Government accepts Law Commission recommendations for reform to charity law

The Government has accepted the majority of the Law Commission’s recommendations for reform to charity law, made in the 2017 Technical Issues in Charity Law report.

The reforms will save charities a large amount of time, as well as save costs. For example, the Law Commission estimated cost savings of £2.8m per year from the increased flexibility concerning sales of land.

The Government has accepted 36 of the 43 recommendations (one in part) made in the report and has asked the Law Commission to assist with updating the draft Bill that the Law Commission produced alongside the report. This Bill, if enacted, would amend the Charities Act 2011. The Government will introduce the Bill when Parliamentary time allows.

Law Commissioner, Professor Nick Hopkins said:

“Our recommendations for reform in our report on technical issues in charity law will remove unnecessary bureaucracy for charities, ensuring they use their time and money in the best way to support their good causes, while still providing necessary oversight to ensure public confidence.”

“I am delighted that Government has accepted the majority of our recommendations, and that they plan to implement them when they can.”

Aim of the recommendations

The recommendations aim to:

  1. Remove unnecessary regulation and bureaucracy to maximise the efficient use of charitable funds. The aim is to prevent the disproportionate diversion of charitable assets and trustee time on compliance with regulation from which little or no benefit is derived, whilst providing effective oversight.
  2. Increase the flexibility of trustees to make decisions in the best interests of their charities, in particular to give trustees wider or additional powers to make decisions without having to obtain authorisation where appropriate.
  3. Confer wider or additional powers on the Charity Commission to increase its effectiveness. This includes enabling the Commission to carry out its current functions more efficiently and to take action where it ought to be able to but cannot currently (for example, to regulate or assist charities).
  4. Ensure adequate protection of charity property to enhance donor confidence and public trust, in particular supporting confidence in the use of donations currently and in the future.
  5. Remove inconsistencies and complexities in the law, making it clearer for charity trustees, staff, volunteers and professional advisers seeking to apply it and comply with it, as well as reducing legal and other professional costs. This includes seeking to minimise the potential for unintentional mistakes and the associated costs of addressing them.

Further details of the recommendations can be found here.

The Government’s response to the recommendations is available here.