Speaker - Andrew Hind

Thank you for inviting me to take part in this panel.

I won’t be re-covering any of the ground covered by Suzi and Rosie Chapman at your symposium earlier this Spring. What I want to do today is to outline the way forward for the production of our public benefit supplementary guidance for charities which charge fees; explaining the process and timetable, the public benefit requirement in action and, importantly, outlining the role we believe the ISC can play as we move forward to implementing the public benefit requirement in 2009.

First, the timetable. There are twenty eight working days left before our consultations on draft supplementary guidance for charities advancing education, and those which charge fees, close. Compared to the almost overwhelming volume of responses we received to the consultation on the general principles of public benefit, we have not been inundated so far, but it’s still too early to predict what the final level of response will be. Previous experience, however, indicates the bulk of responses to a consultation of this nature come towards the end of the consultation period and, if the level of interest in the subject matter is any gauge then we can expect a high level of response. I hope this is borne out in the coming weeks.

Not least because of the relatively high number of queries from charitable independent schools asking when we will have concrete examples available for them to consider in the context of their own organisations. We have always said that these ‘in-practice’ examples can only come from the sector. We are also aware of the negative impact so much of the media coverage around this issue will have had on many independent schools. So, this week, I’m writing to the Head of every charitable independent school explaining what the public benefit requirement is about and asking them to contribute their ideas and examples to the consultation. This is part of our commitment to ensuring our final supplementary guidance on public benefit for charities which charge fees and those which advance education incorporates the experience of delivering public benefit on the ground. I very much hope those present will respond.

It’s important not to lose sight of the fact that the public benefit reporting requirement is not something you are experiencing in isolation; but something that encompasses the entire charitable sector. When these consultations close on July 11, we will have completed the consultation phase of no fewer than four separate sets of supplementary guidance. In addition to that for charities advancing education and charging fees, we have also been consulting on guidance for those set up to advance religion and relieving poverty.

Bearing in mind our previously somewhat optimistic timetable for finalising the general guidance I’m not going to create any hostages to fortune today. Much will depend on both the volume of responses we receive and the nature of them. The high quality and sound thinking we saw in response to our first consultation required us to devote serious, and sufficient, resource to incorporating many of the points raised into the final general guidance. It is realistic to anticipate the need to do so with this round of responses, not least in subjects which are particularly likely to generate diverse opinions, such as in the case of charities set up to advance religion.

However, the dates contained in legislation are not moveable feasts. The public benefit provisions in the Charities Act 2006 came into effect this April. From late March next year, charity trustees will start reporting on their charities’ public benefit as part of their Trustees’ Annual Report. As outlined in our indicative timetable, we are committed to publish the final versions of all five sets of supplementary guidance by the end of this year.

From late March 2009, we will start to see the public benefit reporting requirement in action. We have already said we don’t expect reporting to spring, fully-fledged and finely honed from day one. Those of you, and I know there are many, who have put the time, thought and analysis into action in advance will inevitably be better equipped to report on their public benefit than those which have not. But those whose mind-set has been more resistant will be able to benefit almost immediately from the efforts of those who took the active decision to engage in the process, in practice and in principle, and learn from them.

In addition to the publicly available nature of Trustees’ Annual Reports, we will be disseminating best practice examples in a range of ways. And, given the diverse nature of the charitable independent school sector, these examples will involve schools across the economic spectrum – from those with large resources to those with virtually none. We have long stressed the importance of a proportionate approach to public benefit for all charities and this is likely to be particularly apparent when it comes to schools. I hope the visible evidence of public benefit demonstrated by organisations of all sizes here may prove the final nail in the coffin of the myth that all schools, regardless of capacity, can meet the public benefit requirement in only one way.

But we are realists. We know there will be some trustees who will not feel able to report on the public benefit they deliver as meaningfully as either they, or we, would wish. Let me be clear here; there is a difference between organisations who find it difficult to convey their public benefit in their Trustees’ Annual Report and those organisations whose aims are not being carried out, sufficiently, for the public benefit,  to justify their charitable status. The former, as I’ve said, will have much to learn from best practice examples. The latter may need more fundamental support from the Commission, and from member organisations such as the ISC, to look again at how they are carrying out their aims and think more imaginatively about how they can ensure they provide sufficient opportunities for people to benefit from them directly – including people in poverty and those unable to afford the fees.

This is not a one, two or even three strikes and you’re out exercise. No organisation will wake up one morning to find it is no longer a charity. The Commission has a fundamental responsibility to ensure that charities meet their public benefit obligations, even though the means by which they do so are the responsibility of their trustees. Culls of the Register are not on anyone’s agenda.

We, by which I mean both the Commission and all registered charities, have three years to deliver the public benefit provisions in the Charities Act, after which time Parliament has asked for a review of the Act to assess how well the provisions are being met and how effective our mechanisms to deliver them are in practice. The flexibility of the current provisions are, we feel, the appropriate framework for trustees to explore and deliver public benefit. The Commission doesn’t believe, any more than the ISC, that Government imposition of more stringent direct requirements is desirable. We therefore have three years to get it right, together.

Which leads me directly to the role that bodies such as the ISC is well placed to fill as we move forward. When we talk directly to schools, they are not only reassured by the realities of the public benefit requirement but often very confident about the range and scope of ways in which they will meet it, either by virtue of work they are currently undertaking or by work in progress. But, realists again, we know that the organisations who ask us to meet them are those which have already engaged with the concept of public benefit. There are many more who may be anxious and uncertain, convinced the only way they can meet the requirement is to provide free places, because that’s the only option they read about in the papers.

With over 1,300 members, the ISC is in a unique position to open up channels of communication to these schools – providing clarity, encouraging them to speak to others in their position, pointing them in the right direction to explore the range of options and best practice available to them.

It is, of course, the Commission’s role to provide guidance on how to meet the  requirement and to disseminate good practice. But the ISC has a vital and complementary part to play in this. You have a hotline to your members, you exist to represent their interests, deal with their concerns and answer their questions. Encouraging all your members to stay up to date with developments and share best practice and solutions is a pivotal part of raising standards across your sector when it comes to the public benefit requirement – helping many members move from a state of ‘unconscious competence’ to ‘conscious competence’.

At a conservative estimate, at least 75,000 Trustee Annual Reports are submitted to us each year, and with finite resources, separating the best from the rest will be, to say the least, a significant challenge. We will, to a large extent, be reliant on our strong and growing partnerships with a range of member and umbrella bodies, such as the ISC, to help us both find, and disseminate, the strongest examples of public benefit reporting. We are currently in the process of identifying additional partners across key sub-sectors with whom we can work to more specifically target this information.

We will also be adding to the range of supplementary guidance we produce year-on-year to build a library of examples and principles for charities set up to promote a whole range of charitable purposes. All that we learn from the sector along the way will be fed into future guidance for charities to apply to their own circumstances and activities.

From next year, we will also be conducting a number of initial public benefit assessments to identify best practice, any likely problem areas and establish some base levels for public benefit reporting. Given our proportionate approach, it’s likely we will focus on charities above a certain income threshold. We are currently developing our thinking on how we will undertake these and may be asking for volunteers among you in due course, as my forthcoming letter highlights. As always, we’ll make sure fuller details of the assessment process are made available as we develop them.

It’s been a long haul, and an often hotly-contested one, but we now see our way clear to the end of the beginning. I’ll end my opening remarks today with thanks to those of you who have already contributed to the consultation process and encouragement to those of you who haven’t, to consider doing so. It is, after all, an unprecedented opportunity to help define what makes each of the organisations you represent, a charity.

Thank you.