The Charities (Regulation and Administration) Bill was unanimously passed by MSPs in June, and will affect all of our member churches and member charities in Scotland. In this briefing we explain how this may impact you.
In Scotland, the Office of the Scottish Charity Regulator (OSCR) registers and regulates over 24,000 charities for the Scottish Government. Charities must be registered on its Scottish Charity Register, which includes us at the Evangelical Alliance. Since its establishment in 2005, charity law hasn’t been substantively updated and the purpose of the Charities Bill was to give OSCR more powers in its regulatory role and update the requirements of charities on the information they must publicly provide about their administration. This in turn brings Scotland largely into line with charity law in England, Wales and Northern Ireland.
At the Evangelical Alliance we advocated on behalf of our members in the parliamentary process of the bill, taking part in an engagement session at stage one, held by the Social Justice & Social Security Committee in the Scottish Parliament, who were scrutinising the bill. Broadly, we were supportive of the bill, and wanted to ensure that as a result of any changes to charity law that in particular smaller charities (such as small independent churches) with less resources weren’t overly burdened with administrative requirements.
What the bill changes about charity law can be summarised in seven parts:
1. Appointment of interim trustees by OSCR
The bill gives OSCR the powers to appoint interim trustees to charities in Scotland on their request, should a charity have an insufficient number of trustees to fulfil its regulatory requirements.
2. Amendments to the rules on who can be a charity trustee or a senior office-holder in a charity
The bill extends the list of offenses for which an individual would be disqualified from being a trustee or in a position of senior management in a charity, including bribery, acts of terrorism, money laundering and perjury.
3. Trustee names to be publicly accessible on the Scottish Charity Register
One of the most significant changes the bill makes is that it will now be a requirement for charity trustee names to be publicly available on the Scottish Charity Register, in order to improve transparency and accountability. Therefore, the names of trustees will appear on each charity’s register on OSCR’s website. This is already the case for charities registered in England and Wales with the Charity Commission.
4. Record of charities that have merged
For the purposes of legal issues regarding legacies, the bill will also change how the merging of charities is recorded publicly by OSCR. Previously, if legacies were provided to charities that ended up winding up with a new successor charity in its place, often a shadow charity was established to pass on legacies to its successor. The bill changes this process to allow legacies to be passed on to a charity merger directly.
5. Charities can be removed if they fail to meet requirements
The bill provides OSCR with the powers to remove charities from the Scottish Charity Register should they fail to submit their accounts and fail to engage with OSCR about this. Charity accounts must continue to be published on the register.
6. Ability to issue positive directions
The bill allows OSCR to issue positive directions to charities following inquiries into their conduct. Designated religious charities will continue to be exempt from this. The bill also outlines the circumstances under which OSCR and designated religious charities would share information with each other.
Charities must fulfil specific criteria to become a designated religious charity in Scotland, and examples of Christian churches that are designated religious charities include the Church of Scotland and the Free Church of Scotland.
7. Charities’ connection with Scotland
OSCR will be able to remove charities from the Scottish Charity Register should they no longer have any connection to Scotland.
A final issue which was debated through the parliamentary process of this bill was the issue of religious charities’ requirements to comply with the Register of Persons Holding a Controlled Interest in Land. We were disappointed that the Scottish Government did not support Jeremy Balfour’s amendment, which had the cross-party support of the Conservatives, Labour and Liberal Democrats, which would have made the process for religious charities more proportionate to their size and resources to be able to comply.
Overall, we welcome the potential for the Charities (Regulation and Administration) Bill to be an effective update to charity law in Scotland.
