This Bill will increase transparency and accountability in Scottish charities and enhance regulatory powers for the Scottish Charity Regulator (OSCR). The Scottish Government has been actively working on a review of Scottish charity law since January 2019. The review has focused on practical proposals put forward by OSCR. The Bill does not seek to revisit the fundamental principles of charity law, but to update and strengthen existing charity regulation.
The proposals identified by OSCR broadly focus on increasing transparency and accountability to maintain public trust and confidence in charities and improving OSCR’s powers to deal with misconduct, bridging some of the gaps between Scots charity law and charity law in the rest of the UK, which is regulated by the Charity Commission for England and Wales and the Charity Commission for Northern Ireland. Consultations in 2019 and 2021 showed strong support for all 10 proposals put forward by OSCR and identified further areas of improvement which resulted in the additional two proposals being developed. Stakeholders are keen to see changes brought forward given it has been 17 years since the 2005 Act was passed.
Stakeholder expectations of primary legislation have been raised by four PfG commitments and many already see the legislative changes as taking too long, viewing the changes as straightforward and technical.
In September 2021, the Scottish Government announced its commitment to improve charity law in Scotland as part of its Programme for Government 2021-22:
- ‘We will bring forward legislation to improve Charity Law, strengthening the legal and regulatory framework and enhancing public trust in this vital sector.’
Charities and their operations cover the full range of national outcomes, ensuring the regulatory framework underpinning charities is fair and proportionate can strengthen the sectors contribution to those outcomes. The legislation will contribute specifically to the delivery of the following Scottish Government’s National Outcomes:
- We tackle poverty by sharing opportunities, wealth and power more equally
- We are creative and our vibrant and diverse cultures are expressed and enjoyed widely
Who will it affect?
As the Charities (Regulation and Administration) (Scotland) Bill (the Bill) is a technical one aiming to increase the transparency and accountability in Scottish charities and increase regulatory powers for OSCR, the scope of those directly affected is potentially quite narrow.
The bulk of the proposals addressed in the Bill will have a direct impact on OSCR staff, charity trustees and charity and volunteer organisations. There may be indirect effects on the beneficiaries of charities.
Equality legislation covers the protected characteristics of age, disability, gender reassignment, gender including pregnancy and maternity, race, religion and belief, and sexual orientation. There are some aspects of this Bill that may impact on individuals who fall within these categories. These are mitigated, in some part, by data protection legislation and the option to apply for a waiver or dispensation under particular circumstances. Provision to withhold principal address details and charity trustee/contact details where the inclusion of that information is "likely to jeopardise the safety or security of any person or premises" is already contained in section 3(4) of the Charities and Trustee Investment (Scotland) Act 2005 and would continue to remain in effect.
Groups potentially affected by the proposals are set out below. The Policy Memorandum for the Bill provides details of each proposal.
A requirement on OSCR to publish the statements of account for all charities in the Scottish Charity Register
Requirements on OSCR to include charity trustee names in the Scottish Charity Register, to keep an internal schedule of charity trustees’ details and to create a publicly searchable record of removed charity trustees
Sensitivities may be present for some trustees should their details become public, therefore a dispensation system, similar to that already employed by OSCR which allows for individuals to apply for dispensation from having to include certain information in the Scottish Charity Register will be introduced. It has been highlighted by the Church of Scotland, in their response to the 2019 consultation, and reiterated in 2021, that particularly with regard to religious charities any publication of names of trustees would allow the public to infer an individual’s religion or belief and could therefore put them at risk of discrimination. This could also be true of certain charities where in order to be a trustee a person must have lived experience of certain criteria (i.e., addiction recovery, domestic abuse, disability).
Updating the criteria for the automatic disqualification of charity trustees and extending it to individuals with senior management positions in charities
This proposal will extend the criteria that trigger automatic disqualification in Scotland to broadly match the rest of the UK, ensuring there is consistent criteria for the automatic disqualification of trustees across the UK by closing legislative gaps that currently exist in the Scottish legal framework. The second part of this proposal will extend the disqualification criteria to cover those in specific senior management positions within charities, as is currently the case in England and Wales.
We have considered that there is potential for marginalised communities and individuals to be impacted more greatly by this proposal. The inclusion of this change to legislation would mean that an individual who is, for example, an undischarged bankrupt would be disqualified from holding a senior management position within a charity.
There may be a disproportionate impact on men as, although the third sector does have a higher number of women involved in general, there is an imbalance at senior management level with more men holding these positions than women.
What might prevent the desired outcomes being achieved?
Significant amendments to the Bill or the Bill being voted down would prevent the desired outcomes being achieved.
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