It has been 17 years since the 2005 Act was introduced, with the charity sector changing significantly during that time. The announcement of the Bill is a welcome development; however, in many ways it leaves much to be desired.

The driving force behind the Bill is to improve transparency and extend the power of the Office of the Scottish Charity Regulator (OSCR). The Bill will introduce a register of charity trustees and, while this may raise some concerns about privacy or data protection, moving to a similar model already in place in England and Wales will make it clearer to the public who is in charge of Scotland’s charities.

Although there is a legal duty for charities to submit annual accounts, OSCR is not presently able to publish those accounts in full - and those which are published have to be redacted.

David Smith is a Senior Solicitor at Turcan Connell

The Bill introduces a requirement for OSCR to publish accounts which will resolve this anomaly. Charities will be able to apply to OSCR to redact certain information which may jeopardise the safety or security of a charity or its charity trustees.

In previous consultations on law reform, it became clear that OSCR had a long-standing list of requirements needed to ensure that it was able to carry out its regulatory powers properly. The Bill ensures, for example, that OSCR can remove a charity from the register where the charity has not submitted accounts or responded to communications sent by OSCR. This will help ensure that charities engage with the regulator or face removal from the charity register if they do not engage.

While these are all welcome improvements, there has been a lack of development of other more complex areas. For example, when a charity has been created by an Act of Parliament or Royal Charter, even a simple amendment to its constitution might require a lengthy and expensive process through Parliament or the Privy Council. Disappointingly, proposed reforms to simplify constitutional changes for such charities have not been included in the Bill - despite finding favour during the consultation process.

Over time, many charities merge and in such cases charitable legacies under supporters’ wills may fail to reach their intended charitable cause. This has led to charities keeping “shell” structures in place in order not to lose those legacies - but this creates an extra administrative burden in managing the “shell” charities.

The Bill introduces a register of charity mergers and provisions relating to legacies which will help with this difficulty. However, the Bill does not extend to lifetime gifts and many have been left wondering why the English and Welsh model (which covers all gifts and not just legacies) was not used as the basis for the Scottish provisions. As a result, the Scottish provisions might fall short compared to charities south of the border.

Reform of charity law in Scotland is overdue, and the Bill could have been an opportunity for Scotland to lead the way in regulation of the third sector. Instead, it feels as if Scotland is now playing catch-up and will still have some way to go after this Bill. This is a real pity, particularly when the charity sector is facing significant challenges while still providing vital services which are so heavily relied upon by the public.

David Smith is a Senior Solicitor at Turcan Connell

Reform of charity law is long overdue, but Bill looks like a missed opportunity - David Smith