Chamber and committees

It is. I met OSCR recently. The powers will be important to it. It wants them and believes that they are necessary and proportionate.

A specific process for incorporation or change of legal form is not part of the bill, and that is not being consulted on, as you know. Creating a bespoke process for an unincorporated charity to become incorporated, usually by becoming a SCIO, would require extensive consultation with the sector, especially when it comes to small charities and those that have already been through the process. We would want to explore and capture that in the wider review. I understand that there are benefits to charities becoming SCIOs or companies, the ability to access secure funding streams being a key one, as well as having limited liability. The problems that charities can face when going through the incorporation process are largely outside the remit of charity regulation and the OSCR process.

I think that there are two provisions in the bill that would assist charities wishing to incorporate. I do not know whether Caroline Monk wishes to say more, but I would refer to the record of mergers, and the schedule to the bill contains a provision

“to allow duplicate charity names as part of merger”.

I do not know whether you would like more detail on that, but the main point is that we would want to consider it as part of the wider review.

That is an important point. Again, it is important to say that the main additional requirement for all charities will be to provide OSCR with the charity trustee names and contact details, including postal and email addresses. Charities should already hold that information, so the requirement should not be onerous. The provision of trustee details will take place through OSCR’s existing system, with which charities are already familiar, so the process will not be new or strange to them.

Importantly, OSCR’s data shows that the average number of trustees in a charity is eight, so, for many charities, providing the name and contact details of trustees will not create huge additional burdens; it will be part and parcel of what they would normally do as part of their routine reporting to OSCR. It is important to stress that there is nothing onerous in that respect.

I know that the committee has looked at that area in some detail. Currently, the ability to apply for a dispensation from the inclusion of certain information in the register is provided for in the 2005 act. The bill extends the current dispensation provisions to cover the new trustee information on the register. The ability to do that is already there and is being extended to cover the new trustee information.

OSCR will operate the mechanism in the same way as it does now: assessing the information that is provided case by case. In addition, the bill gives OSCR the power to exclude information from the register of its own accord, if it believes that the safety or the security of a person or property could be jeopardised, without a charity or a trustee having to apply first. That could relate to a specific charity or type of charity, such as a women’s refuge.

On your second point, about a deterrent, I stress once again that the bill does not alter anything about the dispensation mechanism that OSCR has been operating since the 2005 act was passed. As I said earlier, the bill extends that mechanism to the new provisions.

A charity or any of its trustees will be able to apply to OSCR for a dispensation from the requirement to publish the name or names of charity trustees on the register where, as I said, publication could

“jeopardise the safety or security of”

a person or property.

OSCR has an established procedure in place for dispensation and is well used to assessing requests and working with those who are applying for a dispensation before information is entered in the register, so it knows how to do that. The names of trustees are already contained in a charity’s accounts, and the accounts are already publicly available simply by way of a request that is made to a charity directly as opposed to automatically. The measures in the bill will put information on every charity in a single place in order to enhance access by the public.

I think that that is the right balance, and it does not make a huge fundamental change.

No, I do not think so. I go back to the points that I have just made in relation to smaller charities. There is nothing burdensome in the bill; we are talking about the provision of details with which charities will already be familiar. They will have that information, so there will not be a huge additional burden.

For many charities, providing the name and contact details of trustees will not create additional burdens—they will already have that information and will be used to providing it as part of their routine reporting to OSCR. I do not believe, therefore, that that requirement will give them any particular difficulties.

The development, introduction and population of the internal schedule of charity trustees is likely to take place over two to three years, and charities will therefore have significant time in which to prepare for that specific change, so I do not think that it will be onerous.

Our policy intention is to capture those cases in which the donor is not able to change where the gift goes—for example, because they are deceased. The record of mergers was included following discussions with the Law Society of Scotland on the difficulties of legacies that have been left to charities that have ceased. We are not aware of any difficulties around lifetime gifts. Caroline Monk is probably closer to the detail on this, so I will bring her in.

I will bring Rebecca Reid back in on that point.

The current and proposed disqualification criteria are based on behaviour or conduct that the Government considers makes a person unsuitable to hold office as a charity trustee. That goes back to the importance of the trustee role and the fact that trustees are responsible for managing money and property that have been donated by the public in good faith. However, it is recognised that in some circumstances a person might have valuable experience and expertise to bring to the role of trustee, notwithstanding that they would otherwise be disqualified.

Automatic disqualification for bankruptcy is time limited and applies only until the debtor is discharged. On discharge, which can happen quite quickly—in a matter of months, in some cases—the disqualification falls away.

It is also open to anyone who would otherwise be disqualified from acting as a trustee on any of the disqualification grounds to apply to OSCR for a waiver. The existence of the waiver mechanism means that, although disqualification is automatic, it is not absolute, and it can be waived at the regulator’s discretion.

The existing waiver system and its extension to the new automatic disqualification criteria demonstrates a recognition by the law that there will be cases in which a person who is disqualified can still hold a trustee or senior management position. Again, though, it is for OSCR to make that judgment.

The third sector interfaces might offer a good starting point, given their reach into some of the smaller charities. It is important that we involve them, so that would be very much on my radar. The TSIs would be a good mechanism—so would others, but TSIs would probably be the first port of call.

The committee has taken evidence on that. OSCR already works with umbrella charities or parent charities in cases of charities not submitting, and it has done so for a number of years. When a charity fails to provide accounts on time, it is shown on the Scottish charity register and there is nothing to prevent OSCR sharing that information with the parent or umbrella organisation and working with it to ensure compliance by the individual charity. For example, if you take a church body that is not a designated religious charity, exactly the same applies. The supervisory functions of the designated religious charity in respect of the individual church would apply and it would be for the DRC to deal with that.

I hope that that gives you some clarity.