Scottish charity law: consultation analysis

Section 9

The speed and efficiency of OSCR’s powers to gather information when making enquiries

Context

OSCR can legally require any person (third party) to provide information which it considers necessary for its inquiries about charities.  If OSCR requests such information about a charity from a third party, it must also give notice to the charity in question that it is the subject of the request, and provide the charity with the right to review.  However, the legislation does not take account of situations where the body in respect of which information is sought is not a charity (e.g. a body or individual that is misrepresenting themselves as a charity).  The effect of this is that OSCR cannot require a third party to provide information as it cannot serve the required notice on a charity. This potentially hinders OSCR inquiries as it cannot access all the information it may require.

In the situations where OSCR is requesting information from a third party about a charity to help with its inquiries, and there is a charity to notify that they have made the request, OSCR must adhere to three notice periods.  The legislation could perhaps be clearer on whether all three notice periods need to have expired in full (i.e. 56 days) before OSCR can see the information from the third party, and whether a charity, which does not request a review within 21 days of receiving the notice, can see the information from the third party once that 21 day period has expired.  As there is potential ambiguity in the legislation, OSCR’s current approach is to wait for all three time periods to expire in full before viewing the information from the third party.  This potentially increases the amount of time it takes for OSCR to make its inquiries, which can be detrimental to all parties involved.

Table 24: Question 20

Should OSCR be given the power to give the required notice of a request for information to a body or individual that is misrepresenting themselves as a charity, that is no longer a charity, and to former trustees of a charity which has ceased to exist?

	Yes	No	Not Answered	Total
Individuals	88%	4%	8%	127
Charity Sector	86%	1%	13%	164
Other	81%	0%	19%	16
Total	87%	2%	11%	307

The vast majority of respondents SUPPORTED the proposal for OSCR to be given the power to give the required notice of a request for information to a body or individual that is misrepresenting themselves as a charity, that is no longer a charity, and to former trustees of a charity which has ceased to exist (87%).

A number of themes emerged from the feedback from respondents who supported this proposal.  

Firstly, it was considered vital that OSCR had effective powers of investigation (and was able to undertake inquiries in a timely fashion), and that the granting of such a power was in the best interests of strengthening transparency and accountability of the charity sector.  As such, the proposal was generally viewed as a reasonable extension to OSCR’s powers - “It is critical that OSCR has the power to move quickly where there is any doubt about a charity's operation or governance”.

Secondly, it was felt that the granting of such a power would have a positive impact on strengthening public reassurance, trust and confidence in charities.  In particular it was emphasised that “society supports charities because it is believed that they will at all times be fulfilling charitable purposes and providing public benefit”.  

Aligned to these points, was the need to: tighten the legislation to ensure that OSCR’s ability to obtain the information it needed to undertake inquiries was not hindered in any way.  And that this would support more effective regulation of the charity sector, and protect the sector’s reputation and integrity – “important to preserve and uphold the charity brand”.

Wider points raised included that granting OSCR this power would help to prevent unscrupulous individuals evading investigation, prevent fraudulent activity, and that it was also important for lessons to be learned to prevent the abuse of Scottish charity legislation.  

A further point noted in a couple of cases was that the use of this power should be subject to a public interest test, and that there might be a risk of OSCR straying into areas that were “not within its jurisdiction to regulate”.  An example provided was where a body or individual misrepresents themselves as a charity that this would appear to be a police matter rather than a matter for OSCR.  

A further point raised, but not by many, was around the importance of setting clear parameters around the use of this power, and that there should be time limits applied to this power.

Where challenges were reported (not in many cases) this centred on circumstances where the likelihood of recovering information might be difficult, that the power might be difficult to enforce, and the potential resource implications for OSCR.

Only 2% of respondents DID NOT SUPPORT the proposal.

It should be noted that the feedback provided by respondents who were not supportive of the proposal for OSCR to be given the power to give the required notice of a request for information to a body or individual that is misrepresenting themselves as a charity, that is no longer a charity, and to former trustees of a charity which has ceased to exist was limited to a few respondents.

The feedback largely focused on two points:  

• That there would require to be a reasonable time limitation regarding the length of time after the alleged incident or after the cessation of the charity that OSCR could reasonably be expected to adhere to.  
• That in certain cases it was felt that it might be outwith the remit of OSCR to undertake an inquiry, and that there were other, more appropriately placed bodies who should assume responsibility.

Table 25: Question 21

Should it be clarified that the notice periods to charities that are subject to a request for information can overlap?

	Yes	No	Not Answered	Total
Individuals	84%	4%	12%	127
Charity Sector	80%	2%	18%	164
Other	81%	0%	19%	16
Total	82%	3%	15%	307

The vast majority of respondents SUPPORTED clarification for charities, which are subject to a request for information, that notice periods can overlap (82%).

Much of the feedback provided by respondents was that there was a need to strengthen current legislation and/or address any perceived ambiguity in the way notice periods were presented in the legislation - either through the issuing of guidance to provide clarity, or by amending the legislation itself, as reflected in the following quote - “The ambiguity in legislation is not helpful and currently leads to OSCR erring on the side of caution in allowing all three time periods to expire.  This does not appear the most efficient use of (limited) resources by OSCR and in addition, potentially delays action being taken against a body or individual that is misrepresenting themselves as a charity.  It is important that action is taken as soon as practically possible in these situations in order to maintain the trust the general public has in charities and the voluntary sector”.

It was considered essential that OSCR was allowed to undertake investigations in a timely and appropriate manner (to avoid any unnecessary delays), and that this was in the public interest – “Allowing investigations to happen quickly and efficiently, whilst ensuring enough time is given to allow for appeal and proper consideration, is essential.  Delaying the process where it could be avoided is not good for the charity, the public or the regulator”.

Wider points raised by many respondents included that clarification that notice periods could overlap would be helpful for the following reasons:

• It would ensure greater transparency and accountability of the process among all parties involved. 
• To ensure the investigation process is effective and efficient - it would enable OSCR to address issues of mismanagement in a timely manner. To allow investigations to progress and be concluded more quickly – “should allow for a quicker and more efficient process when submissions are made before each time period has elapsed”, “help OSCR to access required information sooner and complete inquiries earlier”.
• To help streamline the process, and make it as easy as possible for charities to be compliant.
• To make the process as clear as possible for all parties involved (i.e. to avoid any confusion, misunderstanding, etc.).

A number of respondents emphasised the importance of ensuring maximum transparency and accountability in the process, and the impact that long delays between alleged charity misconduct and regulatory investigation and reporting could have on undermining public trust and confidence in the charity sector and in the effective regulation of charities. 

A few respondents highlighted the importance of providing organisations and individuals with “reasonable and fair time periods” to comply with requests for information and request a review should they wish to – “This process is likely to put an amount of stress on an organisation that has found itself at the centre of an enquiry. Having clarity of time periods, when they are able to make requests for review and when the process reaches its conclusion would provide the organisation with clear timeframes to work to.  If the organisation is unaware that these time periods can overlap there could a risk of missing the window of opportunity to request a review of the decision to request information”.

Another point raised, but not in many cases, was around clarifying whether the days related to working days or calendar days.

Only 3% of respondents felt that there SHOULD NOT be clarity that notice periods can overlap for charities that are subject to a request for information. 

No common themes emerged from the feedback.  Individual points raised, however, included:

• That clarification of the legislation had the potential to make the situation more complicated for charities.
• The 56-day process as a whole was deemed too long and should be shortened if possible.