I thank the Chairman and the committee members for the invitation to reappear before the committee this morning to discuss the general scheme of the charities (amendment) Bill 2022. I am joined by officials from my Department, including Ms Ciara Bates, principal officer; Mr. Kevin Power, assistant principal; and Ms Niamh Hoey, administrative officer.
I have been closely following the committee’s pre-legislative scrutiny of the Bill over recent weeks. The points and queries raised in the meetings to date have been of great assistance to me and to my officials as we continue to develop the proposals. I would like to record my appreciation for the broad support the Bill has received during these hearings.
This is an important Bill. It aims to strengthen the charities sector, ensuring greater transparency, clarity and fairness, which will serve to enhance public confidence in the sector. The proposals contained in the Bill seek to enhance and consolidate the existing legal framework for the Charities Regulator to conduct its statutory functions, ensuring more proportionate regulation for the sector. The Bill aims to further foster a culture of proportionate regulation. The general scheme presented to the committee was the result of extensive engagement by my Department with the Charities Regulator, with counterparts across Government and representations and feedback received from the sector. In particular, the extensive operational experience of the regulator has resulted in a number of proposed amendments.
Pre-legislative scrutiny is providing a great opportunity to discuss and examine the potential impacts of the proposed Bill. I recognise and acknowledge those observations and concerns raised by witnesses and by committee members, respectively. There have been several insights and suggestions made which are being followed up, as my officials continue to engage with the Office of the Parliamentary Counsel, particularly those around significant events, due process and the right to appeal.
There is an identified need for proportionate regulation and governance requirements for our charities. The measures proposed in the Bill are designed to strengthen the sector further and to enhance public confidence in charities generally. In many cases, the Bill will ease the administrative burden on smaller charities. It will also further enhance and empower both existing trustees and potential trustees, by giving greater clarity in respect of roles and responsibilities.
I want to give some reassurance. With this Bill, we are seeking to create an environment whereby trustees feel assured that they are carrying out their duties and where people are willing and confident to volunteer to become trustees in the first instance. We have listened carefully to submissions made and have taken account of those areas which may require greater clarification and further consideration. Fair and reflective regulation is the very basis for this Bill.
Legislation, by its very nature, is drafted to account for a worst-case scenario. I would hope that last week the regulator gave assurance that her approach was very much one of early and ongoing engagement with charities when issues arise.
However, there have been specific instances where the regulator has not had the sufficient powers available to it to deal directly with a known issue. For example, the Bill will now allow the regulator to intervene where no effective management or board oversight is available. In this context, it is important to emphasise that the regulator already adopts a proportionate approach to regulation. The regulator engages directly with individual charities to support and enhance their understanding of both statutory reporting requirements and governance standards and works with charities to bring them into compliance. The small number of cases in which the regulator has had to appoint an inspector reflects the constructive and proactive engagement undertaken.
This balanced approach, commitment to fair procedures and adherence to the rules of natural justice, will continue with the implementation of any new legislation. Registered charities play an integral role in the provision of services to our communities. It has been acknowledged that public scandals involving the mismanagement of a charity, or in some extreme cases the misappropriation of funds, can have a detrimental effect on the wider sector. However there is also a risk that public confidence in the sector, and its regulator, will be eroded if the regulator is unable to effectively deal with concerns brought to its attention simply because the required powers are not provided for in statute. The perception of inaction can be just as damaging to the reputation of the sector. 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.
On more recent developments, I note that the Charities Regulator has proposed the inclusion of two additional draft heads which have been brought to the attention of the committee. The first proposed head centres on introducing an obligation on a charity to reflect their charitable purpose in their constitution. The second looks to remove an existing obligation on a charity with a court-ordered scheme to seek an order of the High Court, where the terms of the scheme require it, and allow them to apply directly to the regulator.
I would welcome the observations of committee members on these proposals which were not included in the general scheme. The Government is committed to ensuring the production of legislation that is robust, fair and transparent. Our charity sector is an important and valued part of Irish society. To ensure that our charities continue to thrive, we urgently require an updated legal framework that reflects the reality of operations on the ground. I am grateful to the committee for this extended opportunity to discuss the Bill and I look forward to the discussion. Go raibh maith agaibh.
