My Lords, this is in a way part of the same issue—it is about where we put responsibility. In moving Amendment 3, which relates to reporting misdemeanours, I shall speak also to Amendment 11, which concerns the power to disqualify all trustees where there has been a collective failure to protect children or, indeed, vulnerable adults, as the amendment should have said. They are not mentioned in the current wording, but I will come on to that.
The Charity Commission’s guidelines on reporting serious incidents list—I shall keep to the order used—significant items to report. They include loss of money, damage to property and, only thirdly, harm to beneficiaries. The examples given have the same order of priority. They start with fraud and theft, go on to a large donation from an unverified source linked to terrorism, a disqualified person acting as a trustee, then not having a policy to safeguard your charity’s vulnerable beneficiaries, not having vetting procedures to check prospective trustees, and, only lastly, suspicions, allegations or, indeed, incidents of abuse of vulnerable beneficiaries. That order does not seem to give great confidence that beneficiaries rank very highly.
In the same guidance, the commission warns that if trustees fail to report a serious incident, the commission “may”, not “must”, consider this mismanagement and take regulatory action. Therefore, it is possible that trustees could have failed to record an incident of abuse of a vulnerable beneficiary and still no regulatory action would be taken. So not only does abuse of vulnerable beneficiaries rank below big donations or theft but failure to report is only possible evidence of mismanagement.
We should compare that with the duty on auditors, which, again, relates to money rather than to beneficiaries. The Charities Act 2011 places a duty on auditors to report matters of material significance to the Charity Commission, so there is a higher requirement on auditors for anything relating to money than there is on trustees for abuse of beneficiaries.
For that reason, amendments are needed both to make reporting mandatory and also, where there has been a collective failure of a board to identify, report or deal with serious allegations or incidents, to enable—not force—the Charity Commission to replace the whole group. At present, the Charity Commission would have to seek to disqualify each trustee one by one, probably showing evidence of individual responsibility, whereas if on the watch of a whole group of trustees things were seriously amiss and there had been a collective failure, the
amendments would enable them to be removed as a collective so that the charity could move forward in the interests of its beneficiaries.
Although, as has already been pointed out by the noble Baroness, Lady Barker, Amendment 11 deals with a failure of trustees to protect children, we also have in mind other vulnerable beneficiaries, including older people who may be at risk of elder abuse. Perhaps I may cite some examples of why we think that these two amendments are necessary and important. We know of cases in more than one charity where incidents of abuse of children were not reported as serious incidents by trustees. That shows that the general duty is not strong enough and not sufficient. We also know that trustees who may not be expert in child abuse and safeguarding work very much at the behest of the staff, who may have little more than cursory training in safeguarding.
This is particularly the case in trusts which do not concentrate on children. The Charity Commission may be notified by relatives of children that major incidents are not being taken seriously by the charity and the trustees. However, in one such case the families were advised by a government department that the Charity Commission was the only party able to address the failings of trustees to protect children. In that case the Charity Commission disagreed, feeling that it did not have the powers to intervene. It could only trigger the beginning of an inquiry. It appears that it lacks the power either to remove the trustee board as a whole, because it can do it only one by one, or indeed to appoint a new trustee with relevant experience to assist the board with the complex area of child protection.
This need for a power to remove all trustees also arises from the case of an institution where there were several instances of child-to-child abuse. An investigation by families and their lawyers showed that the staff had failed to appreciate the cumulative danger facing children, and they therefore failed to report. The fact of repeated sexual injuries involving different children over time should have led the trustees to ask some very challenging questions of the child protection officer there, as well as of the management, but they failed to do so. In that case the charity finally had to close. However, had the Charity Commission had the power to act in the way that we are proposing and been able to remove several trustees simultaneously, the closure might not have been necessary. Without the scope for agile action, matters can drag on, further damaging not only the children concerned but the charity’s reputation and, ultimately, its future. I beg to move.