Hodgson Review of 2006 Charities Act

Last year, the Government appointed Lord Hodgson to conduct a wide-ranging review of the Charities Act 2006 to investigate whether it is fit for purpose. He was asked to consider if better regulation is needed and whether the existing rules are enabling charities to operate easily. The Government will now consider his recommendations, and next steps.

For a copy of the review, see Hodgson Review calls for a ‘new settlement’ for charities

Reservations have been expressed about some of the report’s recommendations. These include:

• Permitting charities that fall into the “large” category (income over £1m) to pay their trustees.
• Urging government to work with the Charity Commission to develop a fair and proportionate system of charging for filing annual returns with the commission and for the registration of new charities.
• Scrapping the requirement that charities must make investments for maximum profit and make it easier for them to put money into social enterprises.
• Requiring charities to publish more information about their income and activities.

NCVO chief executive Sir Stuart Etherington said in response:

“The report makes some sound recommendations for reducing undue bureaucratic burdens on charities, but there are a few ‘bad apples’ which run counter to the general spirit of maintaining high levels of public trust and confidence in charities.

Large charities can already seek the Charity Commission’s permission if they want to pay their trustees and that system is working well. Making the right automatic undermines the value of voluntarism, which defines the sector and goes against the public mood – Lord Hodgson’s own report identifies that the majority of the public oppose the idea of paying trustees

For more reactions, see Charity sector responds to Hodgson report