House of Commons Public Administration Select Committee
Appointment of the Chair of the Charity Commission
Fourth Report of Session 2012–13
Volume II Oral and written evidence
Ordered by the House of Commons to be printed date 5 September 2012
HC 315-II Published on 19 October 2012 by authority of the House of Commons London: The Stationery Office Limited £7.50
The Public Administration Select Committee (PASC)
The Public Administration Select Committee is appointed by the House of Commons to examine the reports of the Parliamentary Commissioner for Administration and the Health Service Commissioner for England, which are laid before this House, and matters in connection therewith, and to consider matters relating to the quality and standards of administration provided by civil service departments, and other matters relating to the civil service.
Current membership Mr Bernard Jenkin MP (Conservative, Harwich and North Essex) (Chair) Alun Cairns MP (Conservative, Vale of Glamorgan) Michael Dugher MP (Labour, Barnsley East) Charlie Elphicke MP (Conservative, Dover) Paul Flynn MP (Labour, Newport West) Robert Halfon MP (Conservative, Harlow) David Heyes MP (Labour, Ashton under Lyne) Kelvin Hopkins MP (Labour, Luton North) Greg Mulholland MP (Liberal Democrat, Leeds North West) Priti Patel MP (Conservative, Witham) Lindsay Roy MP (Labour, Glenrothes)
Powers The powers of the Committee are set out in House of Commons Standing Orders, principally in SO No 146. These are available on the Internet via www.parliament.uk
Publications The Reports and evidence of the Committee are published by The Stationery Office by Order of the House. All publications of the Committee (including press notices) are on the Internet at http://www.parliament.uk/pasc
Committee staff The current staff of the Committee are Emily Commander (Clerk), Charlotte Pochin (Second Clerk), Alexandra Meakin (Committee Specialist), Paul Simpkin (Senior Committee Assistant) and Su Panchanathan (Committee Assistant).
Contacts All correspondence should be addressed to the Clerk of the Public Administration Select Committee, Committee Office, First Floor, 7 Millbank, House of Commons, London SW1P 3JA. The telephone number for general enquiries is 020 7219 5730; the Committee’s email address is [email protected].
Witnesses
Tuesday 3 July 2012 Page
Dame Suzi Leather, Chair of the Charity Commission Ev 1
Wednesday 5 September 2012
William Shawcross CVO, Government’s preferred candidate Ev 14
List of printed written evidence
Page
1 Dame Suzi Leather, Chair of the Charity Commission Ev 24
cobber Pack: U PL: COE1 [SO] Processed: [18-10-2012 10:18] Job: 023064 Unit: PG01 Source: /MILES/PKU/INPUT/023064/023064_o001_PASC 03 07 12 (.xml
Public Administration Committee: Evidence Ev 1
Oral evidence
Taken before the Public Administration Committee on Tuesday 3 July 2012
Members present: Mr Bernard Jenkin (Chair)
Alun Cairns David Heyes Charlie Elphicke Greg Mulholland Paul Flynn Lindsay Roy Robert Halfon ______
Examination of Witness
Witness: Dame Suzi Leather, Chair of the Charity Commission, gave evidence.
Q1 Chair: Good morning and welcome to this Q3 Paul Flynn: Do you think the press has always valedictory session on your role as chair of the Charity reported fairly and accurately on you and the Commission. Could you, please, confirm yourself for commission? the record? Dame Suzi Leather: I suspect you are referring to the Dame Suzi Leather: I am Suzi Leather and I chair the coverage of particular issues. Charity Commission. Chair: Thank you very much for being with us today. Q4 Paul Flynn: Yes. I have a particular view on this, and I think it may be behind what you suggested about independence. Some elements of the press have Q2 Paul Flynn: As a senior member of this behaved abominably. The way they have treated you Committee, may I say that I am very sorry we cannot in your position is one matter, and at one time I think go on meeting like this? We have had very enjoyable there was an apology from the Chair of this and illuminating sessions with you over the years. Can Committee about the behaviour of one member who you give us some idea of what advice you give your was, I believe, playing to the gallery on this. If we successor? can take it forward, do you think that the unfair and Dame Suzi Leather: First, I would give them untrue reporting on the work of the commission and congratulations rather than advice, and tell them they its motives may have been responsible for the savage were fortunate to be chairing what I think is a hugely cut in your funding and might lead to problems in important organisation with responsibility for part of future? our society that is probably valued almost above Dame Suzi Leather: I suspect we would all agree that everything else. I would say they should remember the issue of the charitable status of independent always that the vast majority of the charity sector are schools is one that is heavily ideologically laden in very small organisations, which are run by volunteers public debate. We would also agree that there is and have no money for paid advisers or staff. It is perhaps a tendency, an instinct, in the British media therefore incumbent on the Charity Commission to to personalise issues. Putting those two together, I do provide clear and helpful guidance to help trustees not think it would have mattered who chaired the manage their charities. It is, after all, up to trustees to Charity Commission for the last six years. Whoever it manage their charities; it is not up to the commission, was would have got a pretty rough ride because of the the courts or Parliament. That is probably the most job we had to do following the Charities Act 2006. It important thing, but there are some other things that was incredibly important that that was done are particularly important at the moment. impartially and independently, and that is what we did. The real shame about the attacks, sometimes Protecting the independence of the commission is personalised, was not so much the effect it had on me, hugely important, as well as ensuring the integrity of which was neither here nor there, but the slur it cast its decision-making, at a time when it is facing huge on the decision-making of the commission. The challenge because of the cuts that have been made to decision-making of the commission is not within the its budget. We have managed to deal with that 33% gift of the chair now, in the future and in the past. cut very imaginatively and effectively, and my thanks These are collectively made corporate decisions, go to all my staff for that. But, going forward, if we which are also very carefully carried out. That has were to have further cuts, my successor should know been the real shame of the coverage, but thank you that we would not be able to carry out all our statutory for your kind words. functions, and the commission would then be in the position of having to make some invidious choices. Q5 Paul Flynn: We have a pre-appointment hearing It is not an easy time to be taking over the Charity for your successor in due course. You stressed Commission, regardless of what Lord Hodgson comes independence. What is the threat to the independence up with in his review, which I very much look of your successor? This Committee has taken a forward to. serious line about the Head of the Statistics Authority cobber Pack: U PL: COE1 [E] Processed: [18-10-2012 10:18] Job: 023064 Unit: PG01 Source: /MILES/PKU/INPUT/023064/023064_o001_PASC 03 07 12 (.xml
Ev 2 Public Administration Committee: Evidence
3 July 2012 Dame Suzi Leather and the Independent Adviser on Ministers’ interests, Dame Suzi Leather: “Political” in charity law is and we have pressed to ensure that those people can defined very broadly. “Political purposes” means to act robustly and in particular independently of seek to change the policy of government, change the government. Is it independence of government, or law or change the policy of a public authority, so it is what? quite a wide-ranging definition. That is the reason we Dame Suzi Leather: It is more than independence of provide, I think, very good, clear guidance on what it government; it is also independence of the sector is charities can do. itself. Regulators must stand firmly on the ground they are given and not be swayed by what is said in Q11 Robert Halfon: But many “charities” are just Parliament, the press or the sector. That is a very campaigning organisations who spend the whole time difficult job, and one that I think the commission can doing just that—trying to change the policy of be proud of having carried out without fault, but government—and do nothing else in terms of inevitably there are areas of our activity which are traditional charitable giving. hugely complex, not least the issue of think-tanks. Dame Suzi Leather: No. Charities cannot have Where is the boundary between what is charitable and purposes that are political. They can carry out what is straying into the political? This is something campaigning activity in support of their charitable that we struggled with, and we are continually trying purposes, but that can never be their sole activity; to get this right, but you will be aware that this is otherwise, they would in effect have become an highly contentious. organisation whose purpose was political. Chair: Of course, a lot of that contention concerned the question of public benefit, and we will come to Q12 Chair: Aren’t you constantly having to guard that question. against or be watchful for charities that purport to have charitable purposes but are fronts for political Q6 Robert Halfon: What do you define as a charity? activity? How do you draw the boundary? What does it mean? Dame Suzi Leather: I have already alluded to this Dame Suzi Leather: Charities are particular sorts of rather difficult area of judgment that we have to make non-profit organisations run for public, not private, when a think-tank comes to us. It may be an existing benefit; they must have purposes that Parliament has accepted as charitable, so there is a twin test: they organisation or it may be a newly set-up organisation. must be for charitable purposes and be for public We have to make a judgment about whether those are, benefit. The issues of private benefit and in a charitable-law sense, educational organisations. independence are important. They cannot be directed There are many think-tanks that are not charities, but by another body; they have to come under the remit of charitable think-tanks are ones that advance education. the courts and the commission in England and Wales. In order to advance education, charities have to show, first, that they are educating the public about Q7 Robert Halfon: You do not see it in the something valuable; that they are not peddling a traditional sense of a charity doing something, like propagandist point of view; and that they are not Oxfam raising funds and giving things to people and taking a line on a controversial area. There has to be helping them. Do you make a distinction between a a degree of neutrality about what they do. In addition, campaigning group and a charity in the traditional they have to make what they do available to the sense? public. That is really what we judge. In a charity-law Dame Suzi Leather: I was answering your question sense, it is neither here nor there whether all their in a legal sense. What does “charity” mean in law? If trustees are from a particular political party, although you look at the 162,000 organisations currently on our that should ring alarm bells, but in law they could be register, you will see a huge diversity in both size and trustees of an organisation that was charitable. Then what they do, but all those purposes must be ones that you have to look at how that organisation is going to Parliament has recognised as charitable. operate. Difficult decisions need to be made at registration and in looking at the activities of Q8 Robert Halfon: So if an organisation just does particular organisations. campaigning, as opposed to traditional charitable work, in legal or parliamentary language there is no Q13 Alun Cairns: These are clearly difficult and distinction between those things. delicate decisions that need to be taken when we are Dame Suzi Leather: Parliament has accepted that talking about organisations that involve campaigning charities can campaign. They can campaign in the activities. Therefore, as chairman of the Charity interests of their beneficiaries; they can campaign to Commission and someone with a strong political promote their purposes. background, were you in an impossible position to make those difficult judgments? Q9 Robert Halfon: Even if they just do Dame Suzi Leather: These judgments on registration campaigning. and so on are not taken by the board; they are taken Dame Suzi Leather: What they cannot have are by our staff. purposes that are political. That is not acceptable in charity law. Q14 Alun Cairns: But when they become controversial and in the news, I would assume the Q10 Robert Halfon: How do you define those chairman of the Charity Commission and board would purposes? become actively involved. Therefore, as someone with cobber Pack: U PL: COE1 [O] Processed: [18-10-2012 10:18] Job: 023064 Unit: PG01 Source: /MILES/PKU/INPUT/023064/023064_o001_PASC 03 07 12 (.xml
Public Administration Committee: Evidence Ev 3
3 July 2012 Dame Suzi Leather a blatant political background, were you not in a very Dame Suzi Leather: No, because the commission’s difficult position on these issues? decisions are corporate ones; they are not the Dame Suzi Leather: No. These decisions are taken by decisions of the chair, whoever he or she may be. our staff in registration; they are taken by our staff carefully and, I hope, best informed. Clearly, they may Q20 Charlie Elphicke: I want to follow up the point have been taken rather differently in the past. made by Mr Cairns. We should be direct and open. Do you feel that your work and effectiveness has been Q15 Alun Cairns: So the chairman or board does not inhibited by your characterisation as a New Labour show an interest in anything that becomes quango queen in the media from time to time? controversial and political where maybe staff have Dame Suzi Leather: No. I do not believe I have been taken a wrong decision. affected by that. Dame Suzi Leather: Our responsibility is to ensure that our staff are spotting particularly difficult or Q21 Charlie Elphicke: Do you think it has affected controversial areas and focusing their thinking power the organisation? on those high-risk cases rather than lower-risk cases. Dame Suzi Leather: If in public office, such as the The role of the board is to ensure that strategically the chair of the commission or other public bodies, you organisation is responding to risk in an appropriate do not expect to get some press comment, you are way, whether it is registration or in the continuing being naive. activities. In the case of think-tanks, these are very small numbers. There are very few think-tanks. I Q22 Charlie Elphicke: Do you feel that impression know this is an issue that exercises people in the has harmed the work of the commission? Westminster village. Is it an issue for people out Dame Suzi Leather: I do not think it has harmed the there? Frankly, it is not: 2% of the complaints made work of the commission, or affected its to us are about the political activities of charities. In decision-making in any way. the last mayoral and local elections, we had two complaints, both of which I am pleased to say used Q23 Charlie Elphicke: Has it harmed the perception our guidance in making them, but this is not an issue of the independence of the commission? that the general public is particularly exercised about. Dame Suzi Leather: No, I do not think it has harmed the perception of the effectiveness or independence of Q16 Chair: The substantive question that will the commission. For instance, I was delighted to see preoccupy this Committee when we are interviewing that one of the main umbrella bodies, the National your potential successor is: do you think it has caused Council for Voluntary Organisations, in their response you any difficulties or personal conflicts because you to Lord Hodgson, which they published, very clearly are known to be a member of the Labour Party? said that the independence of the commission was Dame Suzi Leather: No. clear. We are independent, and it was good to read that. Charlie Elphicke: On the think-tank issue, people Q17 Chair: Should that inhibit our choice? Should have in the past pointed to the commission granting we advise the Government against appointing charitable status to the IPPR, a left-wing charity, and somebody who has links with a political party, or do refusing charitable status to the Centre for Social you think that would be a mistake? Justice, which many people feel has made massive Dame Suzi Leather: My advice would be: choose the social change in this country, because it is right-wing. best person for the job, be it a man or woman. That is the perception. Do you agree with that, or do you reject that? Q18 Chair: Regardless of their political connections. Robert Halfon: On a point of order, I just clarify Dame Suzi Leather: Anyone who stands for public that the CSJ is not right-wing and that was the whole office has to be open about whether they are a member argument about it. of a party, or an active member of a party. I am not Charlie Elphicke: It is the perception. The argument an active member of any political party. It is on public of the Charity Commission was that it was somehow record that I am a member of a political party. It is a right-wing and political. I agree with Mr Halfon. rather odd notion that you cannot exercise impartial judgment simply because you are a member of a Q24 Chair: Perhaps you could clarify whether we mainstream political party. have understood that correctly. Chair: It is rather odd; I would rather agree with you Dame Suzi Leather: Let me say again the decision on that point. that we have to make and the test for whether these organisations can be accepted as advancing education. Q19 Alun Cairns: This is why I wanted to pursue it. Is the education of sufficient value? Does it have Some controversial judgments have been made by the political, party-political or propagandist purposes? Charity Commission since its inception. If there is a Does it operate in a balanced way without promoting chairman who has quite a strong political background, a preconceived point of view? Is its work publicly does that compromise the integrity of the commission available? Those are the four questions we ask or the position of the chairman in making those ourselves. If we accept an organisation, it is because judgments, when maybe public opinion might think we have been satisfied that the answers to those those judgments were wrong? questions are acceptable. If they fail any of those we cobber Pack: U PL: COE1 [E] Processed: [18-10-2012 10:18] Job: 023064 Unit: PG01 Source: /MILES/PKU/INPUT/023064/023064_o001_PASC 03 07 12 (.xml
