Changes afoot in Charity Law

  • July 01, 2015
  • By Hunters Law

The Charities (Protection and Social Investment) Bill (‘the Bill’) received its first reading in the House of Lords on 28th May 2015.  Its provisions confer greater powers on the Charity Commission.

At present, s.178 Charities Act 2011 sets out the situations in which charity trustees will be automatically disqualified.  Under s.10 of the Bill, the Charity Commission would have additional powers to disqualify someone from acting as a trustee of a charity.  A new s.181A Charities Act 2011 provides that the Charity Commission will be able to make a disqualification order against a person (effective for not more than 15 years) if:

  • they are unfit to be a trustee;
  • the order is desirable in the public interest; and
  • at least one of the six conditions set out in the Bill applies.

The Charity Commission has published a policy paper with its initial thoughts on the use it plans to make of the proposed disqualification power and intends to produce final guidance following a public consultation.

Also included in the Bill are powers for the Charity Commission to issue formal warnings to charities that breach charity law and powers for charities to make social investments.  The latter are described as ‘acts carried out with a view both to directly furthering the charity’s purposes and achieving a financial return for the charity’.  Safeguards to ensure that the social investment is in the interests of the charity have been included in the Bill.

For more information, please contact a partner in the Charity Law or Private Client team.

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