Kathleen Lynch (Cork North Central, Labour) | Oireachtas source

I have also found when I listen to debates here that it prompts me to come up with solutions. In that context, I have been considering a few things. I am here in the absence of the Minister for Justice and Equality, Deputy Alan Shatter, who, unfortunately, cannot be present and has asked me to convey his apologies to the House.

As previous speakers stated, charitable organisations play a vital role in our society. There is probably no aspect of Irish society that is not enriched by the involvement of charities and the tireless efforts of those who work and volunteer on their behalf.

From the largest international charities working in developing countries around the world to the smallest community group where everyone knows each other, the spirit of charitable work and charitable giving is evident and worthy of support.

The Charities Act, enacted in 2009, was underpinned by an understanding of the vital role played by charities and a desire to support them in their work. A fundamental objective of the Act is to enhance public trust and confidence in charities and increase transparency in the sector. Given that many charities receive a portion of their income from public donations, the issue of public trust is of crucial importance to them. The provisions of the Act are intended to ensure greater accountability and protect against abuse of charitable status and fraud. In this way, the trust placed by members of the public in the charities they support can be protected. When Ireland is assessed on the basis of international comparisons, it is invariably shown, as Senator Feargal Quinn observed, that Irish people contribute more per head than their counterparts in other countries.

Since the enactment of the legislation, five sections of the Act have been fully commenced and a sixth partially commenced. This has been done by way of two separate commencement orders, namely, SI 284 of 2009 and SI 315 of 2010. These orders were primarily technical in nature, with their substantive provisions relating to regulation of the sale of mass cards and the allocation of powers to the courts to grant relief to charity trustees from personal liability for breach of trust in certain circumstances. The key provisions of the Act, to put in place a new regulatory framework for the charitable sector, have yet to be commenced. These provisions are linked to the establishment of a new independent charities regulatory authority, as provided for the under the Act. Because the legislation vests the powers to regulate charities in the new authority, it is not possible to commence further sections of the Act until that authority is set up.

The Minister for Justice and Equality assumed responsibility for policy relating to the regulation of charities in May of last year, following the reorganisation of Departments. Shortly thereafter, in the context of the urgent need to reduce Government spending and restore stability to the public finances in line with the EU-IMF programme, all Departments conducted a comprehensive review of expenditure aimed at identifying areas where savings could be achieved. In this context, the establishment of a charities regulatory authority was deferred, with the Minister for Justice and Equality undertaking to examine how progress might be made towards the objectives of the Charities Act in light of the changed circumstances since its passage.

As the Minister made clear at the time the deferral was announced last November, the decision to defer the full implementation of the Charities Act was taken for budgetary reasons. It did not indicate a change in Government policy with regard to the fundamental objectives of the legislation, including the desire to provide for better regulation of charitable organisations. In light of this, the Department of Justice and Equality is examining how the objectives of the Act can be progressed in the current circumstances. The charities sector is engaging with the Minister to find a resolution to this difficulty. The Minister intends to continue this consultation process in the coming months and looks forward to the informed engagement of the Seanad as part of that. It is rarely a quick or simple matter to go from the passage of legislation establishing a new statutory agency to the point where that body is fully established and exercising its functions in line with its parent legislation. Nevertheless, it was not envisaged that there would be such a lengthy delay in the establishment of the charities regulator. The Minister accepts that this is a source of concern to many in the charities sector and shares their eagerness to see the matter progressed in line with available resources.

It is important to remind the House that not everything depends on having a dedicated charities regulator. In fact, there is already a broad range of regulatory oversight measures that can apply to charities. Many, for example, are already subject to scrutiny by various State bodies. Moreover, large numbers of charities receive significant levels of Government funding through grants, contracts for service delivery and so on. As such, they are subject to the oversight of the relevant grant-making or contracting Departments and agencies in regard to how they use and account for these public funds and, where appropriate, to the Office of the Comptroller and Auditor General. The Revenue Commissioners have granted charitable tax exemptions to almost 8,000 charities and have significant powers to ensure they are compliant with tax law. A full list of these charities is available to the public at revenue.ie.

Many charities are companies limited by guarantee and, as such, are also subject to the provisions of company law and are generally required to provide certain information to the Companies Registration Office under the Companies Acts. This information can then be accessed by the public. Such charities are also potentially subject to scrutiny by the Office of the Director of Corporate Enforcement. Charities that take the form of a trust are subject to the provisions of trust law. In addition, any business entity is subject to general criminal and fraud legislation.

In common with the Members who have put forward this motion today, I look forward to the full implementation of the Charities Act and the dedicated regulatory framework it will provide. However, it is important to recognise, as I have outlined, that the charities sector is at present far from unregulated. To suggest otherwise would be misleading and would fail to acknowledge the value of the effort invested by many charities in meeting existing regulatory obligations. The motion before the House this evening not only points to the benefits of statutory regulation of charities of the type provided for in the Charities Act but also recognises the role and responsibility of charitable organisations themselves in enhancing the transparency and accountability of their sector. Voluntary, sector-driven approaches to better practice are an essential part of a strong and accountable charity sector. Statutory regulation is a complement to this, not an alternative. As progress is made on the implementation of the Charities Act, the Government hopes to see a continued drive from within the charities sector itself for improvements in transparency and accountability where necessary.

The motion refers to levels of remuneration and administrative costs, an issue that is of genuine concern for many people who make donations to charities. Greater transparency in this regard has real potential to incentivise best practice among charities and, in so doing, enhance the public's trust in them. Fund-raising is another area in which sector-driven efforts to encourage best practice can play an important part, and the Government continues to support certain initiatives in this area. These include the promotion of a statement of guiding principles for charitable fund-raising which were developed by the charities sector itself under the leadership of the voluntary charity umbrella body, the Irish Charities Tax Research Group. These guiding principles, at the core of which are respect, honesty and openness, aim to provide a set of agreed and accessible standards for charitable fund-raising strategies and projects. The Department of Justice and Equality is providing grant support for this initiative. The Minister has encouraged all charities to sign up and adhere to these principles, which represent a simple yet demonstrable commitment on the part of charities to better accountability and transparency. To date, however, only modest numbers of charities have formally signed up to the principles, which were launched in March 2011. The Department continues to support this initiative with the aim of increasing the share of fund-raising which conforms to the principles. However, such an initiative requires the support and participation of charities themselves in order tobe meaningful and the Minister urges all charities that carry out fund-raising to sign up. Organisations wishing to find out more should visit ictr.ie.

As I outlined, the deferral of the establishment of a charities regulatory authority is a budgetary and not a policy matter. I assure the House that the decision to defer statutory regulation was not taken lightly. Despite the changed circumstances with respect to the public finances and the wider economy, it remains Government policy that the relevant legislation will be fully commenced and a charities regulatory authority established in due course and in such a way as available resources permit. During 2012, therefore, the Department of Justice and Equality has kept the decision to defer under review in the context of resource allocations, and has examined ways of making progress towards the objectives of the Charities Act.

This process is ongoing and the Minister for Justice and Equality intends to consult on options in the coming months. The charities sector is vibrant, diverse, innovative and enriched by the goodwill and confidence of its members and of the public at large. It is in all our interests to keep it so. The Government is determined to work to this goal in partnership with the charities sector. I commend the motion to the House.