Charities Bill [HL]

moved Amendment No. 102:"Page 143, line 36, at end insert—" ““(   )   In subsection (2), at the end of paragraph (a) insert ““but so that the requirements of such regulations shall be the minimum conmmensurate with the need to ensure that the statement of accounts provides a true and fair view of the charity’s financial position””. (   )   In subsection (2), after paragraph (b) insert- ““(c)   for more than one type of statement to be prepared to reflect the differing natures and sizes of different charities.”””” The noble Lord said: My Lords, I move Amendment No. 102, to which is added the name of my noble friend Lord Sainsbury of Preston Candover. I need to make it clear that my noble friend has been instrumental in developing the amendment. He contributed extensively and knowledgeably to the pre-legislative scrutiny committee and has been most helpful on various points concerning charitable foundations to try to encourage others to follow his example as a generous donor and, indeed, trustee. I look forward to hearing his contribution to the debate in a moment. It is an amendment to the numerous provisions in Schedule 7. It would make changes to Section 42 of the Charities Act 1993. That gives the Secretary of State power to make regulations prescribing the form and content of charity accounts. Section 42(1) refers to,"““a statement of accounts complying with such requirements as to its form and contents as may be prescribed by regulations made by the Secretary of State””." Subsection (2) provides,"““for any such statement to be prepared in accordance with such methods and principles as are specified or referred to in the regulations””." It is one of the key principles of the Bill that charity regulations should be appropriate and proportionate. The Government accepted that argument during earlier debates. We recognise that a ““one size fits all”” approach to regulation is not in the best interests of the charity sector as a whole. However, at present all charities from the simplest grant makers to the giants of the charity world are obliged to prepare their accounts in accordance with the statement of recommended practice, commonly known as the SORP. The SORP is a long and complex document. The original charity SORP, issued in 1995, contained 240 paragraphs. The SORP in 2000 contained 358 paragraphs. The SORP in 2005 contains 439 paragraphs—nearly double the length of 10 years ago. That is in addition to compliance with the growing volume of regulations applicable to all UK organisations: employment, health and safety, discrimination and so forth. Surely that scale of accounting regulation is not applicable or worthwhile for all charities. The Minister may argue that the Charity Commission will address the issue; one would hope so. However, the relevant paragraph of the annual report refers to,"““publishing a new Statement””—" a statement, not several—"““of Recommended Practice (SORP) for the preparation of charities’ annual accounts and reports. Recognised by the Accounting Standards Board, the new SORP further hones charity reporting within existing principles. It aims to help charities explain what they do, how they go about it and what they achieve, merging narrative and financial reporting into a coherent, outcome-focused package, improving their transparency and accountability””." Leaving aside the ghastly collection of buzz words that disfigures that statement, I do not see much that leads me to believe that the new SORP will make sufficient distinction between large and small charities. We propose that the principle of appropriate and proportionate regulation should be extended to the preparation of charity accounts. That is why the amendment would give the Secretary of State powers to achieve just that. I hope that the Government will look with favour on it. I beg to move.