Independent Review of Charity Regulation - terms of reference

Background to the review

The Charity Commission for Northern Ireland^[1] is the statutory body with responsibility for operational decision making in relation to charity regulation. The Commission commenced operation in March 2009. The NI Charity Tribunal is the judicial forum which determines appeals or requests for review of decisions made by The Charity Commission for Northern Ireland (CCNI) in the conduct of its statutory functions. Matters may also be referred to the Charity Tribunal by the Attorney General for NI.

In February 2020 the NI Court of Appeal upheld Madam Justice McBride’s High Court decision of May 2019 that the Charity Commissioners were the body corporate “the Commission” and that they do not have implied or express power to delegate their functions to staff acting alone. This has had a profound impact on the operation of the Commission’s decision making processes^[2] and for charity sector confidence in the regulatory framework.

In addition to the High Court and Court of Appeal decisions in relation to the legislation governing the operation of the Commission, confidence within the charity sector in the effectiveness of the regulator and the Department’s oversight has been negatively impacted by a series of challenges to the proportionality of decision making and communications approach over a number of years.

It is therefore appropriate to conduct a review of the legal and regulatory framework within which the Commission operates and the Commission’s relationships with stakeholders. The review will examine whether the legislation and the Commission’s efforts within that legal framework strike the right balance, in light of best practice, between supporting charities to do the right thing and deterring or dealing with misconduct.

The purpose of the review

The review will focus on learning from past experience in order to inform future development. It will not revisit decisions in individual cases but will examine the legal and regulatory framework. It will make recommendations on changes that can be made to improve the delivery of services and the operation of the Commission going forward.

In particular the review will consider:

• how the five original objectives and statutory functions have been delivered by the Commission to date and whether they remain fit for purpose
• how these could be delivered in the most effective manner going forward
• whether the Commission’s engagement with stakeholders is in accordance with best practice e.g., dealing with concerns raised about charities, decision reviews, complaints handling, FOI procedures etc
• whether the regulatory framework envisaged in the Act remains appropriate and is in line with best practice and developments across England and Wales, Scotland and Ireland. To include
  • whether all charities should be required to register in NI
  • whether the current system of charity registration is fit for purpose, and in addition whether the particular requirements envisaged for s167 institutions are fit for purpose
  • whether there are other statutory or non-statutory approaches short of the use of a Statutory Inquiry which could be implemented as part of the regulatory framework to assist with achieving resolution of concerns in relation to charities
  • whether there are other statutory or non – statutory approaches which could be implemented to provide the opportunity for independent review of a regulatory decision short of an appeal to the NI Charity Tribunal
• how the Department’s role in and responsibility for the development of the regulatory framework is informed, delivered and communicated and whether further improvements can be made. The Minister has requested that this include a focus on s167 (charities established outside Northern Ireland operating in the North) and Part 11 of the Act (CIOs) and formal exploration of how statutory cooperation with charity regulators in neighbouring jurisdictions can be strengthened
• some issues may be identified by the Panel that fall outside the scope of the Terms of Reference but affect charity regulation. The Panel should advise of these matters and recommend whether further examination should be undertaken

Conduct of the review

It is proposed that Minister appoints a panel of three people (the Panel) to conduct this independent review. Members must be able to demonstrate an understanding of the wider voluntary and community sector and charities in particular. Taken together, the Panel should include expertise and experience of charity law and regulation, legislation, organisational structure, public sector governance and knowledge of the local charities sector. Any private, voluntary, charitable or political interest which may be material to the assignment will rule someone out.

The panel in conducting the review will be informed by submissions from charities and the wider public and through engagement with a number of stakeholders as the Panel decides with appropriate input from the Department and others. These are likely to include the Commission, other regulators in GB and Ireland and representative bodies from the voluntary and community sector to include the Northern Ireland Council for Voluntary Action (NICVA).

The panel will be provided with a small administrative support team to manage correspondence / arrange engagement / consultation etc.

Deliverables and timeframe

The Panel will be appointed by end December 2020 and the review will commence on 25 January 2021.

The Panel will deliver the following outputs:

• An interim briefing to the Minister for Communities on the main regulatory themes emerging from public and stakeholder engagement – by 4 June.
• A report setting out an assessment of the delivery of the regulatory framework to date, including the effectiveness of the current regulator in delivering on its agreed objectives and statutory functions; options for optimal charity regulation in NI, including the configuration of a statutory regulatory body; and making final recommendations to be presented to the Minister for Communities - by 26 July 2021.