Policy responses and statements

Name of organisation:

OSCR (Office of the Charity Regulator)

Name of policy document:

Consents and Notifications: Consultation on the process for changes under sections 11, 16 and 17 of the Charities and Trustees Invesment (Scotland) Act 2005

Deadline for response:

27 January 2006

Background: This consultation paper explains the circumstances under which a charity needs OSCR consent and when a charity needs to notify OSCR of any changes. It sets out the proposed process for consents and notifications

COMMENTS ON
OFFICE OF THE CHARITY REGULATOR (OSCR)
CONSENTS AND NOTIFICATIONS: CONSULTATION ON
THE PROCESS FOR CHANGES UNDER
SECTIONS 11, 16 AND 17 OF THE CHARITIES
AND TRUSTEES INVESMENT (SCOTLAND) ACT 2005

The Royal College of Physicians of Edinburgh is pleased to respond to the Office of the Charity Regulator on its consultation on Consents and Notifications.

General Comments

The College, being established under a Royal Charter, understands that OSCR has no authority in relation to the re-organisation of the College under sections 39 and 40 of the Act. However, the College has responded to all questions as part of the wider consultation exercise on implementation procedures.

Question 1 – Are there other circumstances in which OSCR should consider a charity name to be offensive?

OSCR should adopt a similar approach to the registration of business names in this regard.

Question 2 – Should more detailed guidance be developed at this stage on what may be considered objectionable names, or is the general guidance above sufficient?

At this stage it is difficult to recommend any further detailed guidance.

Question 3 – Do you agree that OSCR should be assured that the proposed action for which consent is sought is in the interest of the charity? Do you agree with a general approach to section 16 consents based around the “reorganisation conditions” of section 42(2), but recognising there may be other acceptable reasons for change?

Section 16 consents are intended to allow external quality control of the change process within those charities with the power to change their activities and purposes. The regulator should have no direct role in these decisions, other than to ensure that the charity is acting within its powers. It is important to clarify this point in guidance for trustees to allow all to understand whether trustees have an obligation to notify OSCR of any change that falls within their own powers or seek consent if beyond their own powers. It would, however be helpful for OSCR to alert charity trustees early to the possibility of de-registration if their changes were likely to result in a failure to pass the approved purpose and public benefit tests.

Question 4 – Do you agree that the remaining assets of a charity that is winding up should be transferred to a charity with similar purposes, but that in cases of very small charities this requirement should be relaxed? What do you think should be considered ‘very small’ in this context?

The authority to transfer assets may be specified within the constitution of the charity, in which case there should be no need to require the consent of OSCR, especially as this may delay important and necessary action and disrupt the actions of the trustees. However, if the constitution is silent on this matter, it is reasonable for OSCR to supervise the transfer to a similar charity.

In this context the definition of “very small”, allowing greater freedom of transfer (irrespective of the trustees powers granted in the constitution) should be for charities with assets to up to £15,000 in value. This will capture most small local charities including time limited organisations.

Question 5 – We would welcome your views on whether OSCR should require charities that wish to amalgamate or wind up to publicise this intention, either generally or to a particular group of individuals or organisations

It may be in the public interest to list those charities intending or seeking consent to wind up or amalgamate. As OSCR will have this information, it should be straightforward to add this to the website.

Question 6 – Are there any other matters that OSCR should consider when giving or refusing consent (under section 16) to a change in the charity’s constitution in relation to its purpose?

The time targets set for OSCR decisions are not clear. Section 5.1.1 implies a 42 day guaranteed turnaround for decisions by OSCR where warranted. This seems to be inconsistent with section 5.4.2 where OSCR has 2 months to reach a decision on changes to purposes, and 5.4.3 where even the 2 month target may not be guaranteed.

Time delays could be damaging to the organisation (for which the trustees could be held liable) and it would be helpful to have a fast track system for urgent cases.

Silent consent is difficult to confirm, will be worrying for trustees and potentially disrupt forward planning unless OSCR undertakes to advise the trustees in writing as soon as possible and certainly within the guaranteed period.

Where OSCR is empowered to take a decision, it is important that social or environmental changes since the initial purposes were drafted are considered to allow sensible, if radical, proposals for change. It is not the role of the regulator to restrict the activities of public benefit organisations unnecessarily.

Question 7 – Are there any other matters we should consider when giving or refusing consent (under section 16) to amalgamation or winding up?

Again, the time targets and whether OSCR proposes active or silent consent is unclear. Section 6.1.1 also implies a 42 day turnaround in terms of the time before planned execution date for the application to be lodged with OSCR. In 6.2.2, OSCR has the power to direct the applicant to delay action for up to 3 months to allow processing. In 6.4.2, OSCR is proposing that they intend to give active decisions and within 28 days, and then in 6.4.3 states that in the absence of such notification within the 28 day limit, consent can be assumed. Also, in 6.4.2 OSCR is advising of the power to direct a charity to delay action for up to 6 months where there appears to be a difficulty. Why are the decision taking periods different to those proposed for refusals relating to changes in purposes? Guidance for trustees will need to clarify the time limits clearly.

In all cases, processing times should be as short as is feasible, given the resources available to OSCR, as it would be concerning if necessary action on the part of the trustees to allow them to discharge their duties effectively was delayed by the regulator.

Copies of this response are available from:

Lesley Lockhart,
Royal College of Physicians of Edinburgh,
9 Queen Street,
Edinburgh,
EH2 1JQ.

Tel: 0131 225 7324    ext 608
Fax: 0131 220 3939

[26 January 2006]