Dáil debates

Tuesday, 21 January 2014

Charities (Amendment) Bill 2014 [Private Members]: Second Stage

 

8:30 pm

Photo of Pádraig Mac LochlainnPádraig Mac Lochlainn (Donegal North East, Sinn Fein)
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I move: "The the Bill be now read a Second Time."

Photo of Michael KittMichael Kitt (Galway East, Fianna Fail)
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I understand the Deputy is sharing his time with Deputies Martin Ferris, Ó Snodaigh, O'Brien, McLellan and Colreavy.

Photo of Pádraig Mac LochlainnPádraig Mac Lochlainn (Donegal North East, Sinn Fein)
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That is correct.

Sinn Féin is using its Private Members' business tonight and tomorrow night to debate our recently published Charities (Amendment) Bill 2014. As most Members of the House will already be aware, this Bill seeks to amend the Charities Act of 2009 by ensuring that all the provisions of that Act are fully enacted by 31 May 2014. It also seeks to add the "advancement of human rights" on to the definitions of charities eligible to be registered, as outlined in the charitable purpose section or section 3 of the 2009 Act.

I want to take Members briefly through the purpose of the 2009 Act before going on to discuss our Bill. The original purpose of the Charities Act 2009 was to reform the law relating to charities. It aimed to ensure greater accountability, offer protection against abuse of charitable status and fraud and also to enhance public trust and confidence in charities and increase transparency in the sector. The Act provided for the creation of a new charities regulation infrastructure, a charities regulator, a register of charities, consultative panels to advise the regulator and a charity appeals tribunal, and the Act laid down, for the first time in primary legislation, a definition of charitable purposes. The Act meant that organisations, which wished to present themselves to the public as charities, or fundraise directly from the public for charitable purposes, will have to seek and secure inclusion in the new register of charities.

What we in Sinn Féin have produced is a short and simple Bill which is of the utmost importance not only to charities but also to the public in what has escalated to a crisis following the Central Remedial Clinic scandal. Our Bill seeks to ensure that the 2009 Act is fully implemented once and for all.

Since the foundation of this State charities have been unregulated. The effect of this is now doing untold damage both to the charities but, more important, to all of the vulnerable people who depend on them. In 2009 Fianna Fáil published a shiny piece of legislation claiming to regulate the charities sector but never implemented it, thereby failing the charities and public confidence in them. Labour and Fine Gael have had almost three years to rectify this by fully enacting all the provisions contained within but instead they rested on their laurels and dragged their feet, allowing scandal after scandal until it got so big that they had no option but to agree to the establishment of a regulatory authority. I thank the Minister for finally listening to the charities sector and Sinn Féin on this one. Unfortunately the failure to act on this issue over the years is what has created the scandal we are now witnessing. The next logical step is to support our Bill tomorrow night and ensure that the entire infrastructure arising from the original Charities Act is fully implemented by May of this year.

Despite the fact that it is welcome and certainly a step in the right direction, the establishment of a charities regulatory authority by Easter in isolation is simply not enough. We need all provisions of this Bill enacted and we need it done as soon as is possible. The most vulnerable in our society are already suffering massively due to the deeply unfair and unjust cutbacks implemented by this Government. The failure to fund many schemes, on which many of our most marginalised people depended, has meant that more and more people were relying on charities for their very survival. Economically and in terms of the protection of people's rights, the charities sector has often had to step in and do what the Government has ceased to do.

The scandals which have erupted have, understandably, had a hugely negative effect on public confidence which has led to a dip in donations to charities. The recent revelations of generous salary top-up payments and gold-plated pensions paid from charitable funds at the Oireachtas Committee of Public Accounts hearings are proof that the sector needs regulation urgently. In a survey by The Wheel it was found that one in five charities around the country was facing a 10% dip in their donations even before the scandalous revelations about the Central Remedial Clinic this week. Of 150 charities surveyed, it found that 53% have suffered a drop in fundraising, 97% believe public trust has been lost and 54% believe the damage may be permanent. The survey also revealed that one in four has received concerned telephone calls or correspondence from donors or members of the public and 14% of volunteers, fundraisers or staff have been subjected to negative or abusive comments. It was also widely agreed by more than 80% that the Government had not done enough to implement the Charities Act 2009.

The second aspect of our Bill relates to the inclusion of the "advancement of human rights" in the definitions under "charitable purpose" in section 3 of the Charities Bill 2009. This should never have been left out in 2009 and is seen as a serious omission. In other jurisdictions it is widely accepted that the advancement of human rights is a charitable purpose. There is also a knock-on effect in the failure to include this; for example, the principle of equivalence, which lies behind the Good Friday Agreement and which has directed much of the legislation in this area, is undermined as a result of this omission because as most of Members will know, human rights advocacy is afforded charitable status in the North.

Despite the fact that existing human rights non-governmental organisations are protected, organisations established in the future to protect human rights will not be afforded charitable status. In addition, existing NGOs will encounter greater difficulties in raising funds because they will not meet the criteria set out in the legislation. The omission of human rights as a charitable purpose is a systematic and concerted assault on the human rights architecture of this State.

The Minister will bring in a Bill to amalgamate the Human Rights Commission and the Equality Authority later this year. There have been concerns around the significant cuts to funding, particularly in terms of the Equality Authority where the chairman stood down because of the huge cuts and the inability of the authority to do its job. This State is internationally respected in terms of our human rights track record in developing countries. We are a world leader in terms of our contribution per capita to overseas development and in respect of what we donate to charities. That is something we in Ireland do well. It was a serious mistake not to establish the regulatory authority and also not to implement all of the provisions of the Act. We have an opportunity to debate this matter tonight and tomorrow night. The Minister has now taken an measure in this area and he could support this Private Members' Bill.

We have not had any indication of the Government's position, but I hope it can support this Bill and work with us and we can work with it to make it happen. All of us, collectively, need to send a message from the House about the issue that has arisen at the Committee of Public Accounts and which has been handled expertly. The committee's hearings have shone a light of despair on a dark issue. People contribute to charities and Ireland is one of the leading countries in terms of what we contribute per capitafrom the Exchequer or in people contributing to charities. For the people to see stories emerge in the way they have is galling when added to all of the other stories on high pay. We need to be seen to stand together and, collectively, restore confidence in the sector to make sure it has what it needs.

It is clear to Sinn Féin that if we had not put this issue on the agenda, we might have been waiting until the end of the year. When asked about this last Friday morning, the Minister for Health, Deputy James Reilly, said it would be taken in October or November. He knows how Bills scheduled for late this year may be taken next year. The first step is welcome, but let us go the whole way and have the entire Act implemented. We should work together to restore confidence in the sector. I hope for all-party support tomorrow night and that we can work together to make it clear to the public that what it has seen at the CRC will never happen again in the charity sector. The money the public contributes should, in the main, go to those they hope to benefit. The concern about the burden of administration and managerial costs should be dealt with once and for all. I hope we can work together to secure a pass tomorrow night rather than a "No".

8:40 pm

Photo of Martin FerrisMartin Ferris (Kerry North-West Limerick, Sinn Fein)
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Charity should not be necessary in a just society, but it is vital in this society, with a Government imposing austerity on working people who can hardly take anymore. The message going out from the Government, more often than not, to people in trouble because of illness, a disability, poverty or discrimination is that they are on their own. However, they are not alone because there is a vast body of people in this country who are there to help, not for profit or personal gain but because they are selfless in their efforts for the common good.