Ev 4 Public Administration Committee: Evidence
3 July 2012 Dame Suzi Leather cannot register them; they are not charitable in legal Q31 Charlie Elphicke: Can you give me a single terms. case where you have investigated a very large charity? Dame Suzi Leather: I would be able to furnish you Q25 Charlie Elphicke: In law, the Centre for Social with that information. The overall size of charity is Justice fulfilled all those four criteria, yet the Charity not a factor that would determine whether we would Commission declined to register it as a charity. Why? investigate it. Unequivocally, if something is high-risk Dame Suzi Leather: I do not think we have declined to the reputation of charities and is breaching charity it. I think you should go back and check that. regulation—we have already given you our new risk framework—we will investigate it, assuming we think Q26 Charlie Elphicke: I was involved in the it is within our powers and is worth doing, whether it application. It was made clear that there would be no is a small or large charity. When we carried out our grant of charitable status, and I am just perplexed by strategic review, we looked at whether, as a regulator, that. I felt there was partiality at the time. you should have a minimum threshold for doing Dame Suzi Leather: I think our response to you was investigations into charities. The answer we got back that you had not demonstrated it at the time. from other regulators was not to do that, because if you say there is a minimum threshold and you look at Q27 Charlie Elphicke: Let’s turn to Atlantic Bridge, something only if it is above 10,000, 15,000, or which has taken up a lot of the Charity Commission’s whatever it is, it is green-lighting that if you want to time, certainly in the public domain. Given that the fraudulently abuse a charity, go for a small one. To do commission found that the trustees of Atlantic Bridge that would make no sense at all. acted in good faith and no funds were recovered, what was gained from the commission’s investigation? Q32 Lindsay Roy: For the purposes of clarity, can Dame Suzi Leather: What was gained by our you set out what criteria you use to identify investigation was the prompt cessation of all activities “high-risk”? by Atlantic Bridge on the publication of our Dame Suzi Leather: If you turn to our annual report, regulatory inquiry report, so the charity stopped doing which I hope you have been given, on page 9 you will anything. When the trustees were considering our see our new risk framework. This is a risk framework advice in that report, they decided to wind up the we developed in the light of our strategic review. charity, as is their right. What was gained was that Clearly, if you have a cut of 33% you have to focus that charity was no longer active or existed. That is your regulatory activity on the things that really quite a good result for an organisation that we found matter. The first question we ask there is: do we really was not doing, and had never done, anything need to be involved? Does the issue fall wholly within charitable. our remit? Ought this to be dealt with by another regulator? Is the issue of such significance that it is in Q28 Charlie Elphicke: There were 76 the public interest for us to do this? You will know investigations, according to the Charity Commission’s from your letters that there are many, many issues to annual report. What was the highest value or turnover do with charities that people feel strongly about. We of the charities concerned? Of those 76 investigations, as the regulator cannot look at absolutely everything, do you know the largest size of charity? so we have to prioritise. That is the first question we Dame Suzi Leather: Off the top of my head I do not ask. know that, but we could provide that information to If yes, what is the nature and level of the risk? Is you. there or is there not significant risk? What is the most effective response? Do we need just to give advice? Q29 Charlie Elphicke: My concern is that Atlantic Do we need to require charities to do something? Do Bridge was quite small but deeply political. Last time we need to have a full investigation? Do we need to you came here, I raised the issue of related party involve the police? Do we need to involve other transactions with National Trust, and the letter I got regulators? We will go through this framework before back afterwards was, “They’re a very big charity; we we make any decisions. don’t really want to go there.” Do you just pick on the little ones, or do you deal with the big ones? Q33 Chair: Moving back to the subject of public Dame Suzi Leather: It is hard to cast my mind back benefit, the ruling on independent schools by the that far, Mr Elphicke, but I recall we wrote to you a tribunal rather suggests that it is not for the Charity three or four-sided letter rather closely answering all Commission to be too definitive about what public the points you had made. I do not think your benefit is. Do you agree with that? characterisation of our response is absolutely accurate. Dame Suzi Leather: First, the judgment of the upper tribunal upheld the commission’s approach in all the Q30 Charlie Elphicke: It was a long, detailed letter, principles. Perhaps the most important thing is that but basically it amounted to, “We’re not going to take charities cannot have purposes that exclude the poor. any action,” even though in evidence it was clear that That was something we had said, which the upper there were concerns on the part of your chief tribunal agreed. How they provide it is up to trustees, executive that it should be looked into. You said, whether it is by fee remission or partnerships, making “We’re not going to investigate.” their facilities available and so on. Again, that is Dame Suzi Leather: I do not accept at all that that something we said and the upper tribunal agreed. was the position we took. Charitable status is not at risk. That is something we cobber Pack: U PL: COE1 [O] Processed: [18-10-2012 10:18] Job: 023064 Unit: PG01 Source: /MILES/PKU/INPUT/023064/023064_o001_PASC 03 07 12 (.xml
Public Administration Committee: Evidence Ev 5
3 July 2012 Dame Suzi Leather have been clear about, and the upper tribunal upheld Q38 Chair: But this did look awfully like having a that. go at independent schools. I can certainly forgive you As to gold-plating, expecting more of charities that for feeling that that was the wish of the Government have greater resource than charities that have less, that appointed you at the time and put through the again we said that and the upper tribunal upheld it. As legislation. I can certainly respect your view that to allowing use of facilities by non-educational Parliament did not have quite the courage of its groups—adults or community groups—we said that convictions, if those were the convictions of that was not in keeping with its charitable purpose, Parliament, to put that more explicitly into the which is educating children, and the upper tribunal legislation, but as soon as you were challenged you agreed with that again. must have had advice that there was risk that your The only respect in which they disagreed with our view would not be upheld and you were promoting approach—it was a significant one—was that we had what ultimately can be regarded as a political view. in effect adopted a test of reasonableness for public You must have had advice that there was a risk. benefit. We said that you cannot wholly exclude the Dame Suzi Leather: We were never having a go at poor from a charitable independent school, and the any particular sector of the charity. amount of public benefit you provide must be reasonable. The upper tribunal said there is not a Q39 Chair: That will ring very, very hollow to the reasonableness test. What schools must provide is at independent school sector. least the minimum or tokenistic amount, but beyond Dame Suzi Leather: It is interesting that no other that it is up to trustees to decide. fee-charging charitable sector took the same view, and they were bound by the same piece of legislation. Q34 Chair: I do not think they used the word “tokenistic” in the judgment. Q40 Chair: Give an example of another fee-charging Dame Suzi Leather: “De minimis”. I do not think they sector that would have felt at risk from that guidance. escaped the desire to use some Latin. Dame Suzi Leather: Charitable care homes and charitable independent hospitals. Q35 Chair: It begs the question how you got the commission into what can only be described as rather Q41 Charlie Elphicke: And housing associations. a scrape. You are having to pay not only your own Dame Suzi Leather: Some, not all. costs but an undefined amount of costs. Do we know what the total liability is? Q42 Chair: When did you first begin to realise that Dame Suzi Leather: Did you say I had got the you might be at risk of losing this case, which has commission into a scrape? cost an indefinable amount of money? Can you tell us how much money it has cost? Q36 Chair: You are having to pay your own legal Dame Suzi Leather: We were confident about the costs and the legal costs of your opponents in this. guidance that we had taken a great deal of trouble to That is correct, isn’t it? It does suggest that you lost compile. We consulted on it very widely; we your case. published the legal underpinning for it. We were Dame Suzi Leather: Hang on. Parliament passed the confident that that was a good assimilation and 2006 Act, which was a piece of legislation that put expression of the real meaning of “public benefit” in tremendous emphasis on public benefit and the role of a charitable sense, and we provided that for the whole the commission. We had to provide guidance, which of the charity sector. The thing that interested certain was not easy; you asked us to do something parts of the media was the impact or the meaning for incredibly difficult. the charitable independent school sector. There are about 3,500 charitable independent schools; there are Q37 Chair: But this is the case. 162,000 charities on the register. Our guidance applies Dame Suzi Leather: Chairman, you declined to define to all of them. They are all required to demonstrate “public benefit” and effectively said, “We, the public benefit. law-makers, are not going to do that. You, the Charity Commission, can provide guidance on this.” Our job Q43 Chair: But, if the independent sector had lost its was to look at 400 years of cases and distil from that charitable status, we are talking about an industry of what “public benefit” means, not in a way that charity £2.5 billion that educates 10% of the children in this lawyers understand it but in a way that your average country and some of our most successful institutions. trustee understands it. There are 900,000 trustees out Dame Suzi Leather: We were never talking about there and they all need to know what “public benefit” independent schools risking the loss of their charitable means, and it was our job to provide guidance. We status. We made that absolutely clear. The question took all the case law; we consulted very widely; we was: were they demonstrating how they were set up published draft guidance; and on the basis of the in their purposes and how their trustees were running consultation, we finalised the guidance. Some time those charities for public benefit? That was the issue. later, we were confronted with challenges to that Those trustees needed to know what the meaning of guidance, and surely it was right that that guidance public benefit was and what it was they needed to do. was tested. That was helpful not only for us but for the I dispute that there has been this very negative impact sector; and actually it is quite helpful to Parliament, on the independent school sector. The independent because Parliament now knows what the 2006 Act school sector is a wide spectrum, and the messages has achieved. we were getting from many schools was, “We want to cobber Pack: U PL: COE1 [E] Processed: [18-10-2012 10:18] Job: 023064 Unit: PG01 Source: /MILES/PKU/INPUT/023064/023064_o001_PASC 03 07 12 (.xml
Ev 6 Public Administration Committee: Evidence
3 July 2012 Dame Suzi Leather do this anyway; we’re active and keen to do this. Q53 Chair: There are two further questions on this. We’ve been doing this for hundreds of years. We are First, what do you think is wrong with the legislation? very keen to demonstrate to the public what it is we Should it be changed? We are doing a legislative do.” review of the Charities Act. What advice would you have for us on that question? Q44 Chair: Why didn’t you just withdraw the Dame Suzi Leather: There are a number of ways in guidance and say, “We’ll make sure we don’t get into which I think it would be helpful if the Act was litigation and waste a lot of time and energy on this, revised. because we recognise you are charitable institutions. You think you are charitable institutions. Why do we Q54 Chair: But in respect of this particular issue. need to waste time litigating it?” Why this very Dame Suzi Leather: In respect of this particular issue, confrontational approach to the independent school it is up to Parliament, not the Charity Commission, sector that you adopted? but a partial definition of “public benefit” would be Dame Suzi Leather: It was not a confrontational enormously helpful. At the moment, there is a degree approach. of lack of clarity both for us as a regulator and for the sector. Indeed, the upper tribunal in its judgment, Q45 Chair: Why did they feel so threatened? which is 130 pages—I advise you to read it, if you Dame Suzi Leather: You must ask them why they felt are particularly interested in this, because it gives a so threatened, but it was not a confrontational full airing of the complexities of the issues—says it approach. We were even-handed and independent; we cannot bring absolute clarity to this and clarity can be did the best we could. brought only by Parliament. I think the ball is rather in your court now. Q46 Chair: The Office of the Scottish Charity Regulator did not have the same kind of confrontation Q55 Chair: Secondly, what lesson would you pass with the independent schools in Scotland. on to your successor? Clearly, to go through the Dame Suzi Leather: Most of all, we did the job tribunal process and litigation is a very expensive and Parliament had asked us to do. confrontational way of redrafting guidance. If you could turn back the history book and revisit the thing, how would you do it differently? Q47 Chair: Obviously, you did not; otherwise the Dame Suzi Leather: To be absolutely clear, first, the law would have supported you in the guidance you way we went about this was not confrontational. issued. Secondly, we did what you asked us to do; we did Dame Suzi Leather: The law has supported us in the what the legislation required of us. guidance we issued. I went through all the different ways in which the judgment found— Q56 Chair: I do not accept that; otherwise the tribunal would have supported you 100%. Q48 Chair: Except in one particular respect, which Dame Suzi Leather: Can I suggest that you read the was rather significant and resulted effectively in costs judgment? You will see how much of what we have being awarded against you by the tribunal. said and the main principles the judgment did support. Dame Suzi Leather: That is not how it happened. I can tell you the cost of the case, if you want me to. Q57 Chair: I have the judgment in front of me, but I do not want to go into too much detail. The key point Q49 Chair: I would be grateful for that. is that it is a matter for the trustees of a charitable Dame Suzi Leather: It was £185,000. independent school, rather than the Charity Commission or the tribunal, to decide how trustees’ Q50 Chair: Those are your direct legal costs, or the obligations might be fulfilled in the light of the total legal costs. circumstances. Dame Suzi Leather: The total legal costs. Dame Suzi Leather: Yes, but one of the aspects of public benefit we have to understand is that, if you are Q51 Charlie Elphicke: What was the internal admin not providing your public benefit to the whole time? What is the cost of all the admin and the whole population, you have to provide it to a sufficient exercise? How much has it cost the taxpayer? section of the public. Then the issue is: what Dame Suzi Leather: The £185,000 is our legal costs. constitutes a sufficient section in different I do not know what our internal costs were. circumstances—geographic restrictions and so on— including fee-charging? It is a complex aspect of law, Q52 Charlie Elphicke: Why not? and, frankly, Parliament ducked the issue. Dame Suzi Leather: If Parliament did not think we should do this, it should have passed different Q58 Chair: I accept that Parliament may have legislation in 2006. It is a tribute to our ducked the issue, but when it was clear that it had decision-making and guidance that so much of it was done so why didn’t you duck the issue, too? upheld. If people said, “What was it you got wrong?” Dame Suzi Leather: Because you asked us not to. and we said we thought there should be a Chair: I am not sure we did. reasonableness test, I do not think the general public would have regarded that an unreasonable approach Q59 Robert Halfon: One of the first acts of the new to have taken, if you will forgive the pun. Labour Government in 1997 was to get rid of the cobber Pack: U PL: COE1 [O] Processed: [18-10-2012 10:18] Job: 023064 Unit: PG01 Source: /MILES/PKU/INPUT/023064/023064_o001_PASC 03 07 12 (.xml
