Charity law changes could affect Scotland
8 Jun 07
Warning that requirements for registration will cause English charities to reconsider
Concerns have been raised that English charities operating in Scotland may be forced to pull out due to the requirements of the Scottish charity regulator OSCR.
Under the Charities and Trustee Investment (Scotland) Act 2005, any English charity occupying land or premises or carrying out any “activities” in Scotland, must now apply to OSCR, the Office of the Scottish Charity Regulator, for entry on the Scottish Charity Register. Under OSCR directions “activities” is widely defined, for example covering meetings of members, even if no public events or fundraising are involved.
Once registered, the English charity is then subject to Scottish charity law requirements and restrictions which differ in various ways from the English equivalent. Importantly, these include the purposes regarded as "charitable", the respective accounting and reporting requirements, and the fact that under English law a charity is allowed, subject to conditions, to fund indemnity insurance to protect voluntary trustees against liability - something not available in Scotland.
A charity registered with OSCR would have to seek OSCR's consent on future proposed changes (e.g. of name or objects).
English charities which also operate in Scotland are being given just six weeks to comply with the rules.
Cecile Gillard, head of the charities and voluntary sector department at business advisory company Jordans, warned that OSCR's stance will force many charities to restructure their operations, or even to withdraw from Scotland altogether.
"It is impossible for most charities to meet OSCR’s demands so quickly", she said. "Most will want to take professional advice and their boards will want to consider the advice before they act. In addition, Charity Commission consent is needed before any change of purposes."
In response OSCR chief executive, Jane Ryder, said: "This issue is one of consistency in the application of legislation. Parliament considered and accepted that there might be different charitable purposes in England and Scotland, but also that charities with significant operations in Scotland must register with OSCR.
"We are in dialogue with all of the charities affected and in the vast majority of cases, only a minor alteration to their constitutions is needed to satisfy Scots law. Indeed, we have already provided a form of words, agreed with the Charity Commission, that would meet this requirement. As the Regulator we feel that to propose a blanket exemption from the charity test for all bodies that are charities registered in England and Wales, with their differences in constitutions, size and status, would be inconsistent and impractical."
OSCR have also said that the six week period is the time by which they should have been informed about the intended action, not the time by which it would have to take effect.