What Next For Public Benefit?

Nicola Evans outlines the practical impact on charities of the withdrawal of parts of the Charity Commission's guidance on public benefit. The Charity Commission is due to issue, any day now, an amended draft public benefit guidance for public consultation (the draft guidance was due to be produced by the end of March 2012 but, at the time of writing, it is still awaited).This follows the withdrawal on 21 December of its guidance on public benefit and fee-charging, as well as certain elements of its other public benefit guidance, after a decision of the Upper Tribunal on 2 December, which would have quashed those elements of the guidance had they not been withdrawn. What practical effect might this have for charity trustees?

Why does the guidance matter? Charity trustees are under a statutory duty to have regard to the public benefit guidance when exercising any powers or duties to which it is relevant. Clearly, therefore, it would not be satisfactory for charity trustees to have to have regard to guidance which the Upper Tribunal has found to be flawed. For this reason, the public benefit guidance relating to fee-charging has been withdrawn in its entirety, while all the other public benefit guidance has been amended to remove parts which the Upper Tribunal found to be wrong or misleading, or where references to such parts were made. In particular, an element of one the Commission's principles of public benefit, principle 2b (suggesting that the opportunity to benefit must not be 'unreasonably restricted' by ability to pay any fees charged) was 'wrong'. The amended guidance stands, and is subject to the statutory duty, until replaced or supplemented by revised guidance following the consultation.

How might the guidance change? It is not yet clear how much of the guidance will be revised for consultation. Presumably some form of new guidance aimed at charities which charge fees will be produced, but all the guidance was affected to some extent; it is likely, therefore, that the general public benefit guidance, and possibly also that relating to the educational charities, will be the subject of further consultation. Key points to look out for in the revised guidance, arising from the Upper Tribunal decision, would be:

A recognition that the Charities Act 2006, including the supposed removal of a presumption of public benefit for certain heads of charity (relief of poverty, advancement of education/religion), did not change the law of public...