Public Administration Committee: Evidence Ev 7
3 July 2012 Dame Suzi Leather assisted places scheme for independent schools to Dame Suzi Leather: What it demonstrates is that it allow poor people to go to those schools. Surely, what would be an advantage for Parliament to be clear you did chimed in with that thinking. In essence you about its intentions and to give its regulators a clear were mounting an investigation into independent legal framework to apply to the sector it regulates. schools that chimed in with government actions at the time. Q67 Lindsay Roy: It seems to me that some people Dame Suzi Leather: It had absolutely nothing to do are putting two and two together and making five with that. here. Is there anything more you could have done to the Charity Commission’s public benefit guidance to Q60 Robert Halfon: Did any member of the last make it more robust and comprehensive? Government have a conversation with you about what Dame Suzi Leather: I think the guidance we provided you were doing, suggesting that you should do the was excellent. We were wrong in one very significant investigation that you did into independent schools? respect, but it was one. Dame Suzi Leather: You mean providing the guidance. Q68 Lindsay Roy: Was that highlighted in any way to you? Q61 Robert Halfon: Did any member of the last Dame Suzi Leather: It was one of the findings of Government ask you to do what you eventually did? the judgment. Dame Suzi Leather: The 2006 Act requires the Charity Commission to provide guidance on public Q69 Lindsay Roy: But prior to that. benefit. Dame Suzi Leather: No. We were confident that what we had was right. We did one thing that in retrospect Q62 Chair: But did you have any conversation with I rather wished we had not. It was a sin of omission Ministers about issuing the guidance in the form that rather than commission. We should have looked in the you did? assessments we did at a school that was demonstrating Robert Halfon: Did Ministers ask you to do it? What public benefit only through partnership activity. If we conversations did you have? Are you able to publish had done that, we would have nailed the lie being the conversations you had with the last Government? pedalled about us that we were interested only in Dame Suzi Leather: We were able to reassure bursaries. Do I have regrets about the last six years? Ministers that we were going to do what the Act Yes; that is a regret. required us to do. Did I have a conversation with Ministers about what the content of the guidance Q70 Lindsay Roy: But the guidance was completed should be? No. in good faith, following extensive consultation. Dame Suzi Leather: It absolutely was, and in most Q63 Chair: Was there any conversation that respects it has stood up extremely well. The main indicated an understanding that you were going to concern, as the 2006 Bill was going through, came have a go at the independent sector? from religious organisations. It was not so much Dame Suzi Leather: No. public schools but religious organisations who felt that somehow this piece of legislation was part of a Q64 Chair: Absolutely not? secularising drive and many of the religious Dame Suzi Leather: Absolutely not. organisations would be driven out of charitable status. Chair: That is an important reassurance. Q71 Chair: Do you think that was the intention of Q65 Alun Cairns: Does this not demonstrate the risks that the chairman of the Charity Commission the legislation? faces if they have an active political background? Dame Suzi Leather: I do not think that was the Chair: We must protect Dame Suzi. She does not intention of the legislation, nor has that been the have an active political background. impact. Again, I would urge you to read the guidance Alun Cairns: A blatant political background. we provided for charities that advance religion. Chair: Personally, I think “blatant” is a little strong. Charlie Elphicke: Patent. Q72 Chair: I am sure we are going to look at that in Dame Suzi Leather: No more blatant than anyone our review. who is a member of the Conservative Party or Liberal Dame Suzi Leather: I think that was an excellent Democrat Party. If you call that blatant, then blatant piece of work we did. You chose not to define religion it is. I am simply a member of a mainstream political in the 2006 Act either, so again it was quite a party. Does that compromise my role as the chair of complex matter. the Charity Commission? I do not think it does. Q73 Chair: You really think the legislation is fake. Q66 Alun Cairns: But doesn’t the line of Dame Suzi Leather: You did not define “public questioning you have just been exposed to benefit”, “poor” or “religion”. They are all rather demonstrate the risk of undermining the integrity of important aspects of the legislation. the chairman of the Charity Commission with a political background, such as being a member of a Q74 Lindsay Roy: Could it be said that that was an political party? abdication of responsibility? cobber Pack: U PL: COE1 [E] Processed: [18-10-2012 10:18] Job: 023064 Unit: PG01 Source: /MILES/PKU/INPUT/023064/023064_o001_PASC 03 07 12 (.xml
Ev 8 Public Administration Committee: Evidence
3 July 2012 Dame Suzi Leather
Dame Suzi Leather: It is for you to make that Q79 Chair: I find that very useful. I am sure we will judgment. I certainly think you could have been bear that in mind. In your previous session with us, more helpful. you said you expected an increase in the number of complaints to be made against the commission for Q75 Chair: That is a very helpful comment. The new non-intervention. Have you had such an increase? job description that has been issued to your successor Dame Suzi Leather: I am afraid I cannot remember includes a new responsibility “for regulating that, off the top of my head. I do not think we had a independently and impartially, ensuring the regulatory very significant increase, but I will furnish you with requirements are proportionate to the risks”. If that the figures. had been in your job description, would you have conducted anything differently? Q80 Chair: You were explaining that the squeeze on Dame Suzi Leather: I do not think so. resources would inhibit your activity and therefore you would get more complaints about non- intervention. Q76 Chair: You think that is what you did. Dame Suzi Leather: That is inevitable in time, but I Dame Suzi Leather: I do think that is what I did. think it is credit to how we as an organisation are There are other aspects of the changes to the job dealing with the changes we have had to make. We description that we might want to discuss, because I have been very successful at shifting demand away think they are significant. from direct phone calls, e-mails, letters and so on to the web. The information we provide on the web has Q77 Chair: Do you think that is an important always been fantastic, and in my six years it has really emphasis to make in the job description? changed. Increasingly, charity trustees are finding Dame Suzi Leather: To be impartial and to act what they want from our website, and that is well and independently? good. Another part of our strategy moving forward, Chair: And proportionately to the risks. which is going to help in the demand management Dame Suzi Leather: Of course, and that is absolutely business, is the work we are doing through our approach, and I think is well expressed in our new partnerships with the umbrella bodies. risk framework. But there are some quite interesting changes in the job description of the chair, which you Q81 Chair: We will come to umbrella bodies. Could will be aware of because I believe you approved it. I ask about resources? Your budget, compared with other regulators, is rather small: just less than £26 Q78 Chair: We did not approve it; we took note of it. million, compared with Ofcom at £141 million, and Dame Suzi Leather: For instance, the new job yet you are regulating an extremely large sector. What description no longer says that the chair of the additional work would you have carried out if you had commission is responsible for leading the board and more funding? directing the commission’s strategic development Dame Suzi Leather: You are right that the funding is policies and plans, or ensuring that the commission pretty slim, and it has been falling, year on year, since realises the board’s strategic plans for the future, 2007. In the last spending review, we had a minus five year-on-year settlement, and in this spending review including its contribution to legislative reform, which we have had a minus 33. By 2015, in real terms, we I would have thought is particularly important. It no will have only half the number of staff we had in longer includes advising the Cabinet Office on the 2005, and yet our statutory objectives and functions appointment of board members and ensuring their remain the same. The sector remains broadly the effective induction and support, or in establishing same; it is remarkably stable at around 160,000 to monitoring and reviewing governance structures, 165,000 organisations. Given that, the demand on the systems and processes; and ensuring compliance and organisation is not going to change greatly. We have maximising the effectiveness at both board and had to work extremely hard to ensure we can do the individual level. job we currently do. If we had more resource, we It is a slightly different emphasis, which is one that would be able to do even more monitoring and you might want to look at, but what particularly struck outreach work and give more one-to-one advice. We me was the person spec. It talks about seeking are having to pull away from giving one-to-one somebody who has an established reputation and advice, rather than increase it. Look, for instance, at experience or knowledge from one or more of the the money we have had for counter-terrorism. Do you private and charity or not-for-profit sectors. It rather want me to say this now? crucially misses out the public sector. I would say that, if you had experience only of the private sector, you Q82 Chair: On the regulatory side, is it realistic to might have rather little understanding of the charitable expect the Charity Commission to regulate 160,000 sector. One of the things you might want to test is a charities? Should we be relying much more on the real understanding of and perhaps commitment to the Inland Revenue? Companies House does very little values of the charity sector, and particularly the notion regulation. It files companies’ accounts but does not that most of the charity sector is not the big household regulate companies. Is that what the Charity names but very small local organisations. There is a Commission is becoming, if its resources are more real danger because of changes that are happening in and more constrained? commissioning that, rather than have a Big Society, Dame Suzi Leather: There is a spectrum to the we have a society of the big. activities that the regulator of this aspect of civil cobber Pack: U PL: COE1 [O] Processed: [18-10-2012 10:18] Job: 023064 Unit: PG01 Source: /MILES/PKU/INPUT/023064/023064_o001_PASC 03 07 12 (.xml
Public Administration Committee: Evidence Ev 9
3 July 2012 Dame Suzi Leather society needs to be able to do. Clearly, there is a very Q85 Lindsay Roy: Rightly, you have given priority important compliance and enforcement aspect and that to expectation management; indeed, you indicated in remains one of our absolute priorities, but there has the last session that, given the financial constraints, always been an important support and advice-giving you would do things differently and more efficiently, function. That is much more important in the charities stop doing things that other organisations perhaps sector than it perhaps is in other areas of society and could do better, build up self-reliance in the sector and the economy, precisely because of the point that most undertake fewer hand-holding exercises. How charities are run by volunteers. In law, many charities successful has that strategy been? What have you have to come to us to give permissions to do various done to facilitate it? activities: sell land, and so on. One of the things we Dame Suzi Leather: I think our strategic review was have said in our response to Lord Hodgson is, “Please well received by the sector. The sector not only values take away some of that burden. Give charities more us as a regulator but understands the great difficulty autonomy to run their business without having to we are in. It is reassuring that, throughout all the come to us.” We are already taking steps to try to difficulties you have alluded to, public trust and minimise the burden on us as a regulator. Would this confidence in charities has held up and increased. be better if it was handled by HMRC? With the Tomorrow, we shall be publishing some figures that greatest respect to colleagues in HMRC, no. show that public trust and confidence in charities is greater now than it was in 2010, 2008 and 2005, when Q83 Chair: Not in their present state. we last did these independent surveys. That is Dame Suzi Leather: We have a very important role, important because Parliament set increasing public trust and confidence as one of our objectives. It is box going forward, in protecting charities and their assets. ticked; we are able to do that, and continue to do that. If something goes very wrong in a charity, the police I referred earlier to the partnership working, which and the courts are going to deal with the criminal was one of our strategies going forward. That has aspects, but we are there to ensure that the charity is been enthusiastically received by the sector. We are put back on track. You have rightly praised the report now working actively with 26 umbrella organisations we now publish yearly on that compliance work. What that represent about a quarter of the charities on the is remarkable about it is that that is work that makes register, so there is quite extraordinary coverage by sure wrongdoing is tackled, but the charity is rescued working with organisations that themselves represent from that difficult period in its life and is put back on many particularly small organisations. They are keen track and is there for the public, because charitable to do that. assets are there in perpetuity; they do not just The other thing that is going very well is the work we disappear into the ether. They need to be protected are doing with the Institute of Chartered Accountants and governed. for England and Wales and the Institute of Chartered Secretaries and Administrators. They are matching Q84 Chair: On the question of counter-terrorism some of their people with charities and reviewing their work, are you able to say that that is being protected financial controls and so on, giving free advice to and properly funded, or is that at risk as well? those charities, then compiling the learning from those Dame Suzi Leather: We took great steps, in my six visits, and giving it back to us so that we have a good years, to try to increase our capability in this idea of whether there are any changes we need to important area of our compliance and enforcement make, either in our guidance to charities or in other work. I am pleased to say that in 2007 we were given areas. another £1 million on our baseline to do this. That enabled us to recruit and train more investigators and Q86 Lindsay Roy: You are sharing effective people who could monitor what was going on. We set practice. up a specific monitoring unit. That was important. We Dame Suzi Leather: We are sharing effective practice, also strengthened our relationship with the police and and building on the existing infrastructure and security services and, I am pleased to say, are playing expertise within the sector. I am not talking about a full part in the Prevent strategy. We then lost that sub-regulation or co-regulation; I am talking about money and had to use our own money from other parts delivering support and advice in a way that matches of our budget to protect that area of work. I am the existing organisations in the sector and helps us to pleased to say that the terrorist abuse of charities push up our compliance targets, because they will be happens very rarely, but that it happens at all is able to ask their members to get their accounts in on something we must do everything to protect against, time and so on. It is in the public interest that we do so whenever there is any allegation about this, we take this, and it is in the interests of the umbrella bodies, it extremely seriously. That has not been affected, but because we will be able to drive up their status and our ability to do outreach work and to support the membership at the same time. sector in protecting itself has been affected by the loss of that £1 million. I am reasonably optimistic that we Q87 Lindsay Roy: How satisfied are you that there may get some more money from the Home Office has been appropriate professional development and again for this area of our work, but I do not know the training in umbrella bodies? answer to that yet. I very much hope we are, because Dame Suzi Leather: On boards? this is a hugely important area of work. Chair: We will certainly take that on board, and I am Q88 Lindsay Roy: On the boards of umbrella bodies sure we would support you in that. and the board themselves. cobber Pack: U PL: COE1 [E] Processed: [18-10-2012 10:18] Job: 023064 Unit: PG01 Source: /MILES/PKU/INPUT/023064/023064_o001_PASC 03 07 12 (.xml
