Clause 41
Charities Bill [Lords]
5:30 pm
Andrew Turner (Shadow Minister (Charities), Home Affairs; Isle of Wight, Conservative)
Amendments Nos. 41, 42 and 43, taken together, would mean that the period required for a charity to change its rules was the period set out in the Bill or the period set out in the rules of the charity, whichever was the greater. That is for the avoidance of doubt. Amendment No 126 to clause 42 specifies that that action cannot be backdated. We will shortly find out whether that is part of general charity law.
Amendment No. 125 to clause 42 is another of those for which I am indebted to the Charity Law Association, which tells me that it assumes that the intention behind clause 42 is to allow unincorporated charities to change anything in their governing documents other than those things that would affect the way in which the charity deals with its property. I am told that that more or less mirrors the power of amendment enjoyed by charitable companies.
The association welcomes that aim, but does not consider that the current wording offers such a broad power. It has been suggested that the wording allows charities to change pretty much anything, because the word “trusts” is as defined in the Charities Act 1993. Section 97 of that Act states that
“trusts” in relation to a charity, means the provisions establishing it as a charity and regulating its purposes and administration, whether those provisions take effect by way of trust or not”.
It goes on to say that the definition is broad enough to cover all aspects of a charity’s governing document, but that proposed new section 74D does not apply to all a charity’s trusts.
Subsection 2(a) and (b) of the proposed section 74D restrict the application of the section in such a way that it will not apply to administrative provisions that are not connected either to powers exercisable by the charity’s trustees or procedures to be followed. For example, it will not allow trustees to change provisions on the minimum number of trustees. Arguably, it would not allow them to change provisions about the quorum for trustee meetings, as it is unclear whether that falls within the term “procedure”. The provision would add a new subsection (3), applying to all provisions relating to the execution of the trusts. This is sufficient to widen the power to cover areas missed by the existing wording without enabling trustees to make changes to the way the charity can use its property.