Legal changes to improve transparency and accountability mooted for Scottish charities

Charities in Scotland are being urged to take part in a consultation on measures to improve transparency and accountability in the voluntary sector and how it is regulated.

This includes measures around the publishing of accounts and annual reports in full as well as creating a register of trustees.

The measures would also bring Scottish charity regulation in line with laws in England and Wales over the disqualification of senior managers and trustees and focus on offering positive guidance to charities on ways to improve.

The consultation follows on from a previous consultation two years ago and will focus on improvements that will bolster public trust and confidence in charities in Scotland as well as how the sector is regulated by the Scottish Charity Regulator (OSCR).

“We want to hear from people working in and with the charity sector, members of the public, and anyone with an interest in charity law,” said the Scottish Government.

“This engagement will build on the previous consultation responses and will assist the Scottish Government in deciding the next steps for charity law.”

Issues being consulted include whether annual reports and accounts of charities should be published in full on the Scottish Charity Register.

Currently there is no legal requirement for these to be published on the register. Accounts of charities with an income of more than £25,000 are published but personal information, such as trustee names and signatures is redacted.

The proposal around a register of trustees includes creating internal and external databases. The internal database would be for the regulator’s use only and include details such as email and home addresses as well as names of those removed as a trustee. Meanwhile, an external register could restrict information to trustee names and those removed from the register.

Another proposal is to ensure Scottish charity legislation is on a par with charity law in England and Wales over extending automatic disqualification for charity trustees and senior staff.

Issuing positive guidance

In addition, the consultation looks at the OSCR’s powers, to focus on positive guidance to charities.

“Most of OSCR’s powers are preventative, requiring charity trustees or others not to take particular actions. OSCR cannot direct charity trustees to take a specified positive action to remedy non-compliance or protect charitable assets. One option would be to give OSCR a power to issue positive directions,” states the consultation.

Another proposal is to ensure that to be registered as a charity in Scotland they organisation must have and retain a connection to the area.

“This this option would mean that charities established under the law of a country or territory other than Scotland, which are managed or controlled wholly or mainly out with Scotland, do not occupy land or premises in Scotland and do not carry out activities in any shop or similar premises in Scotland, would no longer be able to be entered on the Register,” says the consultation, which closes on 5 February.

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