Ev 10 Public Administration Committee: Evidence
3 July 2012 Dame Suzi Leather
Dame Suzi Leather: Of individual charities? are seen as relevant to those small charities that are not registered with the Charity Commission, and, if Q89 Lindsay Roy: The professional development so, in what way? and training of umbrella bodies to fulfil the role. Dame Suzi Leather: It is quite a difficult question for Dame Suzi Leather: They would probably tell you me to answer, because we get involved in charities that they could always do with more support and that are not registered only if there are regulatory advice. There is a strong case to be made for issues with them. They are all regulated by us, supporting them, but I am not advising that you take however small or large they are; they only have to further resource from the Charity Commission to do register when they get to the threshold of £5,000. If it; it should come from elsewhere. they are not on our register, their knowledge of us is perhaps less, but they can all use the wonderful Q90 Lindsay Roy: Are you encouraging umbrella guidance, help and advice on our website; that is bodies to share their practice? available to all. Dame Suzi Leather: One of the good things that umbrella bodies often have is a system of quality Q95 Greg Mulholland: Do you think there is an standards for their member bodies. We, in the past, issue in terms of the funding and, therefore, that have acknowledged those quality standards and given service will be less available to those charities, and them the tick of approval of the Charity Commission. perhaps it would be more appropriate for some of the I think that helps to raise governance levels in a non- other bodies to be offering that sort of service rather regulatory but quite an effective sense. That is a strong than the regulator? part of our partnership approach as well. Dame Suzi Leather: The small charities sector has its own umbrella bodies, and we have made sure that Q91 Lindsay Roy: In a recent survey, over half of they are in the vanguard of our partnership strategy. the public think that there are too many charities. Is We are trying to ensure that they get as much support that a problem for the sector? as they possibly can. Dame Suzi Leather: It is a bit like saying there are too many people or businesses. We ought to celebrate Q96 Greg Mulholland: The key issue in terms of the the fact that there are lots and lots of charities and that way the commission is currently set up is the more people want to make society and the world a registration level. Do you think that is something that better place through their own voluntary endeavour. should be looked at by your successor? Do you think That is absolutely wonderful. As a regulator, we the suggestion that small charities should be able should certainly not be in the business of closing voluntarily to register with the Charity Commission if down or saying you can have only a certain number of they have an income of less than £5,000 would widen organisations doing any particular thing. Interestingly, the relevance, if you like, of the Charity Commission? yesterday I was talking to a Japanese representative of Dame Suzi Leather: There is a difficult balance here, an umbrella body for voluntary organisations. I asked because if you ask the public what they think, as we him this question. He said they used to have a system did when we were consulting on our strategic review, whereby you could have only a certain number of charities working in a particular area. They regarded they believe that charities should be registered that as a terrible brake on the development of civil regardless of how big or small they are. They think society; they got rid of that approach. that, because they have the reputational and possibly fiscal advantage of charitable status, they should all be on the register. It would be pretty difficult for us Q92 Lindsay Roy: In essence, competition is a healthy thing. to manage the work if we were suddenly to say they should all register. The 2006 Act raised the threshold Dame Suzi Leather: I think the flourishing of the human spirit as exemplified in charitable activity is a from £1,000 to £5,000, and that came into effect in good thing. 2007. My feeling is that it is about right where it is. There are many charities on the register who are under £5,000, because they were there before 2007. There Q93 Greg Mulholland: How would you respond to are about 50,000 charities on the register with an the criticism I am sure you have heard that the commission does not really do very much, and income of under £5,000. certainly not enough, to help those many small charities? Q97 Greg Mulholland: I suppose your simple, Dame Suzi Leather: I would respond rather robustly, straightforward message would be— because we do a great deal. Look at our website; part Dame Suzi Leather: Keep it where it is. of it is dedicated to small charities. In our partnership strategy, we are deliberately working with Q98 Greg Mulholland: If you did want to address representatives of small charitable organisations. We the public’s concern, which you acknowledge is there, have focused quite a lot on ensuring that small that would need to be resourced. charities get the support they need. Far from ignoring Dame Suzi Leather: Indeed. them, we have deliberately tried to do as much as we can. Q99 Chair: Moving on briefly to bogus charities, do you think they are an increasing problem and are Q94 Greg Mulholland: It is a lot to do with being used for tax avoidance? “Bogus” might not be perception and the registration level. Do you think you the right word. cobber Pack: U PL: COE1 [O] Processed: [18-10-2012 10:18] Job: 023064 Unit: PG01 Source: /MILES/PKU/INPUT/023064/023064_o001_PASC 03 07 12 (.xml
Public Administration Committee: Evidence Ev 11
3 July 2012 Dame Suzi Leather
Dame Suzi Leather: I do not think we have any Q107 Charlie Elphicke: Do you recognise that there evidence that they are an increasing problem. There is substantial public concern about it? has not been much change. We have good interchange Dame Suzi Leather: I do recognise there is concern. with HMRC. Clearly, we are not responsible for the tax aspects. Q108 Charlie Elphicke: I am a bit confused. I have looked at the annual report and accounts and cannot Q100 Chair: The Inland Revenue think they are a see any reference to those issues that have caused problem; it was one of the main arguments used for substantial public concern. Why is that? the cap on tax relief on charitable donations. Dame Suzi Leather: The setting up of a system for Dame Suzi Leather: The tax aspects are not for the the regulation of public charitable collections by the commission but for HMRC. Charity Commission is included in the 2006 Act but has never been brought into force. We were never Q101 Chair: I appreciate that, but the argument they given any money to do this, and we declined to do used in favour of that was that there were too many it. There is a strengthening, rather good and wholly bogus charities and they were being used as tax- appropriate system of self-regulation of this field. My avoidance mechanisms. view is that that self-regulation approach should be Dame Suzi Leather: That did creep into their continued and strengthened, rather than that the argumentation at one point. Charity Commission should be asked to take this on. If, following the Hodgson review, the Government are Q102 Chair: Far be it from you to disagree, but it is minded to abandon the self-regulation approach and for you to disagree if you think they were wrong. ask the commission to take it on, we would need a Dame Suzi Leather: It is a matter for them why they significant extra resource to do it. said it, but they certainly did not say it because the commission were putting in the public domain any Q109 Charlie Elphicke: I am puzzled by this. You evidence of it. The commission and HMRC would say were telling us earlier that in respect of the 2006 Act that, on average, there are about 100 charities a year you were a lioness in terms of enforcement; that where we have concerns and we are sharing “public benefit” had to be defined and you had to information, but not more than that, and I do not think spend hundreds of thousands of pounds of taxpayers’ that level can have been the reason for that budget money on that; and yet we come to another section of statement. the Act where you have not done anything to bring forward regulations on something about which there Q103 Chair: The situation has slightly changed. I is substantial public concern. Why not? appreciate that charities elsewhere in the European Dame Suzi Leather: That is because we have not been Union are not your responsibility, but we now have a asked to do that or funded to do it. European Court of Justice ruling that denies the right of the Government to withhold tax relief from a Q110 Charlie Elphicke: Do you not feel that is a charity that is domiciled in another European country. poor excuse, and anyone watching this today will Don’t you think that is going to bring into disrepute think, “I can’t believe that the Charity Commission the ability of people to get tax relief if they can siphon has not acted to protect the public from these off the money to a Greek charity where the regulation predators.”? might not be quite as clear as it is here? Dame Suzi Leather: It has not been made our Dame Suzi Leather: We have our hands full responsibility, and we have not been funded to do it. regulating the charities in England and Wales. It was included in the Act and was effectively taken Fortunately, we are not responsible for charities that no further. There is now a perfectly good system of are headquartered further afield. self-regulation, which I think is the right approach. To be absolutely clear, I told you earlier that if there were Q104 Chair: But it would be better if the any further cuts to our organisation we will not be Government could restrict tax relief to UK-domiciled able to carry out all our statutory functions as it is. charities, wouldn’t it? We are not and never have been in a position to take Dame Suzi Leather: It is certainly an argument for on public charitable collections, which was unfunded ensuring that all other EU countries have the same right from the start. high degree of regulation of the charity sector as we do. Q111 Chair: If somebody complains about that, you have to say, “I’m sorry, we can’t intervene.” Q105 Chair: It sounds like a fairly pious hope. Dame Suzi Leather: Absolutely. It is not part of our Dame Suzi Leather: Beyond that, I do not think it is responsibility at the moment. a matter for the commission. Chair: I think you have just made my case. Q112 Charlie Elphicke: Is it not the case that the commission could use powers it has under the Act to Q106 Charlie Elphicke: Do you recognise that there change the position and put in place regulations to is quite a lot of public concern in relation to the way deal with something that is a matter of substantial public charitable collections are made with concern? face-to-face fund raising and chugging? Dame Suzi Leather: No. We would not simply be able Dame Suzi Leather: Do I recognise it is a public to do that. It would require a great deal more from concern? government and Parliament. cobber Pack: U PL: COE1 [E] Processed: [18-10-2012 10:18] Job: 023064 Unit: PG01 Source: /MILES/PKU/INPUT/023064/023064_o001_PASC 03 07 12 (.xml
Ev 12 Public Administration Committee: Evidence
3 July 2012 Dame Suzi Leather
Q113 Chair: It is something for us to address in the to give it greater ability to give advice and regulate. legislative review. Do you agree with his recommendation? Should those Dame Suzi Leather: Absolutely. narrow parameters be removed? Dame Suzi Leather: We fully support the concept of Q114 Charlie Elphicke: Do you not agree it is a the tribunal. It is now an important part of the complete disgrace that round the corner in Oxford architecture, and we have benefited from having a Street there are predators harassing people, and it charity tribunal. It would present considerable should not be allowed? difficulty for us as an organisation if all our Dame Suzi Leather: I think the answer to this is for non-decisions or inactions could be tribunable. you to look at this in the review of the Act. If you Already a very large number of the decisions we take think that the current system of self-regulation is are tribunable. The idea that there are huge restrictions inadequate and you wish it to move to the Charity on what the tribunal can do by way of looking at our Commission, that is a matter for the review of the Act. decisions is inaccurate. Last year, we took 2,946 I have a particular disappointment with regard to decisions, directions or orders that are capable of charitable incorporated organisations under the 2006 being challenged in the tribunal. That seems quite a Act. That was introduced as a measure to prevent lot. There would be a real problem of managing if incorporated charities having to register at Companies everything could be challenged in the tribunal. If you House as well as the Charity Commission. It would think about it, in effect, it would direct our resource, give protection to individual trustees against personal if one of the reasons we decide not to do something liability suits. The sector has long wanted CIOs to be is because it is too low down and, having gone brought forward. We have been ready as an through all the risk framework approach, it is not for organisation to do that for considerably longer than a us. In a perfect world with unlimited resources, we year. I wrote to the Charities Minister in March 2011, would look at it, but we are not there. saying, “We’re ready to press the button; all systems are go at the Charity Commission end.” It is a source Q120 Chair: Because of the limitations of your of enormous frustration that I come to the end of my resources you need to be protected from a legalistic term and still we are not in a position to start that approach. work. It is a huge disappointment. Whenever we have Dame Suzi Leather: I think we do need it. It is not public meetings somebody says, “When are CIOs unrealistic to ask for some protection. going to happen?” We are in the embarrassing position of saying, “I’m sorry. We’re ready to go but the Q121 Chair: I understand the point you are making, Cabinet Office has not done what it needed to do.” and we will give it consideration. It is often suggested there should be a charity ombudsman. Isn’t the Q115 Chair: Could you furnish us with a copy of Charity Commission a charity ombudsman, or is that that correspondence? the expectation that people have but you say, “No, Dame Suzi Leather: Certainly. we’re not.”? Dame Suzi Leather: I think there is a strong case to Q116 Charlie Elphicke: Just to confirm it in my own be made for introducing a charity ombudsman to look mind, when it comes to face-to-face collections and at and test the standards of service provided in chugging, you are satisfied that the current system of charities. We quite often get letters to us complaining self-regulation works well. about standards of service in charities, and we have to Chair: I think we are asking for your personal opinion write back and say it is not for the commission. There rather than the commission’s. is not really an adequate pigeonhole in which to put Dame Suzi Leather: I think you are. those often quite important complaints, so that would be helpful. We then face the problem of how that is Q117 Chair: Are you happy with it? going to be funded. I certainly could not accept that Dame Suzi Leather: I recognise that this is an issue any money should go from the Charity Commission for many people. The commission is not in the to set up an ombudsman. I would have thought that position to take responsibility for that, and if you think asking the sector itself to cough up for that would not we should, you should take this forward in the review go down incredibly well either. of the Act. To go back to the tribunal, can I make just one point? We would like to be able to make a reference Q118 Chair: As a parting shot, in your personal ourselves to the tribunal, without having to go through opinion do you think something needs to be done? the Attorney-General. That would help us, so, if you Dame Suzi Leather: My personal opinion is that the are looking at the tribunal issues in the round, could I self-regulatory approach should be strengthened. ask you to bear that in mind?
