My noble friend makes a very good point about the information exchange between agencies across government, and I am more than happy to pick that up with him in writing or at a later stage.
I turn to the noble Baroness’s Amendment 11. This amendment seeks to empower the Charity Commission to disqualify an entire trustee board where it collectively fails to ensure adequate protections for children who are the charity’s beneficiaries. Later on we will come to debate Clause 10, which will confer the power for the commission to disqualify on a case-by-case basis; suffice it to say that it is one of the most important powers in the Bill. That clause is relevant to this amendment so it may help the Committee if I give a short overview of it now before going on to consider the noble Baroness’s amendment.
Most unfit individuals will be caught by the existing—and, under the Bill, extended—automatic disqualification criteria, but the Charity Commission needs a power to act in cases where individuals are not excluded by automatic disqualification. The whole point of this power is to give the commission the ability to disqualify an individual whose conduct clearly makes them unfit to be a charity trustee, where, if the commission were not to act, there would be a real risk, or at least a reputational risk, to charities.
We carefully considered the report of the Joint Committee on the draft protection of charities Bill, and made improvements to this provision as a result. More detail about the operation of the provision has been included in the Bill, and it is now a three-limbed test: first, one of the conditions A to F must be satisfied; secondly, the commission must consider that the person’s conduct makes them unfit to be a charity trustee, and draft guidance has been published on that; and, thirdly, the commission must consider that exercising the power is in the public interest, to protect public trust and confidence in charities. While the power may be relatively broad, its use would be targeted. The commission has said that it expects to use this power on a relatively low number of occasions each year.
The commission already has the power to act, and has done so, in cases where there has been a collective failure of trustees in relation to systemic governance issues. The powers to remove trustees in Sections 79 and 80 of the Charities Act 2011 do not explicitly or implicitly contain any restriction on removing trustees where that leaves one or none in place. Neither does the proposed disqualification power in Clause 10. There is, therefore, no reason why the commission would not remove all trustees on the ground of ensuring the safety and protection of children, where this was appropriate, proportionate and in accordance with best regulatory principles.
In circumstances where there is an impact on the beneficiaries of the charity, the commission has tended to appoint an interim manager, under Section 76 of the Charities Act 2011, to ensure the continued operation of the charity and to get it back on track before new trustees can be appointed and take over. However, there has been a case—and I will not name the particular
charity concerned—where the commission has removed all 10 trustees on the board for collective governance failings.
The noble Baroness, Lady Barker, made a point about trustees having joint liability. The Charity Commission is required to act proportionately and so, in most cases, would target regulatory action on those most culpable or responsible for misconduct or mismanagement.
The noble Baroness’s amendment deals specifically with collective trustee failure relating to safeguarding. We would not want to cast any doubt on the commission’s existing liability to take action relating to collective trustee failures, or limit that by making specific provision. On the basis that the commission can, and does, already act to address collective trustee failures where it is proportionate to do so, I hope the noble Baroness will feel able to withdraw her amendment.