Charities Bill [HL]

We return to the issue of independence. I thought we had already got ourselves to a good position during the debates on the Bill prior to the election, but I am not surprised that the noble Lord, Lord Hodgson has come back to this in another form, and I congratulate him on his wit in so doing. The Charity Commission already has significant flexibility in the appointment of its staff, under its existing delegated authority. Except for senior civil servants, of whom there are currently only six at the Charity Commission—that excludes the commissioners, who will cease to be civil servants under the Bill—there are no restrictions as such on how the commission determines pay and grade structures. Instead, it is required to work within its overall pay remit to employ the right mix of staff to deliver its objectives. Senior Civil Service pay and grade structures are determined by the Cabinet Office, but departments including the Charity Commission have flexibility to   make their own arrangements for determining individuals’ pay by reference to performance. Therefore, except for a small number of its most senior staff, the Charity Commission already effectively has control over the terms and conditions of service of staff within it. The current regime for pay and grading of staff is set out in paragraph 2 of Schedule 1 to the Charities Act   1993. That refers to the Treasury because, at that time, there were standard national grade and pay structures for all civil servants across government. Subsequently, the Treasury made all departments responsible for deciding their own pay arrangements within overall Treasury limits. The commission has discretion in how its total pay budget is divided up. It also agrees its arrangements annually with the Treasury to ensure that they are broadly in line with other departments. Paragraph 5(2) and (3) of Schedule 1 does not mean that the Minister for the Civil Service or officials at the Cabinet Office acting on his behalf have to approve the detailed terms and conditions of service of either the chief executive or Charity Commission staff in general. In practice, for the Charity Commission as for other departments, they approve only the broad framework within which detailed decisions on terms and conditions are taken by departments themselves. The commission has recently made several successful appointments, not least that of Andrew Hind, appointed last year as chief executive following open competition. That competition attracted a good field of high-quality candidates, which does not suggest that the Civil Service framework in which the commission currently operates prevents it recruiting staff with the skills and experience that it needs. The commission reviewed its recruitment procedures as recently as 2003 to ensure that it was able to recruit and retain high-quality staff. In addition to its performance-related pay system, the commission makes good use of starting-pay flexibility, recruitment and retention allowances and non-pay rewards to both attract and retain high-calibre people. The commission has developed a workforce strategy that sets out a comprehensive approach for achieving the changes needed to meet financial, structural and   cultural challenge, and the challenge of future delivery needs. Key priorities identified include further modernisation of its pay and reward structures to support a high-performing, highly skilled and flexible workforce, and effective investment in the training and development of its staff to maximise retention. The amendment would affect the commission’s status as a non-ministerial department. We thought long and hard about the commission’s status, and decided that the most appropriate status for it remained that of a non-ministerial department—not least because no suitable alternative had been identified and described to us. The commission fully supports the continuation of that status. However, we listened to the points made by noble Lords on the matter in the previous Session, so have made provision in Clause 70 for the commission’s status to be considered as part of the review of the impact of this legislation. A person must be appointed to carry out the review within five years of the Bill receiving Royal Assent, and a copy of the report produced as a result of the review must be laid before Parliament. As a result of that review, some alternative status and perhaps an alternative strategy for the Charity Commission may well be identified outside the Civil Service. For as long as it remains a non-ministerial department staffed by civil servants, it is in our view essential that government should retain some control of staff terms and conditions. For that reason, the Government cannot accept the amendment, and I invite the noble Lord to withdraw it.