Q119 Chair: We will look at that. Finally, on the Q122 Chair: Thank you for that. Is there anything Charities Act, arising from Lord Hodgson’s very else that you would like to add as an afterthought? comprehensive review, which exposes the terrifying Dame Suzi Leather: Are we coming to the end? complexity of the sector and the incredible challenges Chair: We are. faced by the commission, the question of the Charity Dame Suzi Leather: There are some other issues to Tribunal and its accessibility and remit has been do with the review of the Act, which we would like raised. Lord Hodgson has been recommending that you to consider; perhaps I could write to you about what he calls its narrow parameters should be widened those. cobber Pack: U PL: COE1 [O] Processed: [18-10-2012 10:18] Job: 023064 Unit: PG01 Source: /MILES/PKU/INPUT/023064/023064_o001_PASC 03 07 12 (.xml
Public Administration Committee: Evidence Ev 13
3 July 2012 Dame Suzi Leather
Q123 Chair: If you feel that would be appropriate, Chair: We echo that tribute to your staff. On the visit that is perfect. You do not need to enumerate I paid a little while ago, I was very impressed by everything verbally. everything I saw and the personal commitment of Dame Suzi Leather: I would like to reiterate what I your staff, and I underline again that we understand it said at the beginning. It has been a taxing privilege to is a very difficult and tough period when everybody chair the commission. One of the things that falls at is downsizing. It must also be difficult for you to leave the taxing end is appearing before you. I am slightly the organisation at a time when changes are having to sorry that we have focused today, perhaps inevitably, be made. on some of the rather negative aspects. For the last six Dame Suzi, can I also pay tribute to you on behalf of years, we have been a fantastic organisation; we have the Committee? You have inevitably been involved in been hugely valued by the sector; our work at the some controversies. There was one in particular we compliance end is better than it has ever been; we are had to address today, because we could not do so at more targeted and more consistent. I think we have our last session because it was sub judice. You have been extraordinarily innovative in the investment never shown any lack of courage in your role. You guidance which was published recently. I think the have given tremendous public service as chair of the public benefit guidance was excellent, with the one Charity Commission, and I think every member of the proviso that we got the “reasonableness” test wrong. Committee recognises that and Parliament recognise We steer through some pretty choppy and difficult that. Can I thank you on behalf of Parliament for what waters. We have touched on some of that today—the you have done for the Charity Commission and, business about the boundary between “political” and indeed, for your country? It has been tremendous. As “charitable”—but, on the whole, I think we do that to whoever takes over your role, I am utterly daunted deftly. Of course, we are going to get people from about how we find a successor. The complexity and both sides of the political spectrum throwing stones size of the sector is very challenging. We recognise from time to time, but as far as concerns the world that you have been fulfilling a very challenging role out there I think we are a highly valued organisation. at a difficult time, and we are extremely grateful to I want to pay tribute to all our staff, current and the you. We wish you all the very best. ones we have had to lose in recent months. They have Dame Suzi Leather: Thank you very much indeed. all been fantastic colleagues, and I have been blessed to have worked with them and my board colleagues. cobber Pack: U PL: COE1 [SE] Processed: [18-10-2012 10:18] Job: 023064 Unit: PG02 Source: /MILES/PKU/INPUT/023064/023064_o002_th_Corrected PASC 05 09 12.xml
Ev 14 Public Administration Committee: Evidence
Wednesday 5 September 2012
Members present: Mr Bernard Jenkin (Chair)
Alun Cairns David Heyes Charlie Elphicke Greg Mulholland Paul Flynn Priti Patel Robert Halfon ______
Examination of Witness
Witness: William Shawcross CVO, Government’s preferred candidate, gave evidence.
Q124 Chair: May I welcome our witness to this Statistics Authority and Ombudsman and so on, pre-appointment hearing for the Chair of the Charity particularly their independence from Government and Commission. Please could you start by identifying independence from influence from the Government. yourself for the record? We see that as our role. What we want is someone William Shawcross: I am William Shawcross. who will be robustly independent. From reading your Chair: One or two of us have to put some interests biography and your literary output, you seem not to on the record, however peripheral they may be. You be left-wing but to be decidedly right-wing. Is this a are a Director and Trustee of the Henry Jackson fair description of you? Society. The Henry Jackson Society provides the William Shawcross: I hope that my writings show Secretariat for the All- independence and have shown independent views Party Parliamentary Group on Homeland Security, of throughout my career. They have not always been which I am Chairman. I also published a pamphlet in popular on either the left or the right. I grew up, as co-operation with the Henry Jackson Society a couple you kindly pointed out, in a Labour household and my of years ago. Are there any other interests to father was a great hero to me too. He taught me the 1 declare? importance of this House as the cherished guardian of Robert Halfon: I should declare that I was a founding our liberties. So I am honoured to be speaking to you patron of the Henry Jackson Society when it was first and, if you do see fit to approve me, I would look set up and I am fairly involved with the organisation. forward to a very close relationship with this Paul Flynn: I think perhaps I had better say that the Committee because I think this Committee is vital in Henry Jackson Society organised a meeting at which helping to guard the independence of the Charity I was a prime speaker, to my astonishment. Commission, which, as you rightly point out, is Robert Halfon: To my astonishment too. essential. Chair: Various of us are also connected with various charities but we do not need to declare that, unless there are any connections with you. Q127 Paul Flynn: My enthusiasm for his life is for his periods at Nuremberg and in Government but I am Q125 Paul Flynn: Welcome, Mr Shawcross. It is a less enthusiastic for when he had the nickname of Sir pleasure to meet you in this Committee, as a Hartley Floorcross. distinguished biographer and the son of someone who William Shawcross: He never actually did cross the is a hero in my political life: your distinguished father. floor. Could we say something first of all about the pre-appointment hearing? This Committee had a Q128 Paul Flynn: Normally biographers write about pioneering role in going to America, having a look at people they admire; your principal ones are the Shah their system there and recommending it cautiously of Persia, Rupert Murdoch and the Queen Mother. here. I believe this Committee has a record that Does this betray a right-wing tendency? establishes the worth of the pre-appointment hearing, William Shawcross: I have also written about particularly recently. I think that all our decisions have Alexander Dubek, the hero of the Czechoslovak been unanimous as a Committee in taking that final Spring, and János Kádár, who rescued Hungary from decision. Can I ask first of all: if the Committee decide the horrors of the revolution of 1956. The Murdoch that you are not a fit person for the job, what would biography was actually proposed to me by my you do then? American publishers. It had never occurred to me to William Shawcross: Obviously I hope that that would write about Murdoch until the late 1980s when it was not be the case. I would be very saddened if that were suggested to me. He was just becoming a big figure the case, and I would have to reflect very carefully on in the United States at that time. I was rather surprised the reasons that led you to that decision. that I enjoyed writing a business biography as much as I did. I thought that Murdoch had created an enormous Q126 Paul Flynn: Our main interest is to establish change, particularly in this country in terms of the the independence of people like the Chair of the UK unionisation of newspapers and so on. As a journalist in the 1980s and 1990s, I was very conscious that, but 1 The declarations of interest are recorded in the Formal Minutes for the Committee’s private meeting on 5 for Wapping, many of us probably would not have September, which are published on the Committee website. jobs. cobber Pack: U PL: COE1 [O] Processed: [18-10-2012 10:18] Job: 023064 Unit: PG02 Source: /MILES/PKU/INPUT/023064/023064_o002_th_Corrected PASC 05 09 12.xml
Public Administration Committee: Evidence Ev 15
5 September 2012 William Shawcross CVO
Q129 Paul Flynn: The Shah of Persia was so of a party in the 1960s would have any involvement. successful as a leader that— However, going back two years, you said, “The Chair: Mr Flynn, can I just ask what bearing this has disaster we now face now is thanks uniquely to on independence? Gordon Brown and the Labour Party’s postmodern Paul Flynn: It is establishing the independence of the authoritarianism”. Again, that is a strongly candidate, which is what our job is. The Shah of right-wing view. Persia was so successful as a political leader that his William Shawcross: It is a strong view; I am not sure country preferred the Ayatollahs to him. that it is right-wing necessarily but I was critical. William Shawcross: My book about the Shah concentrated on his journey into exile and death. It Q135 Paul Flynn: The Henry Jackson Society is a was called The Shah’s Last Ride and it looked at his promoter of a particular view in this House, which is relationship, in flashbacks, with the Western world representing right-wing American opinion. and as a very important ally of the Western world in Robert Halfon: I have a point of order, Chair. First the Gulf throughout the 1940s, 1950s and 1960s, until of all, the Henry Jackson Society has a significant he fell in 1979. His fall was obviously a reflection number of Labour MPs, including the MP for of his own misgovernment, to a certain extent. It is Birmingham Edgbaston. important also to recognise that in the 1960s the Shah Chair: I do not think that is a point of order. was one of the most progressive leaders in the Middle Robert Halfon: Secondly, this is not a discussion East. I would also suggest to you that, whatever the about political biographies and the Henry Jackson errors and shortcomings—and they were very serious Society. We should be discussing the role of the in the Shah’s Government—the Government that has Charity Commission. followed has been a catastrophe for Iran, the Iranian Chair: I think, Mr Flynn, that you are making a point people and indeed for the world. perfectly legitimately but I would be very grateful if you could be as brief as possible because we have Q130 Paul Flynn: A difficulty in this Committee is many other questions to ask. that the previous holder of your office was not Paul Flynn: Henry Jackson’s personality was rather attacked by this Committee at any time—one Member more diverse than the Henry Jackson Society. of the Committee did attack her— Chair: This is not about your views, Mr Flynn; this Chair: Can you get on with it? We have limited time, is about the candidate’s objectivity. Please ask about Mr Flynn. that. Paul Flynn: It is important to get this point out. It is Paul Flynn: I can understand your obstruction to this the crucial point of this morning. She was attacked for because you clearly have a partisan view on this, political bias as being a Labour Party member. Now, Chairman, not for the first time, may I say. If I may could you tell us whether you are a supporter of the continue—as usual struggling again the bias of the Conservative Party or a member of the Conservative Chairman on this—my role on this Committee is to Party? introduce some impartiality and do the job that we William Shawcross: I have never been a member of should be doing, which is to ensure that you are not the Conservative Party. When I was young I was, as going to face accusations or suspicions from the my father was, a member of the Labour Party for a charity bodies, who are bruised and battered at the very short period. When the Social Democrat Party moment, that they have someone who is going to do started, with David Owen and the Gang of Four, I the political hatchet job that Maude is doing certainly supported them at that time. I have never elsewhere. You would be an independent person: can been a member of another party since then. you assure us of that? William Shawcross: I can assure you of that. If you Q131 Paul Flynn: Before the last election you said, have any misgivings I would wish to come back at “Only a vote for the Conservatives offers any hope of any stage and talk to this Committee, whenever you drawing back from the abyss”. wish to do that. I am absolutely convinced, as you are, William Shawcross: I do not remember the context in Mr Flynn, that the independence of the regulator is which I said or wrote that. If I wrote it, I stand by it. vital and it would be utterly wrong of me to infringe upon that independence in any way. I would not do so. Q132 Charlie Elphicke: Can I ask a quick supplementary on that point? Can you assure the Q136 Chair: The outgoing Chairman did say that Committee that your previous membership of the protecting the independence of the Commission was Labour Party will not make you biased towards the hugely important. She obviously valued that. Labour Party or indeed any political party? Personally I think that was reflected in her personal William Shawcross: I certainly would give you that conduct at the Commission. Are there any particular assurance, and I believe it to be absolutely true. steps that you would take in order to reinforce that independence? Q133 Paul Flynn: When were you a member of the William Shawcross: Obviously I would wish to resign Labour Party? all my memberships of the Henry Jackson Society and William Shawcross: When I was a very young person other charities with which I am involved. I think the in the 1960s. Henry Jackson Society is a great society and I am very pleased that they had you come to speak, Mr Flynn. Q134 Paul Flynn: In the 1960s? I think we can Henry Jackson himself was a great American senator absolve you of any accusation that your membership who stood not just for right-wing views but for cobber Pack: U PL: COE1 [E] Processed: [18-10-2012 10:18] Job: 023064 Unit: PG02 Source: /MILES/PKU/INPUT/023064/023064_o002_th_Corrected PASC 05 09 12.xml
Ev 16 Public Administration Committee: Evidence
5 September 2012 William Shawcross CVO freedom and liberty everywhere. That is what the Chair: Can I just remind Members of the Committee society stands for now. I would do everything that we are not to use this as a platform to express our necessary and speak to the chief executive of the own views. This is an opportunity for us to ask Charity Commission to make sure I was seen to be questions of the candidate and we have an obligation always acting in an independent manner. to exercise our impartiality. Greg Mulholland: With respect, Chair, we have the Q137 Greg Mulholland: I am happy not to ask my job of deciding whether the candidate has sufficient questions at the end because I think, frankly, that these impartiality and independence. That is precisely what are much more important than some of the later Mr Flynn and I are pursuing, which I think it is the questions, given our limited time. Can I ask you, Mr most important question we have to ask today. Shawcross, about the article that Mr Flynn referred to, Chair: You are asking perfectly legitimate questions which you wrote on 29 April 2010 in the National but this is not an opportunity for you to express your Review Online? You said some quite interesting own views. things in that. Do you fully accept and acknowledge Greg Mulholland: No, but I do not believe I have, that there are people who belong to or actively support with respect, Chair. I believe that I have questioned all political mainstream political parties in this country Mr Shawcross on his previously expressed views, and that their contribution to the charitable sector is which I think are very troubling in the light of this hugely welcomed? proposed appointment. William Shawcross: Of course. Chair: Now you are giving your view. You can give your view later on, in the private session, but not Q138 Greg Mulholland: I would ask you, in that during the questions. Do you have any further case, about the very silly and in some cases untrue questions? things that you said about the Liberal Democrats in Greg Mulholland: No. that article, including saying that we want total control Chair: Thank you. from Brussels, which is quite literally untrue and therefore quite dishonest, I am afraid, and also Q140 Priti Patel: Mr Shawcross, I would like to parroting the nonsense that was coming from move on to the actual position of Chair of the Charity Conservative head office at the time that was saying Commission. The outgoing Chair said that she did not a vote for the Lib Dems would help Brown, when here think it was an easy time to be taking over the we are in a coalition, which is working pretty well, Commission. I am particularly interested to hear from between the Conservatives and the Liberal Democrats. you