any proposals to charge charities and that any proposals should be subject to full consultation. While the government agreed that any proposals should be transparent, it did not share the Select Committee’s concerns on the matter and failed to make any substantive commitment to maintain direct funding of the Charity Commission as the Committee recommended (recommendation 42).

Summary of Charity Commission response

There were six recommendations specifically for the Charity Commission. In response to recommendation 6, which suggested having a mandatory time limit on serving as a trustee, the Commission said that while it supported best practice guidance suggesting a maximum nine year trustee term, mandatory enforcement of the guidance would be ‘unworkable’ because there may be reasons why a particular charity cannot follow this practice. The Commission also rejected recommendation 32 which proposed that the Charity Commission include options for time-limited structures in the model governing documents that it produces for charities in order to prompt new charities to consider their lifespan. The Commission highlighted the resource this recommendation would entail and drew attention to existing guidance that encourages charities to review their effectiveness regularly.

In response to recommendation 7 to increase diversity at board level, the Charity Commission said that DCMS had overall responsibility for board appointments. In its response the government said that it has ‘sought to maximise the diversity of applicants’ and that board members are appointed by the Secretary of State ‘based on merit following open and fair competition’. The Commission accepted recommendation 31, that it should consider what further support and guidance it can provide to charities seeking to merge, and recommendation 40, that it should encourage charities to report serious incidents. However it did not announce any new initiatives on either matter, instead reiterating existing work and saying it would give consideration to what changes it could make to its guidance.

What next?

The lack of tangible action arising from the government response to the Select Committee’s report is disappointing. We hope that the Civil Society Strategy will provide an opportunity for many of these recommendations to be considered again. The inquiry was comprehensive and wide-ranging, contributions were received from a large number of charity experts and an opportunity would be wasted if none of the resulting recommendations were acted upon.

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