This article was co-written by Amina Amin, a Solicitor in our IP, Technology & Commercial team.
The Charities (Regulation and Administration) (Scotland) Bill was introduced to the Scottish Parliament on 16 November 2022 following legislative proposals put forward by The Office of Scottish Charity Regulator (OSCR).
The aim of the Charities and Trustees Investment (Scotland) Act 2005 is to provide a regulatory framework that safeguards and accounts for the charity sector. However, with the current legislation now 17 years old, there is now a need to reform.
The Bill aims to refine the current legislative system by improving transparency and accountability of charities within Scotland. It hopes to provide a modern perspective on the operation of charities, whilst refining the current charity law. The Bill will not, however, focus on addressing any of the key principles of the 2005 Act.
OSCR’s Chair, Marieke Dwarshuis says, if the Bill is passed, it “will enable OSCR to increase public trust in Scotland’s 25,000 charities by increasing transparency around their management and the activities they carry out. It would also enable us to take more effective action against the very small minority of charities who don’t follow the rules.”
What are the proposed key changes that will enable OSCR to be more transparent and effective?
The Bill proposes that it would:
- Introduce the requirement on OSCR to publish the statement of account for all charities in the Scottish Charity Register.
- Update records detailed within the Register to include charity trustee details.
- Create a publicly available (and searchable) record of any trustee removed from office.
- Refine the criteria in relation to the automatic disqualification of charity trustees.
- Provide OSCR with the ability to issue positive directions to charities and carry out investigations into previous charities and their trustees.
- Introduce the requirement for all charities within the Register to retain a connection to Scotland and for de-registered charities’ assets to continue to be utilised for the public benefit.
- Extend the rules allowing OSCR its power to appoint interim trustees.
- Establish a record of charity mergers providing for the transfer of legacies to prevent loss of legacy income to charities.
Whilst the Bill would provide practical improvements, it has been recognised by stakeholders that the Bill fails to address the wider issues facing the charity sector. It will be interesting to note what changes are enacted in the coming year; however, a clear focus of the proposed legislative changes is on the people in overall control and management of a charity, the trustees.
