Concern at proposed charity law reforms

August 16, 2002

Universities fear they could face further regulation under reforms to charity law being considered by the government.

Changes to the status of charities exempted from the jurisdiction of the Charity Commission are being weighed up. Universities are exempt but they do benefit from tax relief as exempted charities.

A consultation document from the Cabinet Office's performance and innovation unit asks whether it is right to continue to exempt certain classes of charity and, if so, which institutions should continue to be exempted.

A spokeswoman for Universities UK said: "Obviously we hope that any recommendations from the PIU review will not add to the already heavy burden of accountability on the sector."

UUK intends to respond when a final consultation paper is produced by the PIU. The consultation closes at the end of October, although submissions sent before Christmas will still be taken into account.

Hubert Picarda QC, an expert on charity law and education, said:

"Universities should fall into exempt charitable status because they are subject to self-regulation. I do not see universities being bound by more governance."

The consultation is broken down into 15 broad headings including: charitable status, specifically whether it is still relevant; the management of charitable funds; governance and trustee issues; the impact and forms of regulation; self-regulation; performance improvement; and accountability/transparency.

A range of questions follow each heading including should charities be allowed to spend permanent endowment funds?; should trustees and governors of charitable bodies be paid; and are people deterred from becoming trustees and governors because they are financially liable for the charity? There are also proposals for an intermediate status between charity and non-charity.

It is unlikely that any reform based on these questions would apply to universities unless their status as exempted charities was changed and they became registered charities subject to the jurisdiction of the Charity Commission.

Universities, unlike registered charities, do not have to submit their accounts to the Charity Commission but must keep accounts for six years and are required to make them available publicly within two months.

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