Joe O'Brien (Dublin Fingal, Green Party) | Oireachtas source

I thank the Chairman and the committee members for the invitation to attend to discuss the general scheme of the charities (amendment) Bill. I appreciate the flexibility they have shown in rescheduling today's session. I thank the Chair for his good wishes. I am joined by officials from my Department, including Bairbre Nic Aongusa, assistant secretary, Kevin Power, assistant principal, and Niamh Hoey, administrative officer.

This is important proposed legislation. The purpose of the proposed Bill is to strengthen the charities sector, ensuring greater transparency, clarity and fairness that will serve to enhance public confidence in the sector. The proposals contained seek to improve the operational capacity of the Charities Regulator to conduct its statutory functions, ensuring more proportionate regulation for the sector. Registered charities play an integral role in the provision of services to our communities. With more than 11,400 charities on the charities register, the work of the regulator is vitally important.

The Charities Regulator has made significant progress in recent years in enhancing compliance and enforcement measures.

This includes the introduction of the charities governance code and related supports; conducting statutory investigations into charities; and the publication of guidance in respect of topics such as safeguarding and fundraising.

There are a total of 32 heads in the general scheme. Heads 1 and 2 are standard provisions, while heads 3 to 32, inclusive, provide a number of amendments to the Charities Act 2009. The amendments proposed in heads 14 to 16, inclusive, and 31 have been developed from a number of previous amendments that were approved by the Government and included in the general scheme of the courts and civil law (miscellaneous provisions) Bill 2017. My officials have worked closely with the charities regulator in considering these amendments. My officials have also engaged counterparts across the Government to gain a greater appreciation and understanding of cross-sectoral impacts. Representations and feedback from the sector have also been incorporated into the general scheme.

The operational experience of the regulator since its establishment in October 2014 has resulted in a number of proposed amendments. There is a need for proportionate regulation and governance requirements for our charities. This Bill is a key step that needs to be implemented in order to allow for the appropriate regulation, particularly financial regulation, of the sector. I assure committee members that the issue of proportionality has been reviewed at length in the preparation of the general scheme. Fair and reflective regulation is the very basis for this Bill.

Almost 42% of all registered charities, those which are incorporated, do not currently have to submit an annual statement of accounts to the regulator. At the same time, we have existing financial thresholds for audit that are placing an unnecessary administrative burden on our smaller, mainly volunteer-led charities.

Among the actions in the proposed Bill are new financial thresholds that reflect the size and scale of a charity. This would not only afford the regulator more balanced and measured means for regulating the sector, but also lessen the administrative burden on these same smaller, mainly volunteer-led charities.

In May 2021, the charities regulator published new research findings on the views that charities have in the context of public trust and confidence in the charity sector among other things. It is clear from an initial review of the responses to the parts of the survey that there is considerable support for regulation generally and for the charities governance code among charity trustees, charity employees and other volunteers. The majority of those surveyed acknowledged the positive effect regulation is having on the sector and their individual charities.

Measures included in the general scheme will not only provide greater transparency for the public in relation to the finances of registered charities, but will also provide clearer guidance on the roles and responsibilities of trustees. It is important to highlight that these are not new or additional duties. They are a statement of the duties to which charity trustees are already subject under common law. By including them in statute, the regulator can raise awareness among trustees and achieve greater compliance by reference to the law.

The proposed Bill will also strengthen the powers of the regulator to intervene where no effective management or board oversight is available. Ultimately, these are all actions that will further enhance public trust and confidence in the sector. It is also proposed to update the definition of “education bodies”, providing for the removal of third level foundations from the definition. Third level institutions are entitled to register as charities, as are third level foundations. However, those third level foundations who obtain charitable status are not currently required to submit statements of accounts to the regulator. Furthermore, third level foundations do not come under the remit of the Office of the Comptroller and Auditor General either. This very issue was raised by the Committee on Public Accounts in November 2019.

The general scheme also includes a provision to provide greater defined clarity to those purposes that the charities regulator can consider as a charitable purpose. It is also proposed to add the advancement of human rights as a new category of charitable purpose in the proposed Bill. Human rights is a concept already recognised and defined on a statutory footing in Ireland, under the European Convention on Human Rights Act 2003 and the Irish Human Rights and Equality Commission Act 2014 respectively. However, Ireland is unusual among common law jurisdictions in not having the advancement of human rights defined as a charitable purpose.

This proposed Bill will ensure that our charities legislation is fit for purpose in order that the vital work of our charities can advance and flourish. I welcome the opportunity to discuss the general scheme of the Bill with the committee and to hear the views over the course of this process.