Charities Bill [HL]

My Lords, like the noble Lord, Lord Hodgson of Astley Abbotts, I have some sympathy with what the noble Lord, Lord Best, has said. But as will become clear in the next few minutes, a different solution from his is preferable. Like other noble Lords who have contributed to this short debate, while we agree that this is something of a problem, the solution constructed in the proposed new clause is not one that finds our support. We too think that it may bring into play the operation of the law of unintended consequences. I am also very much drawn to the point made by the noble Earl, Lord Caithness, on the importance of relying on the good sense of the trustees and making them face up to their responsibilities. That is very important. To offer the option of hiding behind the Charity Commission by asking it to intervene in situations of this kind is probably unwise. I agree with the principle put forward by the noble Lord, Lord Best, that there should be safeguards preventing charity trustees disposing of their property at an undervalue. Indeed there is a general principle of law that charity trustees must obtain the best terms reasonably achievable in the circumstances when they dispose of any of their assets, except where the disposal furthers a charitable purpose. That point is understood. Before 1992, there was a requirement in charity law that trustees had to obtain the Charity Commission’s consent by order before disposing of any land that had at any time, not just in the previous few years, been occupied for the purposes of the charity. That requirement was repealed as unduly bureaucratic and over-regulatory and replaced by the present arrangements set out in Part V of the Charities Act 1993. Under those arrangements, charity trustees do not need to obtain a Charity Commission order for the sale of their property if they follow a prescribed procedure. That procedure requires trustees to obtain a written report on the proposed disposal from a qualified surveyor acting exclusively for the charity to market the property in the way recommended by that surveyor—unless he recommends that it should not be marketed—and to satisfy themselves that the terms of the disposal are the best reasonably obtainable; which is the important principle. Regulations made by the Home Secretary prescribe the information that the surveyor must include in his report to the trustees. Where we part company with the noble Lord, Lord Best, is over his belief that the best safeguard against disposals at an undervalue is to give back to the Charity Commission the role of inspecting the terms of the transaction. In my view, that role is best left in the hands of an expert in the valuation and sale of property, which a qualified surveyor is, but the Commission—with due respect—is not. However, we are willing to contemplate a review of the Charities (Qualified Surveyors’ Reports) Regulations 1992. These regulations set out what matters the surveyor must cover in his report to trustees on any projected disposal of land. Our review of these regulations, which we would begin after the Bill has been enacted, would ensure that a surveyor was required to alert trustees to any factors, such as development potential or ransom value, which charity trustees should take into account when agreeing the terms of a disposal. Our review of the regulations will involve full consultation with schools and other landowning charities—obviously we would want to take on board the views of the profession itself.