We are a generous people. Anyone who has ever stood to watch a marathon or watched the women’s mini-marathon on the streets of Dublin during the June bank holiday weekend has seen a passing parade of generosity and a willingness to help our fellow human beings. Every t-shirt will bear the slogan or logo of groups, foundations, trusts and societies from north, south, east and west which step into the breach where State social services fall down or to add to existing services where a need arises for which the State is not yet providing. Every disease, condition, mental and physical disability, syndrome or injury is represented. The runners have not only trained to perform the physical feat, but they have organised fundraising events and pestered their workmates, family members and friends to support their cause and help the people who need it.

We have an international reputation for our generosity. When Bob Geldof organised Live Aid in 1985, despite the State being in economic recession, the Irish people donated more per capita than any other nation to the £40 million total by giving a staggering £7 million. Our reputation for generosity is something of which we should be proud and which we should protect by making sure money donated by people, usually out of the goodness of their hearts, is not siphoned off for a purpose other than the cause for which it was intended. The Government which has made the need for charity in society more urgent owes them that at least. The Bill attempts to protect the generosity of citizens by putting in place the proper safeguards for their selfless contribution. It is designed for two purposes: first, to enact the provisions of the 2009 Act. After the CRC scandals exposed last week, there was never a more opportune time to enact a Bill to ensure charities would carry out their financial dealings in a proper, transparent and administratively correct manner and that they would be given guidelines by which to do so.

The establishment of a modern regulatory framework for the first time, the charities regulatory authority, is as overdue as it is necessary. The ability to register a charity and have a template for its regulation will be a great relief to those trying to self-regulate the raising and charitable distribution of money collected from citizens. It will give a sound foundation to the generosity of the people and help to remove the doubts which have crept into people’s hearts in the past few weeks when they are approached to donate money, buy a ticket or contribute to a fundraising event. It will also provide protection for the very special kind of people who devote much of their spare time to raising money for charities throughout the State and who deserve to have their work regulated and certified as honest and scrupulous, which it is in most cases.

The Bill would provide for enactment to take place not later than the end of May. Why would we want to delay it any longer? It is already overdue. I particularly welcome the provision for the inclusion of the advancement human rights as a charitable function. It is a logical progression for anyone involved in fundraising for a cause to eventually ask himself or herself and then society why he or she should be out shaking buckets and selling tickets in order that people can have their human right to live as independently, comfortably and securely as is possible, despite physical, mental, financial or social difficulties. The best charities become a voice for those they try to help. It is a logical progression for those who care. The Bill would provide a framework that was a necessity up to last week, but after last week, it is vital. I urge Members of the House to support Sinn Féin's Bill and send a message to members of the public who have been badly shaken, disappointed and let down by the actions of a few that have come to light in the past few weeks.

Photo of Jonathan O'BrienJonathan O'Brien (Cork North Central, Sinn Fein)
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Some 12 months ago the Minister visited Cork and, for our sins, we put on football boots and socks and ended up playing a charity match for a worthwhile organisation that was just getting off the ground. It was trying to help families who had lost loved ones through suicide. That effort is being replicated across the State and there is not one Deputy or member of the public who has not contributed to a charity of some sort. Deputy Pádraig Mac Lochlainn put it well when he said that, by our nature, Irish people are charitable. We do so without a grumble and because we recognise, despite any hardship we are going through, that there are others who are worse off and in greater need of finance, support or resources to help them to have a better quality of life.

There is no Deputy or member of the public who has not been touched by a charitable organisation in a personal capacity. When my father was dying of motor neurone disease, the Irish Motor Neurone Disease Association provided help and support for our family that was second to none. Organisations cannot provide that service or show compassion for families such as mine without the Minister, Deputies and members of the public dipping their hands into their pockets and handing over hard-earned cash.

The recent scandal involving the Central Remedial Clinic, CRC, has rocked the confidence of many people. I am very confident that this will not stop people from giving to charities, nor should it, as we cannot allow the greed of the few inflict on the very many in need of those charities. That would be unfair, as people in society will recognise as they continue to contribute to charities. Nevertheless, damage has been doubtlessly been done to confidence in some areas, as there cannot be a scandal like this without people's confidence being affected.

There is probably a sense of envy among Opposition Deputies when they see a Minister like Deputy Shatter who has the power to enact the very measures needed to restore public confidence to a sector which not only relies on but thrives on public confidence. We welcome the Minister's announcement to set up the regulatory authority by Easter but measures must go beyond that, and the Minister seems to recognise that. I followed some of the speeches given by the Minister since taking office at the Department of Justice and Equality, and in 2011 he stated that although there was some regulation with regard to the Office of the Director of Corporate Enforcement, taking in the charitable sector, without doubt the ideal solution was to enact all aspects of the Charities Act 2009; that must happen now.

At the beginning of 2014, there is probably more pressure on charities to provide services as we are coming off the back of an economic recession. I will not play politics with the issue but because of the economic position we were in, there have been cutbacks in areas such as community groups, support services and all spheres of Irish society. As a result, more people have been forced to turn to charities. In my constituency and probably in others, local welfare officers are now directing people wishing to avail of Department of Social Protection services to organisations such as the Society of St. Vincent de Paul. The Minister has it within his gift - he can do it at the stroke of a pen - to restore public confidence in the area, which is needed now more than ever. I hope he will support Deputy Mac Lochlainn's Bill and that we can work together to restore public confidence and ensure that those people who rely on charities can get the support they need.

8:50 pm

Photo of Aengus Ó SnodaighAengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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As other Deputies have already stated, the CRC scandal has done untold damage to the fund-raising potential of charities across the country. Instead of delivering, for example, 14 full-time physiotherapists or occupational therapists, as would have been intended by those who made donations to the CRC in its Christmas bear appeal, half of the money was spent on a golden handshake. It is a scandal that people put their hands in their pockets in straitened times with an understanding of where the money is supposed to go only to be left with a big black hole in the funding and financing of the CRC because it paid out such a handsome sum to the man at the top.

The need for support for charities, as noted by Deputies, has risen sharply in recent years, and they are needed more now than ever. Some of this need comes because of budget cuts from this and the previous Government but it is also due to underspending on services etc. In 2011 alone there was a 35% increase in demand for the services of the Society of St. Vincent de Paul, and that rate has increased again in 2012 and 2013. That is the scale of the crisis arising from needs in our society. The Simon Community saw similar increases in the numbers of people seeking its service, and many other charities helping people in dire need have seen increased service demands as people have grown poorer because of the recession. Services that they relied on have not been able to deliver for such people.

The unravelling scandal means that many people who were previously very generous and donated to people less well off than themselves are no longer doing so. In some cases these people had very little but the Irish have always been generous, and we are renowned throughout the world because of that. I hope this scandal will not prevent people from being generous, and I appeal to the Irish public to continue giving at the same rate to charities. We have the responsibility to deal with the legacy of the CRC and ensure that no other charity will end up in the same position. Representatives of other charities will come before the Committee of Public Accounts and I hope they have put their houses in order. We should be able to say at the end of this period that charities in Ireland are properly regulated and the funding and donations goes where they are meant to.