about your style of leadership, your priorities in Would you, first of all, say you were wrong, but would your potential position and what distinctive things you you also accept that it will be quite hard for Liberal are looking to achieve in your first year in the Democrats and possibly members of the Labour Party position. to have confidence that you are an impartial, William Shawcross: I would want to learn a lot first. independent Chair because of those comments? I am very conscious that I have a lot to learn about William Shawcross: I am delighted, of course, at the the charitable sector and the work of the Commission. success of the coalition that you allude to. I hope that As for my leadership style, one of the things I am most proud of doing is having helped set up, create in everything I do in the Commission, if you see fit to and lead for 10 years Article 19, which was the approve me, I would show my neutrality. Whatever International Centre Against Censorship, which was political views I expressed two or three years ago are created in 1986. I was the founding Chair of that and irrelevant; I would be an independent regulator. worked very closely with the two chief executives. The first of those was Kevin Boyle, who has sadly Q139 Greg Mulholland: I am afraid that I do not died, and then Frances D’Souza, who is now in an think they are irrelevant, certainly when it comes to eminent position in Parliament, as you know. She and the confidence issue. You must accept that confidence I worked very closely together. I think the relationship is something that is essential for the role. For there between the CEO and the Chair is absolutely vital in to be confidence that you are impartial I think those any such organisation and I would hope to have a comments are troubling. I will ask you another very close working relationship with Sam Younger. question. Dame Suzi Leather was a member of the Happily, I worked with him before when he was Labour Party. You clearly said, right before the last Director of the World Service and I was on the general election, “Vote Conservative”. It seems to Foreign Office’s World Service Consultative Group, many people, unfortunately, that we have a situation which was created in order to oversee the World where this appointment is too political and I do not Service output in different languages. I think he did a think that is acceptable. very fine job there and, by all accounts, he has done William Shawcross: I am very sorry to hear you say a very fine job so far at the Commission in that. I am not a member of any party, as I said. I have restructuring it. never been a member of the Conservative Party. I did As for what I would hope to achieve in the first year write those things before the election and obviously I of the job, if you approve me, I would certainly hope cannot resile from them. I apologise if they caused to go around all the Commission’s offices around the you undue offence but that was my view at the time: country. I would get to know the members of the that it was time for a change in government. As I said board very well. I would speak to as many charities just now, I am delighted that the Liberal Democrats as possible, both large and small. The small charities are part of this coalition. are really the backbone of the charitable sector. Of the cobber Pack: U PL: COE1 [O] Processed: [18-10-2012 10:18] Job: 023064 Unit: PG02 Source: /MILES/PKU/INPUT/023064/023064_o002_th_Corrected PASC 05 09 12.xml
Public Administration Committee: Evidence Ev 17
5 September 2012 William Shawcross CVO
160,000 charities in this country, the vast majority are Q144 Chair: It was about trustees declaring their small by the standards of the large ones. Sometimes remuneration. they feel left out and sometimes they find the William Shawcross: Yes, certainly they should regulations too tough. That is one of the things I declare it. Also, in some charities, some very large would want to look at. Someone came up to me charities in particular, the job of trustee is very yesterday and said that they were a member of a time-consuming. I can see why it is thought necessary charity in south London which was swamped with red to remunerate them for some of their time spent. On tape and asked whether I could help. I said, “That is the whole, I think that should be the exception rather what the Commission is there to do. The Commission than the rule. Certainly for small charities the is there to regulate you and to do so in the least voluntary paradigm has been wonderful for hundreds onerous way.” I would hope that, if there are such of years and it should continue to be the norm. changes that need to be made, I would be able to help the chief executive implement them. Q145 Robert Halfon: In her last hearing with our Committee, Dame Suzi Leather described her time in Q141 Priti Patel: What do you think the immediate the Chair as “a taxing privilege”. How does your challenges are for the charitable sector? experience in the charitable sector up to now prepare William Shawcross: The charitable sector is going you for this task? through hard times because the country is going William Shawcross: I think there is very little that through hard times. That is reflected in donor would prepare me for this task as it is a very big task. weariness and the greater demands upon the sector I have worked in the charitable sector—not full time because of the economic crisis this country, as well as of course, but pro bono—for many years. I worked many other countries, is going through. So charities with Article 19, as I said. I was on the board of the will be called upon to do more at a time when perhaps Disasters and Emergency Committee. I helped create there are fewer resources. Certainly the Commission an international voluntary agency called International has fewer resources than it used to have: in 2005 there Crisis Group, which was set up after the debacle in were 500 staff in the Commission and by 2015 there Bosnia, to try and make international responses to will be only 250. So the resources the Commission crises, such as Bosnia or Rwanda, better. That was to can deploy are limited and they have to therefore be try to prevent conflict and save lives. I was on the deployed much more effectively. Dame Suzi has made board and the executive committee of that board for a very good start, as far as I understand, on 10 years. That was a very important organisation and downsizing the Commission while continuing to meet I think it has done a lot of good. However, it did not its regulatory needs. I would certainly see that as an require the sort of work that the Charity Commission absolute priority. would require. This is advertised as a two-day-a-week job, although I know that Dame Suzi did it as a Q142 Chair: What particular aspect of the Hodgson three-day-a-week job. I suspect that at the beginning, Review do you regard as the most important? at any rate, it would be much more than two days a William Shawcross: I think the fact that Hodgson week and I would need to devote a lot more time to celebrated the independence of charities and the role it to in order to understand it and do it properly. of the trustees in making sure their charities stick to Obviously I would be more than prepared to do that. their last, if you wish, and remain properly governed in every aspect. One of the most important things is to emphasise that it is the trustees who come first and Q146 Robert Halfon: What were your experiences the trustees who bear principal responsibility for the of having to deal with the Charity Commission when running of charities. I know that the Commission has working with Response? a couple of misgivings about some of Hodgson’s William Shawcross: I have always found my dealings recommendations. I must say that it was a remarkable with the Charity Commission, such as they have been, report done in a rather short space of time and it gives to be terrific. The website has improved enormously a marvellous overview of the sector, its problems and in recent years; it is now very easy to file reports its successes. The concerns the Commission has quickly and without problems. In this changing expressed are about the payment of trustees and technological world, websites and other digital raising the threshold of registration from £5,000 to innovations change all the time, so one has keep £25,000. The charities beneath that new threshold, if abreast of that. it were implemented, would still be there but there would be a shadow world—as someone described it; Q147 Robert Halfon: Response was removed from I am not sure if that is too harsh—and that is certainly the Register of Charities at one point. What was the one of the things that, as Chair, I would wish to look reason for that? at to see if that concern is correct. William Shawcross: It is on the register now. I am ashamed to say that it was because the reports were Q143 Chair: Have you developed views on the filed rather late. It is a tiny charity that I set up when remuneration of trustees in relation to the threshold my mother died in an accident and some insurance for registration? money came to me. I did not want to spend it on William Shawcross: I can see why the remuneration ordinary things, so I set up this little charity to help of trustees is thought to be necessary and why Lord refugees and to give little bits of money to people who Hodgson thought— had suffered for their political views. cobber Pack: U PL: COE1 [E] Processed: [18-10-2012 10:18] Job: 023064 Unit: PG02 Source: /MILES/PKU/INPUT/023064/023064_o002_th_Corrected PASC 05 09 12.xml
Ev 18 Public Administration Committee: Evidence
5 September 2012 William Shawcross CVO
Q148 Alun Cairns: You referred to the time William Shawcross: The public benefit test applies commitments. Your predecessor worked three days a across the board. It is the law and it applies to every week in the role. This has been reduced to two days a group, whether it is a minority religious group, a week. There have been some changes to the school or anything else. With the greatest respect, I responsibilities and obligations; how confident are you am not quite sure what you mean about it in terms of that two days a week is reasonable and fair, and how its application to minority religious groups. much time would you plan to spend in the role? William Shawcross: As I just said in my answer to Q153 Robert Halfon: I am going to come onto that. the previous question, I suspect that it will be more There is one particular group, the Plymouth time-consuming than that, certainly to begin with Brethren— when getting around to all the offices throughout the Paul Flynn: Isn’t this private interest, Chairman, for country and meeting with charities large and small. I which you stopped Mr Mulholland asking a question? think that as little as two days a week is optimistic, at Chair: No, it isn’t; he is asking about a particular least to begin with, and if it needs more time, I will case. give it more time. Robert Halfon: They believe that they have been discriminated against because they have been refused Q149 Alun Cairns: Why do you think there has been charitable status as they are accused of not having a change from three days a week to two days a week enough public benefit in terms of their religious and do you think the reduction in salary is reasonable? activities. Yet, an organisation like the Druids, for Your predecessor received £80,000 a year and the example, is given charitable status by the Charity salary on offer to you is £50,000 a year. Commission. I just wondered what your view is on William Shawcross: I think the reduction in salary is that and if you are going to review those kinds of perfectly appropriate for the reduction in time decisions if you do become the Chair? expected to be spent. I am not really qualified to say William Shawcross: I think the case of the Exclusive why the job was reduced. The job description for the Brethren is now before the Upper Tribunal so it is sub job was not something that I was involved in. judice, so I should not really comment on it.
Q150 Charlie Elphicke: Mr Shawcross, the Charity Q154 Chair: Mr Shawcross, you are free to comment Commission has had a 33% reduction in its budget in on it. real terms. Times are very tough because the nation’s William Shawcross: Am I? finances were progressively destroyed over the past Chair: I am advised that the tribunal does not decade. How confident are you that, with a reduced constitute sub judice. budget of £21.3 million a year by 2015, the William Shawcross: I do not know the details very Commission will be able effectively to regulate the closely but I am sure the Commission has not so far displayed an anti-Christian bias, and I would certainly third sector? not wish it to do so if I were the Chair. The work of William Shawcross: The Commission has to the Exclusive Brethren, as I understand it, is involved effectively regulate the third sector; that is its task. in the public sector as well as for the benefit of The reduction has been agreed and it is the members of that religious order, if that is the right Commission’s responsibility to see that, in whatever word for it. In other cases, like with the Masons, the way it needs to, it can continue with that task. It will Upper Tribunal has already decided that the fact it is not be easy, I can see that, but it has to be done. With a small group does not mean that it cannot display the digitalisation of so much more all the time it public benefit. I imagine that that might be the same becomes easier to meet that requirement. Like all outcome in terms of the Exclusive Brethren. other official or semi-official bodies its task will be more difficult now than it has been in the past. Q155 Robert Halfon: During the passage of the 2006 Act, Edward Miliband, who was the then Q151 Charlie Elphicke: Lord Hodgson, in his Minister, said the public benefit test for religious report, set out recommendations that one should think groups would not be onerous and that religions had about charging charities to register and file their nothing to fear. As this clearly was the intention of annual returns. What is your perspective on this? On Parliament at the time, will you give the assurance the one hand, it would cost charities money but, on that you will uphold this principle? the other hand, it would be a more stable form of William Shawcross: Absolutely, yes. funding so you would not be subject to the vagaries of the nation’s finances. Q156 Robert Halfon: Would you be prepared to William Shawcross: Absolutely. It is something that have a meeting with concerned minority religions who needs to be looked at very seriously. I think it is a feel that they have been discriminated against? sensible suggestion. It is unprecedented and will cause William Shawcross: Yes. I should say, in that context, a bit of grief amongst charities. However, many other that I am aware that the job of the Commission is to regulatory agencies charge for their regulation—for be the regulator of the sector, not to hold the hands of that privilege—and it is something that we may have every single charity that is feeling nervous. I know to come to. that this is a difficult line to draw and I would want the Commission to be seen as totally sympathetic to Q152 Robert Halfon: Where do you stand in relation any concerns charities have. Nonetheless, the to minority religious groups on the public benefit test? principal job of the Commission is to regulate. cobber Pack: U PL: COE1 [O] Processed: [18-10-2012 10:18] Job: 023064 Unit: PG02 Source: /MILES/PKU/INPUT/023064/023064_o002_th_Corrected PASC 05 09 12.xml
Public Administration Committee: Evidence Ev 19
5 September 2012 William Shawcross CVO
Q157 Robert Halfon: The Brethren—of the many William Shawcross: I did not suggest that. religious groups that are associated with the Charity Commission, recognised as charities like the Druids Q162 Paul Flynn: This is a nonsense, isn’t it? Most that I mentioned—have thousands of members and people with common sense would come before this hundreds of churches all over the country. They seem Committee and say that of course public schools and to be discriminated against unfairly and accused by privileged schools should not be regarded as charity. some of— It damages the whole system if you have a sector for Chair: I must remind you not to give your own views. charities which are helping the relief of poverty and Robert Halfon: I said, “Accused by some”. I you have some that are helping the most privileged welcome that you have said you will look at this. Can people in the country. I finally ask what approach you will take to the William Shawcross: Education has always been question of public benefit if you were Chair of the regarded as a charitable purpose. Charity Commission? William Shawcross: It is the law, since 2006, that all Q163 Paul Flynn: Can I just ask: would you be charities have to display public benefit. Parliament did embarrassed? You are taking over this job and you are not define exactly what public benefit is, correctly I a person who has had a very privileged background. am sure, and it will be a question of developing new Would you like to be criticised in your future case law, principally with the decisions of the Upper decisions because of your background? Tribunal, as to how public benefit is defined. That will William Shawcross: You are absolutely correct; I occur, over time, with reference to the several have a very privileged background and I am not hundreds of years of case law that already exists. embarrassed about it. It would be foolish of me to Religion has always been seen as a charitable purpose. be so.
