An update on Scottish charity regulation
5 Sep 2019
OSCR, the Scottish Charity Regulator, has had a busy summer issuing a number of further updates and topical developments affecting the Scottish charity sector. We outline a number of these in this article.
Scottish Charity Law Consultation
Following consultation earlier in the year on proposals to change the Charities and Trustee Investment (Scotland) Act 2005, the Scottish government has now produced an analysis of the responses received.
To remind readers, the principal changes set out in the consultation included proposals put forward by OSCR to enhance public trust and confidence in the charity sector by:
- Increasing transparency;
- Providing OSCR with greater enforcement powers; and
- Streamlining operations and increasing efficiency.
The consultation period yielded 307 responses with the vast majority agreeing with the OSCR proposals.
OSCR has produced a response to the report thanking respondents for their contribution and for their appetite for change indicated through the responses received. This would also be relevant to charities registered with the Charity Commission that are also registered with OSCR.
It is unclear when any reform bill will be forthcoming. OSCR has welcomed the development of a working group to consider the changes to the Scottish Charitable Incorporated Organisations (Removal from the Register and Dissolution) Regulations 2011, with a view to bringing forward amendment regulations.
We see this as a welcome development against the current practical difficulties under the existing dissolution regulations for SCIOs.
Scottish Governance Code
The Scottish Governance Code for the Third Sector was issued in November 2018. The code sets out five core principles and key elements of good governance for the boards of charities, voluntary organisations and social enterprises, whatever their shape, size or activities.
It encourages trustees to look at, and improve, their governance, and is supported by practical resources.
Designed for charities of all sizes, the code is recommended as a tool to support continuous improvement and strengthen the effectiveness of governance across the Third Sector in Scotland.
Further to the issue of the code, the Scottish Council of Voluntary Organisations has created a Good Governance Checkup document to be used in conjunction with the code to assist trustees to regularly review and measure their governance procedures and policies.
This tool is a welcome addition to the code, which is primarily a principles-based document and provides the Scottish charity sector and its trustees with a tool, similar to the diagnostic tool available under the Charity Governance Code in England and Wales issued back in 2017.
Having a tool to monitor progress on governance initiatives or alignment to best practice provides trustees with the ability to explain, in annual reports, whether they are compliant with best practice or to explain where further work is to be done. Such apply or explain reporting is encouraged within sector governance codes.
As we complete the 2019 annual reporting cycles with our clients, we will continue to engage on their approach to the code and these emerging complimentary tools.
Charity trustee information and guidance pack
OSCR, mindful of its duties to providing advice and guidance to charity trustees, has produced a new information and guidance pack.
This pack is designed to cluster the best practice advice available from OSCR into one easy to access download pack.
To access the pack there is a requirement to answer a short questionnaire to filter which elements of the guidance would be most relevant to you and your charity.
In addition to detailing what guidance you should read, it contains:
- Information on what charity trustees need to do;
- An overview of annual monitoring;
- 10 key points to running a charity;
- Sources of help and advice;
- Information on publicising that you are a charity; and
- Information on when to tell OSCR about changes to your charity.
This interactive guidance is a welcome development to inform trustees on their duties, the key points to operate their charity properly, where to source help and advice and the appropriate OSCR guidance relevant to their type of charity.
Kenneth McDowell, Partner