The second part of the legislation before us deals with an omission from the previous Government in a Charities Act, which we raised at the time. This relates to organisations advocating for human rights which were excluded in being recognised as a charity. The matter should be addressed, which is why it is contained in this very short piece of legislation. I remind the House of what the now Minister of State, Deputy Joe Costello, stated at the time about the same issue. He indicated:

It is still beyond me why he [a Minister of State, former Deputy John Curran] is not prepared to accept a wording that provides specifically for the promotion and advancement of human and civil rights. Any of the areas that are covered do not cover the entire gamut of civil and human rights. These are organisations specifically dedicated to human rights. Amnesty International is one such organisation but its remit is not covered by the terms of this legislation [the Charities Act 2009].
He continued to say that the Minister of State at the time, former Deputy John Curran, had indicated that the status quo would not be interfered with but that the wording that clearly underpins our commitment as a country to the promotion and advancement of human and civil rights should be allowed. During the debate I also wholeheartedly agreed with the then Deputy representing Galway West, Michael D. Higgins, when he stated:
One could also argue that the last decade - the last five years in particular - have seen a retreat from the rights perspective internationally, so the amendment would be a very good thing. The most progressive NGOs are expressing their interest and wish to operate on a rights basis.
He also stated that the acceptance of the amendment at the time would save time in future in amending or reviewing the legislation. He argued that the Minister of State at the time should have considered how the accommodation of five or six words would represent so many possibilities for the people interested in the area. We are appealing to the Minister in this respect today, and I said the same thing in my contribution at the time. As Deputy Mac Lochlainn indicated, the omission was contrary to the Good Friday Agreement and the equivalence principles of human rights advocacy, as such advocacy is recognised and afforded charitable status in the North. I appeal to the Minister to give an indication that this will be accepted. Not only should all the sections of the Charities Act be enacted but they should be acted upon as quickly as possible.

Photo of Sandra McLellanSandra McLellan (Cork East, Sinn Fein)
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The real victims in the recent controversy about pay, bonuses and pensions in the Central Remedial Clinic have been the clients and families. Nobody could fail to be moved by many of the families on our television screens on recent nights, with tears being shed in frustration and fear because of the greed of others. The work done by the staff in the CRC is second to none and I take this opportunity to compliment them on the sterling work they continue to do. The ripples of the recent revelations have been felt right across Irish society, and nowhere have they been felt more strongly than in the charities and community sector. Years of good work is under threat of being undermined and discredited by the few at the top who are more interested in lining their own pockets than providing a service to those who need it most.

Sinn Féin's contribution tonight is positive.

Our proposed legislation was written in consultation with the sector. It calls on the Government to reintroduce the advancement of human rights, as argued for by the sector but excluded by the Fianna Fáil Government in the 2009 Act. It also calls on the Government to specify the date for the full enactment of all the provisions of the 2009 Act as no later than 31 May 2014. The sector deserves to be supported and protected. That is what our legislation aims to do.

Right across the State, charities continue to provide services that the private and public sectors cannot or will not provide. I note great work being done daily in my constituency in Cork. I refer to groups such as Cumann na Daoine, Foróige and Youghal 4 All. As with many towns, Youghal has a healthy number of vibrant organisations providing a wide range of services, from those of Chatterbox, which promotes dance and music among young people, to those of High Spirits, a group that works with young people in the production of music, theatre and dance. Youghal Musical Society stages productions for all ages.

Groups with charitable status extend from the very local to the national and international. A household name is Comhaltas Ceoltóirí Éireann. From experience, I know of the great work it has been doing, particularly in Youghal, over the past 20 years. The organisation promotes Irish music and culture in every town across the island. It is also organised internationally. Its members are true ambassadors of Ireland and all that is positive in our culture.

I compliment some of the groups in Dublin that are tackling the causes and consequences of the drugs crisis. One such group is Recovery through Arts, Drama and Education, RADE, a group based in the south inner city. Its aim is to engage drug users with the arts and therapeutic supports and provide a platform their artistic expression. It has done this through the media of arts, film and theatre. Mick Egan and his dedicated team have provided an excellent service since 2004. Addiction Response Crumlin, ARC, provides a wide range of services from family support services to the Ciall project, which provides a safe, confidential and accessible service to the under-18s. ARC provides rehabilitation, education and aftercare services to families living with addiction.

Many athletes who competed for Ireland on the international stage in the Paralympic Games benefited directly from the terrific service provided by the Central Remedial Clinic. With regard to the homeless leagues, I had the privilege of playing soccer with those concerned here last year. We held a reception in Leinster House for those who played in the Homeless World Cup.

I mention these services not to single out any one project or service but as part of an attempt to highlight the rich and varied work provided by the sector. It needs our support, both politically and financially. It also requires that legislators legislate to protect those working in the sector and those they serve. Charity should not be turned into a political football. The challenge for us here as Members is to work together to provide a solution. The Bill deserves Members' support. The charities and those who benefit from them deserve no less. I encourage all Members in the House to support the Bill.

9:00 pm

Photo of Michael ColreavyMichael Colreavy (Sligo-North Leitrim, Sinn Fein)
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When people think of charity, they generally think of those things over and above basic necessities that make life and living a bit better for the poor, disabled and disadvantaged. Many charitable groups fulfil a role in this regard but in the current economic climate charity is a necessity for many. It was said that over the Christmas period, probably every Member helped in, organised or supported the raising of funds for various charities, be they local, national or international. I am sure that each of us met many constituents who simply could not survive, let alone live a life with dignity, without the helping and willing hands of some charity or other. Unfortunately, many rely on charity, sometimes just to make ends meet. This is the context in which any discussion on charity must take place.

How can we, as legislators, regulate charities so they can provide the greatest support possible for the people they aim to serve? As recent events have shown, there is clearly a need for this regulation to be stringent, transparent and fair. There can be no doubt as to the sincerity of the vast majority who work with the various charities in the country. Those involved in charities are among the most selfless and giving of people. They often do most of their work unnoticed by the general public, and it is rare that they get honoured in the public sphere. This, however, does not mean that their work should be unappreciated. The recent scandals surrounding the CRC should not detract from the considerable good work done by so many of those working with various charities.

As Sinn Féin spokesperson on communications, energy and natural resources, I am keenly aware of some of the sterling work carried out by various charities involved in tackling fuel poverty. It is striking to note that a quarter of what the Society of St. Vincent de Paul gives to families is spent on fuel and energy for homes. Despite enduring relatively mild winters, Ireland and the United Kingdom have the highest rates of seasonal mortality in northern Europe. It has been shown that such mortality rates result in no small part from inadequately protected, thermally inefficient housing stock. An increased rate of morbidity and a higher incidence of various cardiovascular and respiratory diseases have been associated with chronic cold exposure within the home through living in fuel-poor conditions.

The charity ALONE was founded by Dublin fireman Willie Birmingham in 1977 after he came across an elderly man who had literally frozen to death in a flat in Dublin city. The charity still works today to attempt to alleviate the suffering of many elderly people. Poorer and more vulnerable householders typically live in worse quality housing and have the fewest resources and opportunities to invest in improving their houses' efficiency and heating technology. That unnecessary deaths recur year on year should be a national scandal. The connotation is that the very lives of those affected matter less than they might among the not so old and not so cold. I acknowledge that the Government has invested in insulating homes but it is not enough or happening fast enough.

We have all been aware over recent weeks of the scandalous abuse of taxpayers' and generous citizens' moneys donated to a small number of charities. It is obscene to see what some of the senior executives of some charitable organisations receive by way of annual salary and expenses. It is questionably criminal as well as obscene that the money of hard-pressed citizens, given in good faith and through generosity to help improve the lives of people with disabilities, should be diverted to slush funds to provide pension benefits that most people could only dream of to those same executives. This rumpus arose only in the past month but I have no doubt that these unethical practices have been occurring for years.

I have serious concerns that these practices are more widespread than currently reported. What we are seeing may have been regarded as fair game and the norm by certain people who were put, by the political system, into positions that they could exploit for their own gain. Was this their pay-off for loyal political party membership? Corruption works best from the top down.

