Queen's Speech 2021 - Charities

Charities Bill

“Legislation will support the voluntary sector by reducing unnecessary bureaucracy...”

The purpose of the Bill is to:

● Address a range of issues in charity law which hamper charities’ day to day activities, by implementing the majority of the recommendations in the Law Commission’s 2017 report ‘Technical Issues in Charity Law’.

The main benefits of the Bill would be:

• ● Removing inappropriate burdens while safeguarding the public interest in ensuring that charities are properly run. Charities currently face unnecessary administrative and financial burdens because of inefficient and unduly complex law.

• ● Helping charities consolidate and restructure by simplifying a number of relevant processes, reducing costs and saving time for charities.

• ● Making charity regulation more effective and make the legal framework easier to navigate. This will enable charities to use their money and resources more effectively to promote their charitable causes.

• ● Providing a rebalancing of regulation – enabling trustees to run charities effectively, whilst ensuring that there is proper oversight and ensuring that the law works better for the entire sector.

  The main elements of the Bill are:

• ● Changing the law to help charities amend their governing documents more easily with Charity Commission oversight where appropriate.

• ● Giving charities more flexibility to obtain tailored advice when they sell land, and removing unnecessary administrative burdens.

• ● Increasing flexibility for charities to use their permanent endowment (assets or investments where the capital value must be preserved), with checks in place to ensure its protection in the long term.

• ● Removing legal barriers to charities merging, when a merger is in their best interests.

• ● Giving trustees advance assurance that litigation costs in the Charity Tribunal can 121

be paid from the charity’s funds.

Territorial extent and application

● The Bill’s provisions will extend and apply to England and Wales.

Key facts

• ● Currently charities can find it burdensome to change governing documents, sell land, make better use of permanent endowment funds, and to merge with other charities. This Bill will make the above easier and will save charities time and money.

• ● There are approximately 169,000 charities in England and Wales registered with the Charity Commission.

• ● The sector employs almost 3 per cent of the total UK workforce. There are also more than 951,000 trustees of registered charities, supported by over 3.5 million volunteers.

• ● The Technical Issues in Charity Law report was published on 14 September 2017.

• ● The Law Commission’s work on charity law developed from its Eleventh Programme of Law Reform.

• ● The report follows the Law Commission’s 2014 Social Investment by Charities report, the recommendations from which were implemented in the Charities (Protection and Social Investment) Act 2016.