ONE little-reported story that I missed was that the Government is holding a consultation to review the administration of charities and relevant legislation in Northern Ireland. The lack of accountability in this area has been one of my bugbears for a few years, so while welcome, it’s very, very late in the day and seems to have been prompted by an IMC report. But will a UK-style Charity Commission be enough to take on the scams in Northern Ireland? The Irish Government has also promised to examine the issue, though I’ve seen nothing. Cross-border co-operation would seem the sensible way to go towards enhancing accountability and preventing fraud.Social Development Minister John Spellar said:
The current framework for the regulation of charities in Northern Ireland does not provide for any form of local registration or enforcement. My Department is proposing that new Northern Ireland charities legislation should be brought forward to introduce an integrated system of registration and regulation (including control of charitable fund-raising) as well as supervision and support of registered charities.
The aim of these proposed changes will be to provide a structure and process through which charities can demonstrate their contribution to society, the public can be assured regarding how charities are spending any donations and government can assist in the better governance of the charity sector.
In its third report, the IMC stated:
We have been struck by the limited controls over charities in Northern Ireland. We have heard frequent allegations that this has facilitated the activities of paramilitary groups by making possible the illicit use of money and the diversion of funds obtained from crime.
It is difficult to know whether and to what extent such a problem exists, either generally or in relation to paramilitary groups. However, reasonable suspicion is aroused by the fact that about two years ago of over 3,500 charities which had approached the Inland Revenue from the Belfast area, only 40% had subsequently made gift aid or other tax claims. We are anxious not to draw specific conclusions from these figures, especially because we know that the charitable sector in Northern Ireland is not identical to that elsewhere. Nevertheless, the low follow-up rate means that 60% had a response from the Inland Revenue in the form of a letter bearing a reference number and accompanying material and had then done no other charitable business involving tax. In some cases this letter could be used for the purposes of passing off an organisation as a new charity, for example in opening a bank account. There is no doubt a natural rate of attrition, when people hope to start new charitable work but fail to do so, or they do so without wanting to claim tax relief. The figure of 60% is nevertheless high. It tends to lend credence to the view a number hold that charitable status is abused by some, and that it may be a channel for the misuse of paramilitary funds.
We welcome the fact that the British Government is undertaking a review of the control of charities in Northern Ireland which encompasses the question of the establishment of arrangements comparable to those elsewhere in the UK.
We are sure that stronger controls should be established, in the interests of ensuring that paramilitary funds cannot be illicitly diverted, including possibly to political parties. Charities in the South are also unregulated. The Irish Government has undertaken comprehensively to reform the law and following extensive public consultation legislation is being prepared. The two jurisdictions are in communication about their respective proposals. Again we welcome this. We would request the two Governments to keep us advised on their progress in this area.
(PS: The IMC website could do with some work. A proper search facility would be good for start, if anyone’s listening.)