We must consider the role of auditors and accountants in all of this. As with the banking meltdown, auditors and accountants either noticed nothing wrong or noticed something but said nothing in the belief that it was an acceptable part of the prevailing culture.

There is something seriously wrong there. What is important now is to protect those depending on charity while ensuring the correct legislation, policies, practices, culture and checks are in place to minimise the opportunity for corrupt practices. There are some who will try to use this scandal to blacken the reputation and work of all charities and of all those people working for the agencies where unacceptable practices have presented. The Government, however, must resist the temptation to reduce or eliminate support to charitable organisations providing essential services. The Government's responsibility is to ensure there is proper legislation, policies and checks in place to ensure that all public moneys, whether provided by taxpayers or through voluntary contributions, are spent and accounted for properly. This Private Members' motion seeks to put in place the first piece of the very necessary legislation.

It can be argued that much of what is done in the name of charity in this country is simply filling the gaps in what should be quality, State-provided services. The majority of those who work for and support charitable organisations do so for the highest of idealistic reasons. It would be tragic if the actions of a few selfish, greedy, unprincipled and unregulated individuals were to blemish the record of so many heroic volunteers or, more importantly, were to undermine the very necessary services provided to those who need them most. This amendment to legislation would help the public to know that they can give in confidence to the charities of their choice. It would also give them the confidence to know that they will not be conned again. We should also urgently consider how best to legislate to ensure all aspects of cronyism, school-tie networks and silver and golden circles are tackled, whether they are in charities, State or semi-State bodies, political life, private, commercial or professional services because clearly, the banks are not the only offenders here.

9:10 pm

Photo of Alan ShatterAlan Shatter (Dublin South, Fine Gael)
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I am sharing time with Deputies Keating, Barry, O'Donovan, Connaughton and Spring.

I am pleased to address the House on this Private Members' Bill. We are all concerned at recent disclosures regarding certain charitable organisations. We are all concerned at the impact these disclosures are having on Ireland's charities, many of which are excellently run and have nothing to fear from increased transparency and accountability. The Charities Act of 2009 provides for a system of regulation of charities in Ireland, at the heart of which is the creation and support of strong trust and confidence in our charities. On the part of Government, we plan to support this through the phased introduction of the Charities Act.

In addressing the Bill before us today, I will first take some time to remind the House of our work in this area since coming to Government and outline what we intend to do in the coming months. The Charities Act was enacted under the previous Government in February 2009, with cross-party support. My own party, then in opposition, was pleased to support it as a necessary advance in the regulation of a sector that plays such a vital role in our economy and society. A vibrant and well-governed charity sector is in everyone's interests and the measures contained in the Charities Act are aimed at supporting this.

The Act provides for the establishment of a new regulator for the charity sector. The Charities Regulatory Authority is to be an independent State agency charged with the registration and regulation of all charities operating here. The creation of this body is essential to the full roll out of the Charities Act. By the time this Government took office in March 2011, over two years from the enactment of the necessary legislation, the authority was not yet established and no concrete plans for its establishment had been announced. A number of minor, primarily technical, sections of the Act had been commenced but that was all.

Under the restructuring of Departments that took place at the time this Government was formed, the Charities Act came into my area of responsibility as Minister for Justice and Equality. As with all other areas of existing or planned expenditure, the establishment of the new regulatory authority had to be examined as part of the comprehensive review of expenditure conducted by all Departments that year. During this process, it became clear that the roll out of the Charities Act as envisaged by the previous Government was no longer financially viable given the urgent need to reduce Government expenditure.

Notwithstanding this, at all times it has been the policy of this Government to strengthen the regulation of the charitable sector in a pragmatic and proportionate way. This is why, on coming into Government, we took some time to examine alternatives to the regime envisaged in the Charities Act that might deliver improvements in charity governance without the expense to the State and its citizens of establishing a new independent regulator. The outcome of this process was a recognition of the fact that, given that the Charities Act had been enacted and stood on the statute books, any meaningful new regulatory measures outside of the framework of the Act would first require its repeal or, at the very least, substantive amendment.

The Charities Act represents an important legislative milestone in this State. For the first time, charitable purpose is defined in law, comprehensive statutory registration of charities is prescribed and the legal basis is established for a significant increase in the information about charities and their affairs to be made available to the public. In view of this, and notwithstanding the fact that for reasons of cost it was no longer possible to implement the Act as originally envisaged, we have at no time proposed the repeal of this legislation. Such a move would not represent an advance in the regulation of the charities sector. Instead, we have put our efforts into determining how best to bring into force key measures of the Act in a way that does not involve unsustainable expenditure on the part of the State and yet is capable of delivering a demonstrable improvement in the regulation of the sector.

To advance this, my Department conducted a public and stakeholder consultation over an eight week period from January to March of last year. The constructive engagement of an active and informed stakeholder community has been one of the hallmarks of the development of charities regulation over many years. Since taking responsibility for this area, I have continued this approach and have directly consulted with some individuals and bodies myself. I was impressed by the scale and calibre of stakeholder participation in last year's consultation. I was also struck by the breadth of support among the sector and the general public for the introduction of these reforms. This engagement is helping to inform our approach and I am committed to an ongoing dialogue with our stakeholders as we proceed.

Following last year's consultation, I developed proposals for the implementation of the Charities Act and these were approved by Government last July. This will involve the establishment of a charities regulatory authority and the development and publication of a register of charities, as provided for under the Act. In order to minimise the cost to the taxpayer, we will initially establish the authority on a small scale, to be staffed by officials from within my Department.

In time and in order to enable the development of the services provided by the Authority, charities themselves will be required to meet some of the costs of its operation through payment of a modest and proportionate annual fee. This is provided for in the Charities Act. In this way, the regulation of charities will become largely self-financing in due course. It is only through utilising this provision that we are able to establish these new structures at this time of constraint in Government spending. The proposal to levy annual fees on charities was contained in the consultation documents published this time last year and charities had the opportunity to give their views on and propose alternatives to a suggested fee structure. I will take account of the views expressed and alternatives proposed before putting in place a fee structure. Registration fees will not be payable by charities before 2015 at the earliest.

Following Government approval of my proposals in July, I announced my intention to establish the new authority in 2014, following the necessary resource approvals from the Minister for Public Expenditure and Reform. Sanction to fill the post of CEO on an interim basis and a number of other administrative posts from within existing resources was received by my Department in mid December. The sanction given represents a reduction on the resources originally sought, such that the new authority will initially be staffed by approximately ten administrative staff. Its focus in the early phase of its operation will be on the preparation for publication of a statutory register of charities.

We are very aware of the urgency of making progress on this. That is why I announced last Friday that I intend to have the administrative staff positions filled by the end of February. Arrangements are also being made to fill the post of CEO of the new authority on an interim basis by this time. Regarding the independent board of the new authority, I also announced last Friday my intention to make appointments to this board by Easter. To facilitate this, I will issue a call this week for expressions of interest from suitably qualified persons who wish to be considered for appointment. I look forward to being able to report further progress to the House on this important work in the near future.

The importance of high standards of probity within our charities cannot be overstated.

Many of these are large organisations with a substantial financial turnover. Many of them receive significant levels of Government funding in addition to funds raised through the generosity of the Irish public. They have a duty to use those funds efficiently and ethically in pursuit of their charitable purpose, and those who provide the funds have a right to know that they are being used for the purpose intended by the giver - be that Government, philanthropic organisation, corporation, or private individual. Where funds intended for charity are not being used as intended, or indeed where they are being used inefficiently, such that an unacceptable proportion of the funds is spent on overheads, that should concern all of us, not least the charities themselves, who must strive to benefit their given charitable purpose to the maximum extent possible. No one disputes that those who are employed by charities must be remunerated at an appropriate level for the work they do, but the charity sector is not well served by a lack of transparency over senior executive salaries, nor by excessive levels of remuneration, where such may exist.