Q158 Robert Halfon: So will you ensure there is Q164 Charlie Elphicke: I would just like to go back equal treatment of all religions, including Christian to public benefit, religion and those sorts of issues. Do religions, across the board? you feel that freedom of religious belief, freedom of William Shawcross: Of course. religious expression and freedom to practise a religion should be a cornerstone of our way of life? Q159 Chair: How do you feel the Commission William Shawcross: Yes, of course. conducted itself with regard to the public benefit test and the independent schools sector? Q165 Charlie Elphicke: Given that, would you then William Shawcross: The Commission is in a difficult object and act in the Charity Commission if you felt place because of the Charities Act not properly that public benefit was being used as a weapon to defining what public benefit actually means. It cannot suppress religious belief and freedom of be defined by Parliament to fit every single case and determination? every single charity. In the case of independent William Shawcross: I would have to look and see schools, the Commission produced guidelines that whether the responsibility of the Chair of the were challenged in the Upper Tribunal. The Upper Commission covers that and enables the Commission Tribunal produced a decision that was very important to do that, but I would certainly not wish to see that and the Commission, as a result, revised its guidance. happen. The proposal you are making is a nightmare That is the proper way these things develop and the one and I certainly would not think it appropriate that case law is established. this should happen in this country. I hope that it would not. I hope the situation you have described would not Q160 Paul Flynn: Won’t you be in an embarrassing arise. Certainly, if the Commission is responsible for position as a former pupil of Eton, the most privileged upholding religious freedom, I would make sure that school in the country and which is a charity, which it was strongly active in that way. most people find difficult to understand? William Shawcross: Many hundreds of schools in this Q166 Charlie Elphicke: My constituents who have country are charities. Education, like religion, has religious beliefs and are Christian complain to me always been seen as one of the principal purposes of saying that their view is that the Charity Commission charitable organisations. I do not need to tell you, Mr had been using the public benefit test as a weapon to Flynn, that the principal purposes are religion, suppress religion and that it has been anti-clerical and education and the relief of poverty. I was very lucky overly secularist in its approach. Would you want to to go to Eton. Eton, when I was there and still now, restore the confidence of the constituents who has a much larger charitable sector. It performs complained to me about these things and assure them considerable public benefits. The difficulties will not that the Charity Commission is not anti-religious, as be for schools like Eton but for smaller, much poorer, they feel it has been? independent schools. William Shawcross: Of course. The simple answer is that yes, I would want to restore their faith in the Q161 Paul Flynn: There is one public school that set Commission. I hope what you describe is not the case. out to provide education for the orphans of the Battle Perhaps the teething problems that are attendant on of Waterloo. The aims of some of the public schools such a major and important piece of legislation as the are a bit remote from what is actually happening. Are public benefit test in the Charities Act are being you suggesting that one of the main aims of Eton is worked through with early references to the Upper the relief of poverty among the very rich? Tribunal. I certainly think your constituents deserve cobber Pack: U PL: COE1 [E] Processed: [18-10-2012 10:18] Job: 023064 Unit: PG02 Source: /MILES/PKU/INPUT/023064/023064_o002_th_Corrected PASC 05 09 12.xml
Ev 20 Public Administration Committee: Evidence
5 September 2012 William Shawcross CVO every assurance that the Charity Commission is not William Shawcross: I apologise, Mr Flynn. I do not trying to campaign against Christianity. That would be know about Pastafarianism, I apologise for not a deplorable thing. knowing that. Paul Flynn: I am shocked. Q167 Charlie Elphicke: So the Charity Commission William Shawcross: If I get this job, I will find out under you would uphold freedom of religious about it. It does not sound like a very well expression? substantiated religious belief to me. William Shawcross: Yes. Paul Flynn: It is.
Q168 Charlie Elphicke: And freedom of religious Q173 Charlie Elphicke: Likewise, Druidism, which practice? seems to involve cutting mistletoe on Midsummer’s William Shawcross: Yes. Eve and running around in strange cloaks, has been granted charitable status by the Charity Commission, Q169 Charlie Elphicke: And freedom of belief? as we learnt from Mr Halfon. Do you think that that William Shawcross: Yes. Freedom of belief should be should have charitable status and that it was a well- nothing to do with anyone else. founded decision? William Shawcross: I do not know the nature of the Q170 Charlie Elphicke: But where there is a charity decision. I do not know why it was decided that that is religious and, as part of what it is doing, Druidism had enough public benefit to be a charity. undermines the security of the state, would you also That is something I would look at. This is a really take an interest and act to ensure charitable funds were difficult area but the basic point is that, since not used for activities of a more nefarious or charitable law began, religion has been granted charitable status and I would wish to see that continue. dangerous nature. William Shawcross: Of course. That is a very dangerous situation. Unfortunately it has become Q174 Greg Mulholland: I need to take you back to more of a crisis in recent years, not just in this 1996 and your quite extraordinary comment. You said country. It is absolutely critical that the law in all its in The Independent that “if private companies can forms, regulations and aspects, be used to stop abuses handle aid for the poor better than the charities, they of charities of that sort. It is absolutely unforgiveable should replace them”. Do you think, having espoused that charities should be used to foment violence in the such views, that you can be the Chair of the Charity ways that you are suggesting. Commission? William Shawcross: In the 1990s I wrote a lot about the delivery of charitable assistance, particularly Q171 Charlie Elphicke: So religion, but peaceful overseas. I wrote a book called The Quality of Mercy, religion? which looked at the relief operations in Cambodia in William Shawcross: Yes. particular, as well as other countries, after disasters. It was a book that was extremely favourable to the Q172 Paul Flynn: Can we follow the logic of Mr whole charitable sector and looked at the work of Elphicke’s comments into the absurdity it creates? I organisations like the International Committee of the do not know if you are aware of the controversy about Red Cross and, in this country, Oxfam, War on Want Pastafarianism? Pastafarians believe in a supreme and Save the Children. Oxfam in particular were very being who is a blob of spaghetti in the sky. When helpful to me in my researches. I simply said that, if challenged by people saying that this is absurd, they it is more efficient for aid to be delivered—for say that the idea of a man with a beard in the sky is example to the border of Cambodia where there were also absurd. The previous Charity Commission hundreds of thousands of starving people—by a accepted Pastafarianism because their rules are the commercial company, which probably would have same as those which Mr Elphicke has put out and they been employed by the British Embassy or somewhere do have a belief in a supreme being, which happens else to get aid quickly, then it was the best thing to do. to be a blob of spaghetti in the sky. Do you think we should look again at your definitions of religion? Do Q175 Greg Mulholland: Having looked at some of you think that Pastafarians, who exist and, publish your other previous articles I would just like to books and so on, should be regarded fully as a religion mention a few of them. On 3 May 2012 you wrote an in the same way as Eton is regarded as a charity? article called, “Murdoch has been the bravest media Aren’t you in the field of absurdities? owner in Britain in the last 40 years”. There is another William Shawcross: What, with the greatest respect, article on your website in praise of Rupert Murdoch. is the field of absurdities? On 17 January 2012 you wrote, “The case for Paul Flynn: Pastafarianism. Guantanamo”. Back on 5 March 2010 you wrote, William Shawcross: I am glad to say that I do not “Why Bush and Blair were right about Iraq”. As a know about Pastafarianism. I should say that I am liberal, I am absolutely committed to journalistic sorry to say. freedom. You are a very powerful journalist, you have Paul Flynn: In America, Pastafarians have the same very strong views and I think that is fantastic. tax breaks as other religions. Regardless of the excellent work you have done in the Chair: Mr Flynn, allow him to answer the question. charitable sector—and of that there is no question— Paul Flynn: No, he was asking me a question. because you are such an outspoken journalist with Chair: Mr Shawcross? such strong views that many people would find cobber Pack: U PL: COE1 [O] Processed: [18-10-2012 10:18] Job: 023064 Unit: PG02 Source: /MILES/PKU/INPUT/023064/023064_o002_th_Corrected PASC 05 09 12.xml
Public Administration Committee: Evidence Ev 21
5 September 2012 William Shawcross CVO uncomfortable, even though I would defend entirely William Shawcross: This is only a two-day-a-week your right to have them, do you really think that job and I would have to carry on doing other work, makes you able to lead an organisation that needs and my work is as a writer. I think it would be sensitivity and impartiality? Do you think it is appropriate for me to not do things that are too possible for you to command respect in that position? controversial. Again, I would seek the advice of your William Shawcross: I hope so, otherwise I would not Committee, if you wished, on specific subjects. I have applied for this job. I do have strong views, you would certainly seek the advice of the chief executive. are right. I would wish to continue writing if I were Obviously it would be self-defeating to say things that lucky enough to get this job. If there was anything lead to bringing the Commission to disrepute. controversial that I was asked to write about I would obviously discuss it with the chief executive and Q180 Chair: Would you accept that your role as perhaps with members of the board. I certainly would Chair of the Charity Commission is your prime not want to write publically about this sector if I was responsibility and therefore you have to modulate in this job. If you want to go into detail about any of your other activities in order to respect that position? the things you have just mentioned I have actually got William Shawcross: Of course, absolutely. Let me a copy of my book on Iraq and my book on justice, just tell you what I have in the pipeline now. I have called Justice and the Enemy, which was published just completed correcting the page proofs of a book earlier this year. The subtitle is From the Nuremberg of the Queen Mother’s letters, which is a publication Trials to Khaled Sheikh Mohammed and I am certainly of all the letters she wrote in her 90 years of writing happy to leave those with the Committee if you wish life. That is coming out in October. I am also writing to have them. a question-and-answer book with George Weidenfeld who is, as you know, one of the last great Jewish Q176 Greg Mulholland: That is a good plug for intellectual refugees from Hitler’s Austria in 1938. your book there. Can I ask about your website, This is a book of questions and answers to him, so it “William Shawcross—writer and broadcaster”; would is his opinions, rather than mine. Those are the only you take that down? two books I have in the pipeline at the moment. I William Shawcross: The whole website? would obviously try to find another book to write on the days of the week that I was not committed to the Q177 Greg Mulholland: Yes, would you accept that Charity Commission. You are absolutely right, Mr you have a very different role and you cannot carry Chairman, that that would be my principal on being a writer, broadcaster and journalist espousing responsibility. such controversial views when you are holding a position of that sensitive and impartial nature? Q181 Paul Flynn: Helena Bonham Carter delivered William Shawcross: With great respect, those are two a critique of your book, which was admirably brief. different questions: would I take down the website or She described the biography you did of the Queen would I expunge my past? I would have thought it Mother as “crap”. I think the criticism was based on was slightly odd to do a self censorship like that. In the idea that it was sycophantic and some of the more terms of what I would write about in the future, let interesting facets of the Queen Mother’s personality me say again that I would obviously have to consider were absent from this very long book. what I wrote about and I would not want to write Chair: What is the relevance of this question? about anything that brought the Commission into any Paul Flynn: It is about whether it was an independent disrepute. Obviously that would be completely book or whether— grotesque and I would therefore consult with the chief Chair: We are not here to review Mr Shawcross’s executive about that. books. Paul Flynn: It is establishing his independence, Q178 Greg Mulholland: Just to be clear, I am not Chairman. I am sorry we did not have a asking you to expunge your past. You have written pre-appointment hearing for you. We would not have what you have written and it is entirely your right as chosen you if it was an independent Chairman, I am a journalist to do so, and you are a very well respected afraid. journalist. What I am asking you specifically is Robert Halfon: I would have done. whether you would continue to have your website, Paul Flynn: But you must try to work on it and try “William Shawcross—writer and broadcaster”, and to put your bias to one side when we are dealing with would you continue to be a controversial journalist at a witness. the same time as being Chair of the Charity William Shawcross: I think Helena Bonham Carter is Commission? Do you think that is tenable? a great actress. William Shawcross: I am very happy to change the nature of the website. I think it would be wrong to Q182 Paul Flynn: She does not think you are a great take it down and pretend I have not written what I writer, I am afraid. have written. William Shawcross: I am sorry about that; it is my loss. Q179 Greg Mulholland: I am not talking about the past; it is an ongoing thing. Would you carry on doing Q183 Paul Flynn: Indeed. What of the book? The that and presenting yourself as William Shawcross, book was done as a flattering portrait of the Queen the writer and broadcaster? Mother. She was an interesting lady with an cobber Pack: U PL: COE1 [E] Processed: [18-10-2012 10:18] Job: 023064 Unit: PG02 Source: /MILES/PKU/INPUT/023064/023064_o002_th_Corrected PASC 05 09 12.xml
Ev 22 Public Administration Committee: Evidence
