Charity regulation review: consultation analysis

Chapter 4: Conclusions

Many individuals and organisations participated in the consultation, sharing their time, views and expertise on what any forthcoming review of charity regulation should cover, including additional considerations for technical workstreams. This report provides a high-level summary of the consultation responses. For more detail, readers are encouraged to read individual responses where permission was given for publication^[5].

There was a broad consensus that a review of charity regulation would be timely and should occur. Respondents highlighted that a review should consider charity governance, financial aspects such as audit levels, and how to strengthen regulation or reduce complexity. Many respondents, however, suggested now was not the right time for a review due to the challenges currently facing Scotland’s third sector, potential issues with conducting a review or expressing a preference for the status quo.

A majority felt any review should focus on assessing the effectiveness of current charity regulation in meeting the sector’s future needs. Some support was evident for reviewing the 2005 Act, and in open comments, some respondents called for both options to be included. Most felt they or their organisation would have the capacity to contribute to a review, though concerns were expressed that some organisations, particularly smaller organisations, may have less capacity to respond.

Suggestions for topics to include in a review were wide-ranging, with many respondents calling for the review to be comprehensive and not exclude anything. A majority of respondents agreed that charitable purposes, public benefit and charity trustee duties should be included in a review, with most support given to reviewing trustee duties. Other suggestions included charity governance, trustee roles and responsibilities, consideration of trustee recruitment and diversity, charity finances, OSCR’s role and powers, becoming a charity, and changes in organisational structure. Many respondents also felt there should be a focus on reducing current demands on charities and simplifying regulations to relieve administrative burdens, while some respondents felt staff terms and conditions, safeguarding, or staff accountability structures should be included. Suggested exclusions included recent regulatory changes, which had already been the subject of consultation and required time to be implemented. Mixed views were expressed on whether the charity test should be included.

When considering three suggested technical workstreams, most support was evident for reviewing the audit threshold, with a prevailing view that the current threshold is set too low. On the other workstreams, NHS Endowment Funds were considered important to review within the reorganisation of statutory and Royal charter charities workstream, while there was agreement that incorporating to a SCIO could be complex, particularly for small groups or particular organisations such as CICs, Trusts or Friendly Societies.

Other considerations and suggestions for how the Scottish Government should proceed with any review included ensuring that it is based on objective criteria, that there is consultation with the sector, that it is completed within the current Parliamentary term, and that recommendations are taken forward.