In recent weeks we have heard a series of disturbing allegations about the use of charitable donations by various organisations. The details of these have been the subject of considerable

examination by others in this House, and by committees of this House, and I do not propose to revisit them this evening. In so far as my responsibilities as Minister for Justice and Equality extend, I have given detailed consideration to the question of the appropriate use of donated funds by charities. In June 2011, responsibility for the operation of the charitable lotteries scheme was transferred from the Department of Public Expenditure and Reform to the Department of Justice and Equality. I wish to say at the outset that there are two cases currently before the High Court with regard to the charitable lotteries scheme, and that I do not wish to say anything this evening that would create any difficulty for the judges of the High Court in determining these matters or that could be deemed to prejudice the outcome of the proceedings. However, as Minister, I have a responsibility to notify this House about these matters that are, in the context of the court proceedings, already in the public domain and matters that have recently been discussed at the Oireachtas Joint Committee on Justice, Defence and Equality and are directly related to the question of the transparent use of donated funds by charities. It is in that context that I wish to make the following limited comments about the charitable lotteries scheme.

The scheme was established in 1997 in response to claims by a number of charities that their ability to raise funds had been severely curtailed by the introduction of the national lottery in 1987. Under the terms of the scheme, funds are paid out to eligible charities that have been operating a fund-raising lottery since at least 1997 in which products are sold that are similar to products sold by the national lottery. The total amount paid out in any one year is determined as part of the budget allocation and was, at its highest, €8.618 million in 2009 and 2010 and, at its lowest, €4 million in 2013. Eligible charities must apply each year for funding under the scheme, and the total available funding each year is divided among the successful applicant charities. The allocation of funding under the scheme is by reference to gross sales of qualifying products averaged over three years, and it is a requirement of the scheme that all funding paid out under the scheme must be used for charitable purposes only.

However, in relation to lottery fund-raising operated by a charity receiving funding from the scheme, there is no requirement for such a lottery to be operated efficiently, or indeed at a profit. There is no incentive for such charities to keep the operating costs of such lotteries down. In fact, the charitable lotteries scheme incentivises charities to leverage public funds, payable under the scheme, by maximising their gross ticket sales with no regard to either operating costs or how much of the money raised by ticket sales is, in fact, used for charitable purposes. Under this scheme, since 1997, successive Governments have paid out a total of more than €120 million in national lottery surplus funding and taxpayers' money to a group of charities that operate fund-raising lotteries.

On assuming responsibility for the operation of the scheme, I immediately undertook a review of payments being made, the manner in which the scheme operated and the nature of fund-raising activities that were being supplemented by the State under the scheme. I became very concerned that the fund-raising activities of some of the organisations that benefit from the charitable lotteries scheme operated at very low profit margins and that the operation of the scheme incentivised inefficient fund-raising practices that could be used as a means to leverage Government funding under the scheme. The focus on the number of tickets sold, rather than profitable fund-raising, ensures additional funding from Government for the charity concerned. Accordingly, I took steps to reduce Government support for inefficient methods of charity fund-raising through the gradual phasing out of the costly and inefficient charitable lotteries scheme. My decision to phase out the scheme was based on the budgetary exigencies of the period and the fact that the scheme is an inefficient and uneconomic use of the State's resources for the following reasons: it encourages inefficient fund-raising practices and high administration costs; it creates an incentive to run a charitable lottery at a low profit margin or at a loss; it has resulted in low proportions of profits reaching designated charities; and it was unfair to the donors that such a low proportion of moneys donated were being used for charitable purposes and that the scheme had essentially evolved into a mechanism for obtaining taxpayers' and national lottery surplus funds.

Many of the lotteries whose organisations benefit from the charitable lotteries scheme operate at very low profit margins. The proportion of profits generated that flows to the charitable cause for which the lottery products are sold is very low. For example, in the case of Rehab, which received approximately two thirds of the total available fund each year, the proportion of the face value of a Rehab Lotteries Limited instant win scratch card that was retained for the benefit of the charitable organisation averaged around 1%, and the average was around 15% for draw lotteries over the period 2008 to 2010.

In May 2012 an audit was carried out by the Department of Justice and Equality on the charitable lotteries scheme funds received by Rehab for the two-year period from 1 January 2010 to 31 December 2011. It was found that in 2010 the costs of generating the lottery sales in Rehab represented a significant percentage of overall sales revenue, leading to a low profit margin. For example, bingo sales of €3,190,000 in this period yielded profits of only €548,000, while scratch card sales of €3,969,000 yielded profits of only €9,452. In summary, 2010 figures supplied by Rehab Lotteries Limited show its gross lottery sales of almost €7.2 million yielded a net profit of €558,000 or 8%.

In November 2011, I met with Rehab and queried the size of the profits accruing from the scratch card product of the Rehab lottery, noting that it generated a profit of only €9,452 based on product sales of close to €4 million. I noted that the profit ratio seemed disproportionate and expressed concern at the approach being taken to public fund-raising. I made it clear I was considering issues relating to the scheme. Further work was subsequently undertaken on the matter within my Department.

In October 2012 I wrote to all beneficiaries of the scheme advising them of my intention to wind down the scheme gradually over a period of three years, beginning in 2013. I emphasised to them that the gradual withdrawal of funding was intended to give them an opportunity to review their fund-raising practices where necessary to ensure their profitability. It is important to charities and their donors alike that fund-raising efforts are run in a businesslike and efficient manner and that the maximum possible proportion of funds raised is used to support charitable activities. My objective in phasing out the charitable lotteries scheme is to wind down a scheme that I believe is no longer fit for purpose.

I understand that at a meeting of the Joint Committee on Justice, Defence and Equality held on 9October 2013, the CEO of Rehab referred to the winding down of the scheme as a "shocking decision" by Government. I hope after this evening my approach to the scheme is now better understood. The planned reduction in payments first took effect at the end of last year. Funding was to be reduced each year according to the following plan: it was maintained at €6 million in 2012 across the scheme, followed by a reduction to €4 million in 2013, €2 million in 2014, €1 million in 2015 and nil in 2016. The scheme would then cease to operate. My decision to phase out the scheme is currently the subject of judicial review proceedings brought by the Rehab Group and Rehab Lotteries Limited. The judicial review hearing took place on 24, 25and 26July 2013 and judgment of the High Court in this matter is awaited.

In the meantime, the Rehab Group and Rehab Lotteries Limited have chosen to embark on separate litigation against the State under competition law, claiming damages of up to €1.5 billion in connection with the operation of the national lottery. Whatever the outcome of this costly action, it is likely to exert a significant burden on either public resources, charity resources or both. That seems to me unfortunate at a time when both public and charity resources are under such extreme pressure to meet the front-line needs of our citizens as we work together towards recovery. As I have said, while I do not wish to make a comment that may in any way prejudice the outcome of proceedings that are before the courts, it is important that, as Minister, I take this opportunity to brief the House in so far as it is appropriate for me to do in the context of a debate about governance of charities and use of donated funds.

I wish to emphasise that, in explaining the areas of my concern, I do not want in any way to detract from the excellent service Rehab provides to its service-users nor do I want to undermine or denigrate the work of dedicated Rehab staff engaged in the provision of those services. My essential concern is to ensure Rehab, as well as the other charities which have benefited from this scheme, operates efficiently in the raising of public funds, and that a substantial portion of funds raised are used for the charity’s objectives and on those who rely on its services.