5 September 2012 William Shawcross CVO interesting personality, which was sadly absent from reasonably well as I would not be here otherwise. I the book. enjoyed the process; I thought it was very good. William Shawcross: This was the official biography— Paul Flynn: Yes indeed, so you had to write what Q187 David Heyes: I am sorry to labour this theme would please the family. again but I do have some concerns. I have seen William Shawcross: That is not the case. The family enough today to convince me that you are perfectly imposed no censorship whatsoever upon me. well aware of what a difficult task you are going to have in this job of shaking off this image that you Q184 Paul Flynn: The union of biographers would bring a bias to it. It was certainly the case with Suzi take a different view. Leather that she struggled with that throughout her William Shawcross: That is your opinion, Mr Flynn. term of office and she was little more than a dormant member of the Labour Party, and, to the best of my Q185 Priti Patel: Mr Shawcross, you are very well knowledge, she never voiced any controversial known and very accomplished. You have a political views to any extent. That is not the case with tremendous background and the Committee has you. You are on public record with your views on the explored that already today. In the light of that and big political issues of the day. Not too long ago you the fact the job is a two-day-a-week position, although were recording your support for the actions of Bush it may take more time, can I ask you what excites and Blair in the Iraq war, which is perhaps one of the you about the role of becoming Chair of the Charity most controversial political issues of the day. You Commission and what motivated you to apply for have partly answered the main question but I would the position? like to hear more. What actions are you going to take William Shawcross: That is a very good question. I from tomorrow, from your first day in the job, to rid have been involved in writing about the issues that yourself of this incumbrance? It will not just be face the charitable world and the way in which damaging to you personally but, potentially, extremely charities work all over the world, not just in Britain, damaging to the Charity Commission. for many years. They are issues that have always William Shawcross: If I thought I was damaging to interested me. I wrote a book called The Quality of the Charity Commission I would not wish to have this Mercy and a book called Deliver Us From Evil more job and, if you feel that, you will not approve me. I recently, about how the world deals with disasters. I hope that it is not the case. I would just like to say have always felt that, being a writer is a wonderful something about Iraq. It is clear that the aftermath of privilege but that I would like to try and get involved the overthrow of Saddam was catastrophic. My Iraqi somehow in public service. When I read that Dame friends, some of whom were in exile under Saddam Suzi was standing down after six years I thought that Hussein and then went back, all still say that, despite this would be an interesting job to apply for and try everything that has happened, they now have the to bring the benefit of my own experience as a writer chance to build a decent society in Iraq, which never around the world to this job so I decided to apply for existed under Saddam Hussein. In particular, one it. Some people said, “You are mad; it is a poisoned woman who lived in exile in London for 20 years chalice,” and others said, “It would be a very went back in 2003, immediately after the invasion, interesting challenge and you could add benefit to it”; and then became a member of various political I hope that is the case. It is obviously a difficult thing movements. She was Deputy Minister of Culture and because of the questions you have raised. I do have created women’s organisations in Iraq that flourish views that not everybody agrees with and I accept that still today. I think she is a very important witness and that is a problem. I would hope, if you do see fit to she says that, despite the horrors of the Sunni-Shi’a approve me, that I would be able to convince this blood letting since 2003, despite the fact the United Committee and the wider public that I am there to act States did not exercise effective control over that, they entirely properly in the interests of the Commission are now building something better, and she is grateful and the charitable sector. about it. She is someone whose views I take extremely seriously. If she ever said to me that it was a disaster Q186 Priti Patel: We have touched on the issue of then I would take that very seriously too but she has independence. For the benefit of the Committee, can not, and nor have other Iraqi friends. Of course there you give us your insight on how you found the were terrible mistakes made after the invasion. process, having applied? Presumably the question of independence came up. What was your experience of Q188 David Heyes: The question was: what actions that and how did you find the actual process? will you be taking from tomorrow to rid yourself of William Shawcross: The process was, in a way, this? Your response to my question was to defend your wonderfully simple because it was a question of filling controversial position. Is that what you will do in in the long form published by the Cabinet Office in as this job? much detail as I could, and then, when I got through William Shawcross: I am certainly not going to resile that stage, there was an interview by an independent from positions that I have taken. It would be board. Following that stage there was a final interview ridiculous for me to say that everything I have said with the Minister. So it was a remarkably streamlined over the last 40 years is wrong. I could not possibly process, if you like, and a simple process, which do that, nor would you expect that. I would just try to reflected very well on the way these things are done work to be seen to be the independent Chair of this in the public sector. I was very pleased by that. The very important regulator. I think the proof will have interviews were quite tough but I suppose I did to be in the pudding, and I hope that I would be able cobber Pack: U PL: COE1 [O] Processed: [18-10-2012 10:18] Job: 023064 Unit: PG02 Source: /MILES/PKU/INPUT/023064/023064_o002_th_Corrected PASC 05 09 12.xml
Public Administration Committee: Evidence Ev 23
5 September 2012 William Shawcross CVO to do that. Obviously, if you do approve me and you done it very well in most instances. If there have been felt at any stage that I was damaging the Commission mistakes and some of its guidance has been criticised, then you would have to haul me back before you and for example, by the Upper Tribunal, this is a process tell me so in no uncertain words. that is inevitable after a major piece of legislation like the 2006 Act. I would want to try to help the Q189 Paul Flynn: Those of us who were in Commission overcome these teething troubles Parliament in 2003, when your position was the following that legislation. I would want to be seen by majority position, now know that a lot of MPs were everybody—those on the left as well as the right—as bribed, bullied and bamboozled into supporting the an impartial, proper regulator. I would hope that if war in Iraq. there was any hint that I was not doing that you would Chair: I am sorry; I do not think this is relevant. call me here as soon as warranted. Paul Flynn: Do you really think now, in 2010, that it was worth the sacrifice of 179 British lives in pursuit Q192 Charlie Elphicke: Can I just ask you about of weapons of mass destruction and to replace one chugging? An Ipsos MORI poll showed that 67% of rotten regime with what was likely to develop into people feel uncomfortable with the way charities raise another rotten regime in the future. Was it worth 179 funds. You can barely walk in any shopping centre British lives? these days without being pestered senseless by people Chair: I think Mr Shawcross has made his views clear asking you to fill in so-called surveys and all the rest on this matter and I see no further relevance. of it. Chugging has caused substantial loss of Paul Flynn: Can I ask a final question? confidence in charities and harms the public reputation Chair: Briefly, because we are running out of time. of charities. Your predecessor, Dame Suzi Leather, said that it was all fine, it would self-regulate and did Q190 Paul Flynn: Yes, it is a very brief question. not need any action when I pressed her on whether Do I sense, in the course of this morning, that your the part of the 2006 Act that could regulate this should enthusiasm for this job is waning and you might think be brought in. Will you look at chugging and will you that the advantages you would bring to the consider bringing in regulation, for which powers independent Charity Commission might not be as exist under the 2006 Act? substantial as the loss that the world of biography William Shawcross: I think it certainly should be would suffer by you taking this job? looked at because it causes such concern, as you say, William Shawcross: No, that is not the case, Mr and damages charities. I am not sure whether it is the Flynn. job of the Commission itself to insist on what is or is Paul Flynn: Oh dear. not allowed in shopping centres. As Lord Hodgson pointed out, it is the task of the trustees of those Q191 Robert Halfon: Can I just ask: what would particular charities to regulate themselves. If one you like to achieve by the time you have left, if you particular charity is causing gross public disturbance, do become the Chairman? What are the key things it is the trustees’ responsibility above all. If they do you would like to achieve? not regulate it then the Charity Commission may wish William Shawcross: I would like, first of all, to dispel to step in but, again, I would have to look at that these concerns, but that is a personal achievement. I carefully. would like to help the Commission maintain its reputation for excellence and impartiality as the vital Q193 Charlie Elphicke: Lord Hodgson said in his regulator of this sector. Charities face a lot of report that the Charity Commission “need to address problems, which we have talked about already, the confused self-regulatory landscape”. You have a because of the economic hardship that the country and key role in leading this and sorting it all out. Will you many people find themselves in. The task of the do that? regulator is probably more important than ever, and I William Shawcross: Yes. would wish to make sure, regarding some of the Chair: That concludes our questioning. Mr concerns that you have expressed about the regulator Shawcross, thank you very much indeed for coming being seen to be anti-Christian, if that is a perception, today. We will now adjourn to a private session to I would hope to try to dispel that perception and any reach a conclusion. other misperceptions that there are about the work of William Shawcross: Thank you very much, Mr the Commission. It is a very difficult job that the Chairman. Commission has and, from what I have seen, it has cobber Pack: U PL: COE1 [SE] Processed: [18-10-2012 10:18] Job: 023064 Unit: PG03 Source: /MILES/PKU/INPUT/023064/023064_w001_Odeth_Charity Commission further written evidence 19 Jul 12.xml
Ev 24 Public Administration Committee: Evidence
Written evidence
Supplementary written evidence submitted by Dame Suzi Leather, Chair of the Charity Commission Thank you for inviting me to appear before the Committee on 3 July and for your kind words to me at the end of the session. I would like to thank you in particular for your generous tribute to our staff, which I assure you was greatly appreciated. As promised, I am writing with further information about various matters discussed during the session.
Centre for Social Justice The Centre for Social Justice initially applied to us to register as a charity in 2006. We considered this application and gave advice but the application was not pursued. The organisation made a second application for registration which we received in November 2011. We are currently considering this. No decision has been made to date and the application has not been rejected. The applicants recently notified us that the CSJ has experienced a number of changes at senior management and board level. Consequently, the trustees wish to place the application on hold until the new board is briefed on the current position. We have agreed to this and await further contact from them.
Largest Charity Investigated In 2011–12, the charity with the largest income that we investigated was Leonard Cheshire Disability, which had an annual income at the time of £155 million.
Costs and Justification of Public Benefit Hearings I particularly welcome an opportunity to provide further information on the Commission’s involvement in litigation on public benefit in the Tribunal and its costs. As you know, the Independent Schools Council brought judicial review proceedings against the Commission in respect of our public benefit guidance as it affects charitable independent schools. Subsequent to that, the Attorney General issued a reference in the Tribunal to determine the law and deal with certain hypothetical questions on the issue of public benefit in relation to the same matter. As the two sets of proceedings overlapped to a considerable extent, there was a hearing in the High Court to determine how they should be progressed. It was agreed that there was a serious and important issue of law to be clarified in these proceedings and it was decided that the judicial review case should be transferred to the Upper Tribunal to be heard at the same time as the reference. No costs order was made at that hearing and it was agreed, insofar as the judicial review was concerned, that both parties should bear their own costs in the Upper Tribunal. On the question of the Attorney General’s reference, it is the rule that, save in the most exceptional circumstances, each party in any event will bear its own costs. So, for clarity, the Commission did not pay any other parties’ costs in the litigation. As I stated in my oral evidence, the legal costs on our side were £185,000. On the more general question of the Commission’s involvement in the litigation, as you know we were under a statutory duty to publish, after consultation, public benefit guidance. That is what Parliament decided under the Charities Act 2006, with the full knowledge that the law was complex and that there would be a lack of clarity about how the law was affected by the legislation. This was particularly the case with the removal of the presumption of public benefit from certain classes of charity, including educational charities. Parliament had anticipated that at some point the law would need to be clarified in the Tribunal. In these circumstances, given the challenge by the ISC and in particular by the Attorney General’s reference, the Commission was under a dUty to assist the Tribunal in the clarification of the law by its participation in the legal proceedings. As the Committee will know, although the guidance was held to be wrong with regard to its regulatory emphasis, fundamental aspects of charity law put forward by the Commission and which the Commission had relied upon, namely that a charity cannot be constituted or operate in a way which excludes the poor, were upheld. In our view, the Commission carried through an important element in public service in assisting the Tribunal to clarify the law and that is our justification for our engagement. In respect of our internal administrative costs, it is not possible to give a single figure to reflect the various staff activities connected with the hearings. We require our staff who carry out preparation and support work for the Tribunal appeal hearings to work flexibly and, when not working on appeal cases, they have other legal advisory and case duties. This flexible approach, together with the fact we do not operate a charging system for our legal services, means we do not maintain a time recording system. cobber Pack: U PL: COE1 [O] Processed: [18-10-2012 10:18] Job: 023064 Unit: PG03 Source: /MILES/PKU/INPUT/023064/023064_w001_Odeth_Charity Commission further written evidence 19 Jul 12.xml
Public Administration Committee: Evidence Ev 25
Charitable Incorporated Organisations Correspondence between us and the Cabinet Office on the implementation of the Charitable Incorporated Organisation (Cia) is appended to this letter (not printed). I hope this information is useful. It only remains for me to thank the Committee for its work in scrutinising the work of the Commission and helping us focus on our role during my tenure as Chair. It has been a pleasure working with you. July 2012
Printed in the United Kingdom by The Stationery Office Limited 10/2012 023064 19585