The Charities (Regulation and Administration) (Scotland) Bill is designed to provide a series of practical improvements to problems which have arisen since the coming into force of the Charities and Trustee Investment (Scotland) Act 2005.
Key changes are:
Information held by OSCR
A criticism often been levelled at Scottish charity legislation is the paucity of publicly available information on the OSCR website. The Bill proposes to remedy this by requiring OSCR to make publicly available:
a) Statements of accounts for all charities together with independent examiner/auditor’s reports
b) Charity trustee names– unless OSCR decides that to do so “would jeopardise their safety and security”
c) Details of charity trustees who have been removed through disqualification
d) Details of charity mergers with provisions to facilitate legacies being paid to the merged charity even if that was not covered in the will or other document providing for the legacy
In addition to matters publicly available on the register, OSCR will also keep a schedule of charity trustees containing such other details as it considers appropriate and whilst these may not be available on public registers, an issue may arise as to the extent to which they will be subject to disclosure under FOI legislation.
FOI issues may also arise where OSCR withholds the names of charity trustees.
Further specific criteria for automatic trustee disqualification
The bill proposes a number of additional specific factors that could give rise to disqualification including convictions for money laundering, bribery, terrorism and perjury and other matters that could give rise to disqualification elsewhere in the UK. In addition, disqualification as a charitable trustee will disqualify from holding a senior management position (likely in practice to be either as CEO or head of finance) in a charity.
Increased Regulatory Powers
Additional regulatory powers given to OSCR include rights to:
a) Appoint interim trustees
b) Conduct inquiries into former charities and their trustees
c) Remove charities that fail to submit accounts following requests to do so
d) Issue positive directions to a charity following statutory inquiries (e.g. directing the appointment of additional trustees; the holding of a general meeting; or that the charity act to remove a trustee
e) Refuse to register a charity if it has no connection to Scotland
Conclusion
Whilst the proposed legislation does not and is not intended to signal a revolution in Scottish charity law it provides some useful practical improvements – particularly for smaller charities. From what has been produced to date it is unlikely to have a significant impact on the RSL sector although discussion will need to take place on whether and to what extent the OSCR/SHR Memorandum of Understanding may need to be updated.
Finally, it should also be noted that Scottish Government has made a commitment to have a wider review of charity law, looking into matters such as the definitions of charitable purpose and public benefit; trustee remuneration; and SCIO’s although it is unclear when that will take place.
