COUNCIL

 

Subject:        Charities Bill

 

Origin:           Registrar and Bursar

 


During his report to Council’s July 2004 meeting, the Vice-Chancellor alerted members to the possibility of the University losing its ‘exempt charity’ status.  That possibility has become much stronger in the intervening months.

 

The University has charitable status by virtue of the Charities Act 1993 and there is no suggestion of losing it entirely.  But its status as an exempt charity means that it is not regulated by the Charity Commissioners; insofar as regulation for this purpose exists at all, it is carried out by HEFCE.

 

The Charities Bill proposes that universities lose their exempt status and become regulated in the same way as other charities.  However, it seems highly likely that the regulation will be carried out by HEFCE and not the Charity Commissioners. 

 

Opinions differ on whether such a development should be welcomed or not and how HEFCE might proceed.  The main advantage of HEFCE is its knowledge of how universities work and its remit to encourage them towards best practice in such areas as corporate governance, value for money and the like.  But HEFCE acting as regulator is also seen as being in potential conflict with its role as funder of universities and its remit to deliver the Government’s agenda through the institutions it funds.  The Charity Commissioners, whilst more independent than HEFCE, are unlikely to be as much in sympathy with universities’ objectives and practices.

 

Assuming HEFCE does become the regulator, the pinch is likely to come when  activities not funded by their grants are reviewed.  HEFCE may feel obliged to apply the ‘public benefit’ test to all our activities, however funded.  Some activities in the intellectual property area seem likely to be questioned, along with some of the more entrepreneurial activities of some departments, despite the fact that another arm of Government is actively encouraging them.  Since our endowments are not large, inspection of their use will not be the worry it is for some older institutions.

 

We will monitor developments as the new Bill proceeds through Parliament.