Charities Act 2006

The Charities Bill, worked on for four years, is now the Charities Act 2006. The Act, which is not yet in force, makes many welcome changes at a technical level, and also includes a number of innovations such as the Charity Tribunal and the Charitable Incorporated Organisation.

Perhaps the most contentious provision in the Act is the abolition of the presumption of public benefit. S2(1) of the Act states that for the purposes of the law of England and Wales, a charitable purpose is a purpose which (a) falls within [a list of charitable purposes] and (b) is for the public benefit.

S36 of the 2006 Act is a new provision which entitles a trustee of a charity, or a person connected with him or her, to receive remuneration out of the funds of the charity.

Much of the draft regulation around the CIO has been taken from company legislation, further begging the question about whether the CIO is necessary.

One major concern in the light of the 2006 Act will be the ability of the Commission properly to regulate the sector in the light of its new functions, duties and powers conferred by the Act.

A consultation has been undertaken with respect to the Commission's draft, new CC37 on Charities and Public service Delivery, which has been refreshed to take account of the Trafford and Wigan decisions.

The Charities Act 2006, and other initiatives such as the National and Local Compacts, futurebuilders and ChangeUp, and now the new Treasury Interim Report on the Future role of the Third Sector in Social and Economic Regeneration, demonstrate a commitment by Government to the VCS.