It is the Government's focus to work towards implementing the Charities Act as it stands. To embark on a process of amending this legislation at this time would be an unnecessary distraction from the work in hand. The Act provides for a full review of its operation five years after the establishment of the Charities Regulatory Authority. That review will allow for a proper, considered and consultative process to determine whether there are ways in which the Act needs to be improved.

We do not at present envisage amending the Charities Act. The Government does not support the amendment in section 2 of this Private Members’ Bill to include the advancement of human rights in the list of purposes that are of benefit to the community. This is not due to any lack of recognition of the vital role of human rights organisations in our communities, both here and worldwide. Rather, it is in light of the importance of ensuring the new system of regulation of charities is appropriately aligned with the system of charitable tax exemption long operated by the Revenue Commissioners. Under this system, the Revenue Commissioners recognise the advancement of human rights as a charitable purpose only in the case of a human rights charity that has consultative status with the United Nations.

Under section 40 of the Charities Act, organisations holding a charity reference number denoting they hold a charitable tax exemption number from the Revenue Commissioners will be automatically placed on the register of charities by the new authority. It is, therefore, important the two systems are aligned. It is important to recall the Charities Act was consciously framed so as not to negatively impact on any organisation that currently enjoys charitable status with the Revenue Commissioners. Accordingly, under the circumstances, I consider the amendment is not necessary, as human rights organisations that already have charitable tax exemptions will be automatically registered as charities under section 40. The provisions in section 3 of the Charities Act provide for the extension of charitable status to organisations with purposes not specified in the Act. This is an issue that could be considered in the context of the aforementioned five-year review.

The Government does not support section 3. I have already set out our plans for the charities regulatory authority to be staffed to an interim level by the end of February and to have its board appointed by Easter. Following that, it will work in a preparatory mode for some time to enable it to develop the register of charities for publication, as well as putting in place such other administrative policies and procedures as are required for its operation. The Commissioners of Charitable Donations and Bequests for Ireland will be dissolved on the formal establishment of the new authority and their functions transferred to it. Once the necessary arrangements are in place, the authority will be formally established by ministerial order and the register of charities published. Subject to the necessary arrangements being in place, this will be before the end of 2014. In light of this, the Government does not support the proposed amendment nor the proposed Bill.

I reiterate how important it is that trust and confidence in our charity sector is restored. The new system of charities regulation, provided for in the Charities Act, will be an important part of this. Critical also is clear leadership from the charity sector itself. Our foremost charities must lead by example and demonstrate through their own actions that there is no place in Ireland's charity sector for poor governance or lack of transparency. In light of recent events, the public's demand to know what becomes of its charitable donations seems entirely reasonable. It is a demand I support that can only be met by the charities themselves. I call on them to do so.

9:30 pm

Photo of Derek KeatingDerek Keating (Dublin Mid West, Fine Gael)
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I welcome the Minister’s contribution to this Private Members’ Bill.

Given the crisis the charity sector finds itself in, I have written to the Taoiseach to ask the Government to consider a once-off grant, by way of an ex gratia payment of €740,000 to the Friends and Supporters of the Central Remedial Clinic as an expression of the Government’s goodwill to the clinic’s front-line workers who are devastated by the exposés over the past several weeks.

There may be other charities engaged in sharp practice or maybe even fraudulent activities when it comes to charitable funding and fund-raising. It was recently reported, and confirmed by its board, that the chief executive officer of Our Lady’s Hospice in Harold’s Cross, Dublin, is in receipt of a top-up allowance because he leads charitable activity there as the fund-raising department comes under his remit. Is this good corporate governance? Are there other aspects of Our Lady’s Hospice which are so far undisclosed? I was shocked to learn that, while it receives much support and donations from families of patients, particularly those who have been bereaved, it has a particular deposit account which realises €2 million. The 2012 annual report showed €7,000 in net current assets. Are there other deposit accounts? What is the source of funding for such accounts?

I welcome the Minister’s decision to establish a charities regulatory authority which will be put in place as soon as possible.

Photo of Tom BarryTom Barry (Cork East, Fine Gael)
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I welcome the opportunity to speak on this Private Members’ Bill. The time allocated makes one feel like one is trying to deliver a Gettysburg address on this important topic.

A charities regulator is needed and I welcome the Minister’s announcement in this regard. We need effective oversight, sanctions and transparency in this sector. If these three elements can be married together, we will certainly be moving in the right direction. I compliment the Committee of Public Accounts on its sterling work in this area to date and wish it well in the future. I hope well known high-profile individuals who, in my opinion, abused their position of trust when they took out full-page newspaper advertisements to scaremonger and defeat the referendum to extend the powers of Oireachtas committees will reflect on their inappropriate actions and their consequences. People want, expect and deserve answers about the banking crisis and the demoralising behaviour regarding charities. In the case of the latter, it is unacceptable that generous people have been deceived in such a manner.

I fail to see the need for enormous salaries for chief executives of charities. Charities need to be looked at critically to ensure the primary beneficiaries of charities and donations to them are not the charities themselves. Transparency is key in this area. As we have been for the past several years, we need to tidy up one more aspect of poor governance, a problem that has dogged this country for far too long.

Photo of Patrick O'DonovanPatrick O'Donovan (Limerick, Fine Gael)
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I welcome the opportunity to speak on this Private Members’ Bill. The Minister for Justice and Equality pointed out there is much more work to be done in the charities regulatory area. While some Members attended the justice committee to describe their shock at the Minister’s decision to wind down a particular aspect of lottery funding, some of the figures revealed here this evening on the low net profit margins of some of these schemes pose questions of which the Oireachtas has a duty to get to the bottom. I agree with the calls for an examination of the use of these schemes since 1997, since that in itself leaves many unanswered questions.

Charities across the country will be distressed by what has happened in their sector over the past several days. When one sees individuals before an Oireachtas inquiry giving evidence that falls between the-dog-ate-my-homework excuse and that which was given by a certain individual in Dublin Castle once upon a time when he tried to convince the country he found money in a suitcase which he then carted around O’Connell Street, is it any wonder people thought they would get away with it? The damage will have to be repaired and confidence in the sector restored. I have raised the issue of governance in this sector on a Topical Issue Matters before. How do people become board members of these charities? Who elects the boards? Who appoints their chief executive officers? Where are the public interest directors and ministerial nominees to these boards? These will all have to be fleshed out. When it comes to annual reports, Deputy Colreavy earlier asked where are the auditors in all of this. There are so many intricacies in this unseemly mess, which I hope will be shortlived, that the big losers in all of this will be the charities and their service-users. Ultimately, the big losers in this should really be those being paid multiples of the Taoiseach’s salary.

The days of a person sending someone out with a bucket to collect a bonus to top up a salary of €368,000 or €370,000 must stop. While the Bill has some good aspects, the earlier comments made by the Minister for Justice and Equality certainly must be fleshed out to a greater extent. I urge him and his Government colleagues to empower the relevant Oireachtas committee to consider this issue in greater detail.

9:40 pm

Photo of Paul ConnaughtonPaul Connaughton (Galway East, Fine Gael)
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I thank the Leas-Cheann Comhairle for giving me the opportunity to speak on this issue, even for a short time.

I welcome the Bill and even though I may not be able to support it, it certainly is in the right area. While I greatly welcome the Minister's statement that there will be a regulator with a proper department, the biggest problem in this regard brings us back to a point made by Deputy Tom Barry on the need to ensure such a department will be properly resourced and given the powers to do its job. One of the most serious problems is the lack of accountability. It appears to be everyone's fault and no one's fault at the same time. People are being given a rap on their hands, but no one appears to be held responsible.

