Subordinate Legislation Committee, 07 Jun 2005

Meeting date: Tuesday, June 7, 2005

Official Report 123KB pdf

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Delegated Powers Scrutiny

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Charities and Trustee Investment (Scotland) Bill: Stage 2

Agenda item 2 is delegated powers scrutiny of the Charities and Trustee Investment (Scotland) Bill, as amended at stage 2. As members will know, the stage 3 debate takes place this Thursday and we need to report to Parliament in advance of that. I will go through the various sections on which we commented previously. We have received feedback from the Executive on the amendments that have been made.

Section 2 is on the Office of the Scottish Charity Regulator's annual reports. Section 2(4) would have obliged OSCR to comply with any directions of the Scottish ministers about the form, content and means of publication of the general report that the office will have to prepare annually under section 2. That ministerial power has now been removed, on the recommendation of the lead committee, which did not feel that it was necessary. There is not much more to say about the matter, so we will simply note the amendment.

Section 6 is entitled "Applications: further procedure". At stage 1, the committee sought clarification on the drafting of the section, as provisions appeared to overlap. The Executive accepted that the section might require adjustment and undertook to introduce an appropriate amendment at stage 2. Accordingly, the Executive has removed the references to sections 4 and 54(2) from section 6(2), as the committee recommended. Section 6(1) has also been amended to include references to sections 56(1) and 58(1), which will allow ministers to make regulations in relation to applications from charitable companies or registered friendly societies to convert to a Scottish charitable incorporated organisation, or in relation to applications from SCIOs to amalgamate. Are members happy to report to Parliament that the amendments address our concerns?

Members indicated agreement.

Section 7, which is on the charity test, sets out the criteria that a body will have to meet to be treated as a charity. Section 7(3) has been amended to refer specifically to the Scottish ministers or a minister of the Crown and section 7(4) has been removed. At stage 1, the Executive informed the committee that it intended to adjust the bill in relation to the non-departmental public bodies that relate to the five national collections, which is an issue about which we were concerned. Therefore, new section 7(4A), has been inserted; it contains a new order-making power that will allow ministers to disapply either or both of paragraphs (a) and (b) of section 7(3) in relation to any body or type of body. The exercise of the power will be subject to the affirmative procedure. During stage 2, the Communities Committee welcomed the amendment as meeting concerns that it had raised. Are members content with the amendment?

Members indicated agreement.

Section 9 will oblige OSCR to issue guidance on how it determines whether a body meets the charity test. Originally, the bill would have obliged OSCR to consult

"such persons as it thinks fit",

but an amendment has been made that will oblige OSCR specifically to consult representatives of the charitable sector, as well as other persons. Are members content with the amendment?

Members indicated agreement.

Section 15 will confer power on ministers to make regulations that require charities to include certain information on documents that they issue or sign. The regulations may also set out the information that is to be included on such documents. The regulation-making power was refined at stage 2 to include a power to exempt charities, or particular types of charities, from any of the requirements of the regulations. The Executive has explained that the change is needed to allow a period of grace for charities to use up stationery that does not comply with the regulations. Orders that are made under section 15 will be subject to the negative procedure. Are members content with the amendment?

Members indicated agreement.

Section 19 makes provision in relation to the property of charities that are removed from the register. Originally, the order-making power in section 19(8) would have applied only to assets that ministers considered to be of national importance, but the power has been amended so that it will now apply to any property that is specified in the order. In recognition of the width of the power, orders that are made under it will be subject to the affirmative procedure. Are members content with the power as amended?

Members indicated agreement.

Section 63 will confer on ministers the power to make detailed provision about applications for the constitution of the bodies that are to be known as Scottish charitable incorporated organisations and other related matters. The power, which will be subject to the negative procedure except in the case of regulations that are made under section 63(d), has been extended—by the inclusion of section 63(da)—to allow ministers to make provision by regulation for the maintenance of registers of information about SCIOs. Are members content with the amendment?

Members indicated agreement.

