The House of Lords' Liaison Committee has passed a motion to create a new ad hoc committee for this Parliament. The new committee will consider issues of best practice, transparency and accountability in the charity sector, and will sit for the duration of this session of parliament, which began on 18 May.
The Liaison Committee receives recommendations from the House of Lords to set up ad hoc select committees. These ad hoc committees call for evidence and consider a specific subject in detail, with a view to producing a report at the end of the session in which they are held.
In the Liaison Committee's 3rd Report of Session 2015 – 16 Lord Shinkwin recommended the creation of an ad hoc committee to consider 'how the charity sector could be strengthened through the development, dissemination and application of best practice, of mechanisms and of procedures for improving transparency and accountability.'
The 3rd Report suggested that the committee might also consider:
- 'Recent controversies' and the 'decline in public trust' in the charity sector.
- The role of the Charity Commission in respectively supporting and regulating charities.
- The nature of fiduciary duties in the governance of charities.
Lord Shinkwin's proposal to the House was debated and the motion to create the committee passed on the 22 March, along with proposals for three other ad hoc committees.
Rationale and aims
Lord Shinkwin's letter to Parliament is produced in the 3rd Report and supplies his rationale for recommending a new ad hoc charities commission. His letter considers, in particular:
- The increasingly widespread reliance on the charity sector by UK households.
- The concurrent public distrust in the charity sector, particularly with reference to the recent failure of Kid's Company.
- Concerns over executive and senior management salaries in major UK charities.
- Related concerns over transparency and reporting by charities in the use of donations to them.
Lord Shinkwin hopes that an ad hoc committee will be able to investigate how to 'rebuild trust' in the charity sector in light of these problems, and in particular:
- Whether whistle-blowing can be improved as an 'early warning system' to avoid the failure of charities, such as Kid's Company.
- Whether the Charity Commission is capable of sufficiently regulating charities, or should also act in partnership with other bodies, such as Public Concern at Work.
- Whether charities are being made sufficiently accountable for compromise agreements and employment law issues within their organisations.
The members of the committee will be announced and a call for evidence made after the opening of the next session of Parliament.