In many ways, the scandal at the Central Remedial Clinic, CRC, was almost like Christmas-time again for politicians, as they can jump up and down, wave their hands and be appalled and dismayed. While this happens in so many other scandals, ultimately, the real problem is whether anyone is ever held responsible for any of these actions. In this case, people want to see action more than words. While I acknowledge what Deputy Derek Keating was trying to say about getting the money back to the CRC, I would rather see it returned as the former chief executive officer is not entitled to it. Speaking as a member of the Committee of Public Accounts, when asked about his lump sum payment, he gave a figure of €200,000, although he knew that another €500,000 had been included in the payment. Instead of appearing before the Committee of Public Accounts and being wrapped on the knuckles, he must pay it back. I acknowledge that the HSE has stated it may consider doing so.

There is a wider issue with regard to pay gaps in the public sector. This all emerged from the making of a top-up payment which now has unravelled into something much bigger. Moreover, as Deputy Michael Colreavy stated, this may not be the end of the matter either and perhaps there is a great deal more to it. We must arrive at a position where when a pay cap is imposed in the public sector, in particular, it is adhered to. Perhaps this is something on which the Government has not been overly strong heretofore and I hope it is something that can change now. Members should be under no illusions - what has happened at the CRC has done tremendous damage to the charity sector. I spoke to people over the weekend who will not give to that charity again because they believe the money went straight into the back pocket of a man who simply did not deserve it.

Photo of Niall CollinsNiall Collins (Limerick, Fianna Fail)
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I am sharing time with Deputy Éamon Ó Cuív.

I welcome the opportunity to speak on this timely Bill which has spurred the Government into action on an important issue. Across the country thousands of volunteers give selflessly of their time and efforts to fund-raise for a worthy cause. Regardless of whether it is a marathon run or a head shave, the Irish people have a remarkable spirit of generosity that sustains the charity sector. Even in the difficult economic period through which they have suffered in recent years, ordinary people have been willing to give whatever they can to help a good cause. Their immense commitment to helping others through whatever means they have available is testament to the strength of Irish society. The revelations of grossly inflated pay levels and lump sums at the CRC are all the more dispiriting against the backdrop of ordinary people's generosity. The litany of unwarranted payments deeply shook the confidence of the volunteer army that sustains the charity sector. There is something rotten in the culture of a body that allows such greed to fester and grow. The issue cannot be allowed to slip into petty political point-scoring, as it is much more important than that. Members must move to address the fundamental problems with the corporate governance of these bodies. A failure to confront these issues will undermine fatally the confidence of the public in the good work that they do. This will devastate the capacity of the sector to undertake the vital fund-raising that keeps them going.

It is important that not all bodies are tarred with the same brush. I recognise the charity sector has taken individual steps towards enhancing corporate governance. The steps taken by the Minister, Deputy Alan Shatter, towards initiating the 2009 Act mark something for which the industry has been calling actively since it was passed by the Oireachtas. It is not true, as has been stated, that the Minister has done nothing in this regard since taking office. I raised this issue with the Taoiseach on the Order of Business on 18 December last and the Minister replied to me in the positive to the effect that consultation had taken place and that sections 1, 2, 4, 5, 10 and 90 had already been commenced. A number of charities have voluntarily submitted themselves to the standards laid out in the British legislation and furthering the introduction of a regulator here will ensure this will become legal practice in Ireland.

When Fianna Fáil passed the Charities Act in 2009, it represented a milestone in the development of the regulation of the sector. Its aims are all the more important now, in the light of the shocking information on the activities of the CRC. The purpose of the Charities Act is to reform charities law to ensure greater accountability, protect against abuse of charitable status and enhance public trust and confidence in charities, with increased transparency in the sector. Key aspects of the Act provide for a definition of "charitable purposes" for the first time in primary legislation. It also provides for the creation of a new Charities Regulatory Authority to secure compliance by charities with their legal obligations and encourage better administration of charities. In addition, it provides for a register of charities, in which all charities operating in the State must register, and the submission of annual activity reports by charities to the new authority. It updates the law relating to fund-raising, particularly in respect of collections by way of direct debits and similar non-cash methods, as well as providing for the creation of a charity appeals tribunal and the provision of consultative panels to assist the authority in its work and ensure effective consultation with stakeholders. This marks a key moment in the transformation of how charities are regulated in Ireland. It also recognises the dramatic development of the sector and the scale of the work it does across innumerable spheres of Irish life, both at home and abroad. Putting it on a sound legislative basis will sustain the sector in the coming decades as it grows and evolves alongside the challenges it confronts. The Act will also enable volunteers and members of the public and ensure their hard-earned money will be spent in the most effective manner and not siphoned off or wasted due to grossly inadequate governance.

The initiation of the Act will have a significant impact on the internal workings of the sector. Members must ensure they are adequately prepared to deal with the new raft of paperwork they will be expected to process. One does not wish for a situation where honest charities doing good work in the community will suffer unduly owing to the regulatory burden. Red tape should not be allowed to strangle the work of the sector. A number of aspects of the Act are worth dealing with individually and teasing out as the charity regulator gets going. All charities registered with the regulator will be obliged to submit an annual activity report. The Minister should move further to consult the sector before deciding on what will be required of charities in this annual report. This will be a useful mechanism to outline the level of work done by each charity and as a comparison between bodies. Most charities already submit financial accounts, but the format and process by which this is done will depend on how its organisation is set up legally. This will be a vital part of securing public trust in the system and setting up a clear line of accountability for the expenditure of charitable moneys. Transforming how charities operate and establishing clear new lines of accountability will boost the strength of charities. Essentially, the Act enshrines the principle of openness that many charities already have embraced fully.

Implementation of the Act ran into the strong headwinds of the economic downturn. The Government has consistently cited costs as an impediment to the establishment of the body. The charities regulator in Northern Ireland costs an estimated £800,000 per annum. I understand charities will be expected to pay an annual registration fee to fund the new regulator. The annual fee will range from between €75 and €500, depending on the scale of the charity involved. This also will leave a significant gap to be bridged by the taxpayer to fund the 20 staff strong body. What level of Exchequer funding subvention will be provided to assist in the creation and ongoing running costs of the body? Has the Minister specified the costs involved with the new regulator and its funding mechanisms?

Recent events have underlined the importance in the long term of underpinning public trust in the charity sector. The financial pressure being felt by the sector has compounded its need for reliable fund-raising to be undertaken. Transparency, accountability and regulation are absolutely integral parts of the long-term sustainability of any organisation. The vital role public trust plays in driving on the charity sector makes it all the more important in that sector. The new regulator will require a robust and committed board to fulfil its mandate. This means drawing from personnel who blend experience of the charity sector with an appreciation of the needs of the public. The appointment process cannot be allowed, as have so many others under the current Administration, to be dominated by cronyism, with political hacks stuffing the ranks. The open public appointment process must be more than a mere fig leaf thrown in the direction of transparency. A regulator set up to promote transparency must itself be transparent. The regulator must be beyond reproach to achieve the objective of restoring public trust which has been battered by the debacle at the CRC.

The open and transparent process should be started as soon as possible to put the body on a solid footing and enable it to pursue its objectives straight away. We should not let the actions of a negligent board and the cynical acts of a few cast a dark shadow on the bright story of charity work in Ireland.