Section 82 relates to regulations about fundraising. The committee raised concerns about section 82(2), in particular the powers in sections 82(2)(h) and 82(3), which the committee considered should be subject to the affirmative rather than the negative procedure. The committee also raised concerns about the power in section 82(5) to create offences. The committee's general view was that the sanctions for breaches of subordinate legislation should, as far as possible, be set out in the primary legislation rather than delegated to subordinate legislation.

As we recommended, the Executive amended the bill so that regulations made under the power will be subject to the affirmative procedure. The Executive also clarified section 82(2)(c) so that the regulations will be able to determine the identification and information that professional fundraisers are to provide, rather than simply the information that they are to provide. However, the Executive does not seem to have addressed the committee's other recommendations on the drafting of section 82, particularly those on the power to create criminal offences in regulations rather than the inclusion of offences in the bill.

I would like to know what members feel about that.

I accept that it might be difficult to specify the nature of the offences and that the Executive might circumscribe itself by doing so. However, I am concerned that not specifying the offences in the bill is not good legislative practice. Therefore, I would like the committee to seek clarification on the matter, perhaps during the stage 3 debate on Thursday afternoon.

I do not see why it is particularly difficult to specify the offences in the bill. It is normal for offences to be in primary legislation rather than created through subordinate legislation. I do not understand why the Executive has chosen that method—we have not had a full explanation. However, given the timescale and the fact that the stage 3 debate is on Thursday, the best approach is, as Christine May rightly suggests, to question the minister in the debate to see whether we can get an explanation of the Executive's approach.

We will inform the lead committee of the issue and raise the matter as quickly as possible with the Scottish Executive. We will then raise it in the stage 3 debate. Are there any other mechanisms that we should use?

We might want to alert the Presiding Officer to the fact that we want to make a comment.

Yes, although that has never been a problem in the past.

Section 94 is on consequential amendments. As introduced, the section allowed the Scottish ministers to amend by order any local, personal or private act of Parliament, as well as any other act of Parliament or of the Scottish Parliament, in relation to sections 92 and 93 of the bill. Section 94 has been removed by the Executive, which now takes the view that it is unnecessary, given the customary general powers to modify enactments, as provided for in section 100. Is that agreed?

Members indicated agreement.

Section 97 is on the population of the register. A number of concerns were expressed at stage 1 regarding the bodies to be covered by the section. The committee was particularly concerned that the power was open ended and that no time limits had been included in the power such that, in theory, ministers could exempt any charity from the provisions of the bill without limit of time. Although ministers indicated at the time that they considered it impractical to include any time limits in the bill, it appears that, after further consideration and consultation with OSCR, they have revisited the section in the light of the comments that the committee and others made. As a result, the order-making powers have been revised substantially. In particular, the Executive has now included time limits for the exercise of the power. Are we content to report to Parliament that the Executive's changes have addressed our concerns?

Members indicated agreement.

Section 100 is on ancillary provision. The section makes the customary provision that allows amendments to primary and other legislation, in consequence of the bill, to be made by order. As a result of the removal of the power to make transitional, transitory or savings provisions from section 97, section 100(b) has been amended to include those provisions. Are we content with that amendment?

Members indicated agreement.

Section 101 is on orders, regulations and rules. The section contains the usual procedural provisions relating to subordinate legislation under the bill. Amendments have been made to change the procedure for instruments under sections 19(8) and 81(1) from negative to affirmative and to provide that orders under new section 7(4A) are also subject to the affirmative procedure. Are we content to note those amendments?

Members indicated agreement.

Section 104 is the short title and commencement. At stage 1, the committee questioned the drafting of the section, which provided for section 97 to be commenced on royal assent, although the terms that are referred to in that section were defined in section 103, which was to be commenced by order. As was promised by the Executive, the reference to section 97 has now been removed from section 104. Are members content with that amendment, which addresses our concerns?

Yes.

That brings us to the end of our consideration of the Charities and Trustee Investment (Scotland) Bill. To be fair, apart from issues around section 82, most of our concerns have been addressed.