Debate contribution: Charities (Amendment) Bill: Second Stage

Debate contribution by Mr Andy Allen MBE on 23 June 2026.

MLA: Mr Andy Allen MBE
Party at the time: Ulster Unionist Party
Date: 23 June 2026
Type: Debate contribution
Business: Executive Committee Business
Heading: Charities (Amendment) Bill: Second Stage
Assembly identifier: Official Report component 5636775

Text

Before I begin, I declare an interest as a trustee of a charity. Through that role, I have seen at first hand the valuable work that charities carry out and the responsibilities that fall on trustees to ensure that organisations are properly governed. Every day, as Members have mentioned, Northern Ireland's charitable sector makes an enormous contribution to our society. Charities strengthen communities, provide opportunities and deliver services on which many individuals and families rely. Much of that work is carried out by dedicated volunteers and trustees, who give of their time freely and often without recognition. Any regulatory framework must protect beneficiaries and charitable assets, maintain public confidence in the sector and encourage people to continue to step forward to serve their communities. The Bill seeks to implement recommendations arising from the independent review of charity regulation. Overall, we believe that those are worthwhile objectives. As Members will know, the review made 93 recommendations, 18 of which are being taken forward through the Bill. Many of the recommendations sought to create a more proportionate and risk-based approach to regulation, whilst improving the relationship between the regulator and the sector. The Department has stated that the Bill seeks to make charity law clearer, fairer and more fit for purpose. In doing so, it aims to strengthen the Charity Commission's regulatory powers, streamline accounting and reporting requirements and remove legislative provisions that either have created uncertainty or are no longer required. Those are sensible objectives, and, in broad terms, they are objectives that we can support. Many of the proposals will bring Northern Ireland more closely into line with developments elsewhere in the United Kingdom. Public trust is one of the charitable sector's most important assets. Where there is misconduct or mismanagement, regulators must have appropriate powers available to them to intervene in order to protect beneficiaries and public confidence. We therefore understand the rationale behind the measures in the Bill. We also recognise the logic behind having provisions that are intended to prevent individuals from avoiding regulatory action simply by resigning before a decision can be made. Although we support the principles underpinning the legislation, several areas warrant careful scrutiny as the Bill progresses. One such area is the proposed official warning regime. We can see the value in having a proportionate tool available in cases in which having a full statutory inquiry may not be necessary or appropriate. Similar powers exist elsewhere in the UK. An official warning has the potential, however, to have significant reputational consequences for a charity and its trustees and to affect trust in the wider sector. Publication of a warning could affect public confidence, fundraising activity and relationships with funders and stakeholders. We note that stakeholders, including the Northern Ireland Council for Voluntary Action (NICVA), have expressed support in principle for the introduction of an official warning regime, whilst also highlighting the potential significant reputational consequences that the publication of a warning could have for a charity. That concern is understandable and further underlines the importance of ensuring that the power is exercised proportionately and with appropriate safeguards. Whilst the Bill contains safeguards, including prior notice and an opportunity to make representations, it is important that it is clearly understood how the powers will be used in practice. In particular, we would like to understand the circumstances in which the commission would normally publish a warning, and how it intends to distinguish between serious misconduct and matters that may be addressed more appropriately through guidance, advice, support or regulatory engagement. We note the expansion of the commission's powers to share information with bodies that exercise public or regulatory functions. Effective cooperation between regulators is important and can help to protect charitable assets and prevent wrongdoing. It will be important to understand how those powers will operate, which organisations may fall within their scope and what safeguards will be in place to ensure that information-sharing remains proportionate. Perhaps the most significant issue for scrutiny is the extent to which important operational detail is being transferred from primary legislation into regulations. The Bill gives the Department and, in some cases, the commission greater flexibility in relation to the accounting requirements, annual reporting arrangements, and the definition of "gross income". There are obvious advantages to having flexibility and allowing requirements to evolve. However, flexibility must be balanced with accountability. It was noted during pre-legislative Committee briefings by officials that regulations flowing from the provisions would be subject to draft affirmative procedure, and I ask the Minister to reaffirm that. That is a welcome safeguard, and it will ensure Assembly scrutiny of future changes. It will remain important, however, that charities are properly consulted before significant changes are introduced. The Bill seeks to reduce administrative burdens on smaller charities. Many organisations operate with limited resources, and depend heavily on volunteers. Measures that reduce unnecessary bureaucracy are welcome where they allow charities to focus more time and resources on supporting beneficiaries. The proposal to remove the requirement for an independent examination of accounts for charities with a gross annual income below £20,000 is one example of that. We note the broad support for that proposal across the sector, particularly given the difficulties that some smaller charities experience in securing independent examination and the cost that can arise from that. We understand the intentions behind the changes, particularly for charities with limited resources. Again, however, it is important that they strike the correct balance between reducing administrative burden and maintaining public confidence in the stewardship of charitable funds. We welcome the proposal to repeal section 167 of the Charities Act (Northern Ireland) 2008 relating to institutions that are established outside Northern Ireland. That matter was raised repeatedly by a number of affected charities during Committee engagement in the previous mandate. We understand that section 167 was never commenced, and such organisations will continue to be regulated in their home jurisdictions. Nevertheless, it would be useful to know how concerns relating to such organisations, should they arise, would be addressed and how cooperation between regulators would operate should issues arise. We note the extension of automatic disqualification provisions, which seems to intend to bring Northern Ireland into line with arrangements that are operating elsewhere in the United Kingdom. The proposed protection powers available during a statutory inquiry are understandable in principle where there is evidence of misconduct or mismanagement. I have no doubt, however, that the Committee will wish to satisfy itself that appropriate safeguards and oversight accompany the use of those powers. Overall, the Bill contains a number of sensible and potentially beneficial reforms. It seeks to strengthen public confidence in charity regulation, provide the Charity Commission with proportionate enforcement tools and reduce unnecessary burdens on smaller charities. The challenge for the Assembly will be to ensure that we strike the right balance between effective regulation and proportionality, between accountability and fairness and between protecting public confidence and supporting the thousands of volunteers, trustees and charities that serve communities across Northern Ireland every day.
I look forward to further examining the detail of the Bill in Committee. On that basis, we are content to support the Bill's progressing to Committee Stage.

1,191 words. Text as published by the Northern Ireland Assembly.

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