Full implementation of the Charities Act 2009 will represent a decisive step in recognising the central part good governance has in the running of a burgeoning sector. It gives a strong legal basis for the spirit of transparency that must underpin the entire area. Members must draw from the shocking lessons of the CRC scandal that has enraged so many people across the country. Full implementation of the Act sends a strong and unmistakable message that good governance is the standard operational procedure for the parties involved. I look forward to the swift enactment of the provisions of the 2009 Act, both the letter and spirit, to assure those volunteers and ordinary people across the country that their efforts are not wasted.

9:50 pm

Photo of Éamon Ó CuívÉamon Ó Cuív (Galway West, Fianna Fail)
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Cuireann sé áthas orm deis a bheith agam cúpla focal a rá maidir leis an gconspóid atá ar bun faoi chúrsaí carthanachta sa tír. I dtosach báire, is údar díomá dom é nach bhfuil an rialaitheoir a bhí ceaptha a bheith ann againn fós. Ní thuigim, ainneoin an méid atá ráite ag an Aire san óráid a thug sé tráthnóna inniu, cén mhoill atá ann ag cur an rialaitheoir sin in áit. I find the convoluted explanation as to why we have no charities regulator in place to be a very typical case of penny wise and pound foolish. When this legislation was going through the Dáil, all sides of the Dáil agreed that we needed charities regulation, that this is a massive sector.

Photo of Alan ShatterAlan Shatter (Dublin South, Fine Gael)
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For two years Fianna Fáil did nothing in government to implement it.

Photo of Éamon Ó CuívÉamon Ó Cuív (Galway West, Fianna Fail)
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When I was in that Department we worked constantly on it and we brought through the charities legislation in my time in the Department.

Photo of Alan ShatterAlan Shatter (Dublin South, Fine Gael)
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Nothing happened between 2009 and 2011.

Photo of Éamon Ó CuívÉamon Ó Cuív (Galway West, Fianna Fail)
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The Minister has been three years in government and it is wearing a little thin that he is trying to excuse all his delays with what we did. We brought in the Act. We enacted it in my time in the Department. The issue now is why we waited three years to have the regulator put in place and how the Minister could believe that we did not need a regulator. He was looking to see if we could avoid having a regulator. It is extraordinary. By not moving to put the regulator in place properly to regulate the sector, the Minister has deterred ordinary people from putting money the way of charities since this controversy broke. The cost of the regulator to the taxpayer would have been very small compared to the loss of income to genuine charities who are working genuinely for the good of people.

There seems to be a belief that all charities in this State are mega organisations like the ones around which this controversy has grown. Most charities are driven by ordinary people. We must have a situation where ordinary people can serve on boards. We must not deter all the ordinary people from serving on boards because they do not have legal or accounting proficiency. They bring other skills to boards. Some charitable organisations get some subvention from the State, some are nearly totally dependent on State support and others get no money from the State and are totally depending on raising money in other ways. The vast majority of employees of charitable organisations are not on high salaries, are probably earning less money than they would in the private sector doing the same job with the same responsibilities, and in many cases they work very long hours and are passionately dedicated to the work they are doing. There are a few bad apples in the barrel and we must be very responsible and careful in this House not to destroy the people's general trust in the charities that they support which, in the main, give very good value for money to this State.

The Minister could do nothing about what happened before his time but much of the controversy of the last few months could have been minimised had he introduced the charities regulator and brought in proper change. Had he done so, we could have stood up and said that was then and this is now, and that if people give money this Christmas it is not being given under the ancien régime but under a new regime with a proper regulator who is accounting for the money under an Act we brought in as Members of this Oireachtas. I welcome the Minister's belated conversion to introducing a charities regulator. I hope he does it swiftly and that by the end of this year we will be able to say we have a properly regulated charities sector in this country. It will not eliminate all risk of cheating. Nothing ever will. No law or regulation will ever do that, but it will make it much less likely and make for much higher standards, greater transparency and greater certainty than in the past.

Photo of Thomas PringleThomas Pringle (Donegal South West, Independent)
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I welcome the opportunity to contribute to tonight's debate. Everyone in the country watched last week with growing horror and anger at the performance at the Committee of Public Accounts of the CRC directors and the disgraceful actions they carried out in providing for the pension of their former CEO. In the drip feed of information about the cost of the pay off, many wondered why they had contributed their hard earned money to charities at all. The anger increased when people realised there is comprehensive charities legislation on the Statute Book which is not being implemented. The reason a charities regulator has not been established is the cost.

What has been the cost of the scandal played out in our committees over the last number of weeks? According to a recent survey 53% of charities have suffered a drop in fund-raising, 97% believe public trust has been lost and 54% believe that damage could be permanent, all because of the cost of establishing a regulator. The full implementation of the Charities Act might not have prevented the actions of the CRC board in treating the donations of their many families and supporters as a slush fund to be used for their own benefit. However, it would have placed them under the scrutiny of a regulator and could have been a deterrent to prevent them from acting in this way. They have done untold damage to the good work being done by all charities in Irish society and have made their work more difficult.

The actions of the board of the CRC will cost taxpayers much more because the State will have to pick up the slack caused by the drop off in donations. The failure to establish a regulator will probably end up costing more than it would have had it been up and running three years ago. This State abdicates so much of its responsibility to the charity sector and we should debate that in this House another day. Now we will end up carrying the cost of this inaction. The many families who feel obligated to fund-raise for the charities whose good work their children have benefited from feel very let down by the inaction of this State and the actions of the CRC.

Photo of Maureen O'SullivanMaureen O'Sullivan (Dublin Central, Independent)
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When James Joyce offered his book Dubliners to his London publishers, he drew attention to the "special odour of corruption" that floats over his stories. He said, "It is not my fault that the odour of ash pits and old weeds and offal hangs round my stories." While we are not assailed by the odours of offal and ash pits, we are assailed by the far more odious, offensive and pervasive odour of greed, selfishness and corruption at the heart of what we are discussing tonight and tomorrow night. In the Dáil recently we have examined abuses including the residential institutions, the Magdalen laundries and the ladies who suffered the ordeal of symphysiotomy. One thinks one has reached the end of it, that there could not be any more horror stories. Then we come to this particular horror story and see the abuse of the people who were using the services and of the generosity of the Irish people.

This scandal at the CRC has done untold damage to charities and charitable organisations in this country. People with special needs, both mental and physical, our elderly, our schoolchildren and the homeless should not have to rely on charity and fund-raising in order to address their needs, but that is what must happen. They need fund-raising services due to a lack of commitment on the part of successive governments to adequately address the needs of those sections of society.

When we look at the composition of the CRC boards, we cannot help but wonder at it. It is almost like a Who's Whoof members of the Fianna Fáil party. We cannot help also but come to the conclusion that the CRC and other institutions, like the Mater hospital, allowed themselves to be used as a thank you for those who served Fianna Fáil in the past. This must be a source of embarrassment for current members of the party. It is unfortunate that this system of rewards for members of political parties continues in this Dáil. I fear that when other charitable organisations are examined, more of what we have seen in the CRC will come to light.

I have a question with regard to the work of the charity regulation section of the Nenagh office of the Revenue Commissioners. For the past 40 years I have been on the voluntary board of a number of small charities and organisations and am aware of the amount of paperwork and rules and regulations we must go through in order to get charitable status and of the extent of professional fees these organisations must pay. There is governance of the small charities, but where was that governance in the case of the larger charities?

I support the coming into operation of the Charities Act and the establishment of a charities regulator, who will, I hope, put the best interests of those he serves at the heart of his work.

Debate adjourned.

The Dáil adjourned at 9.35 p.m. until 9.30 a.m. on Wednesday, 22 January 2014.