The new Charities Bill, announced in the Queen’s Speech on 11 May 2021, has already started to make its way through Parliament. It is the result of a detailed review of technical issues in charity law which prompted Lord Hodgson, who undertook the review, to comment :-
“I found that charities faced a number of historic obstacles under the current law. These unnecessary burdens on trustees act like barnacles on a boat, causing a drag when all should be plain sailing …”
There is a reasonable expectation that the Charities Bill will become law this year. The Bill includes provisions which are intended to simplify the law regarding:-
- Selling or leasing property, more options about who provides advice to the trustees regarding the “sale” and the content of that advice– it may be that in simpler transactions, there will be a costs saving in this regard;
- Permit payments to trustees in certain circumstances for goods and services provided;
- Making changes to a charity’s governing document;
- Making “ex gratia” payments; and
- The use of land, funds and other assets held by a charity which cannot be spent as if it were income (permanent endowment).
Permanent endowment is a complex area and it may be that, as charities plan ahead, now would be a good time for trustees to understand whether or not they hold permanent endowment, what they can do with it now and what they may be able to do with it when the new Bill becomes law.