Following the passing of the Charities (Regulation and Administration) (Scotland) Act 2023 last year, the first set of changes are due to come into force on April 1, 2024. The legislation introduces significant updates to charity law in Scotland, marking the first major overhaul to regulation in the sector since 2005. The new legislation updates and enhances the regulatory capabilities of the Office of the Scottish Charity Regulator (OSCR), aligning some aspects more closely with the legal frameworks in England, Wales, and Northern Ireland.
Here's a summary of the key provisions and the new powers granted to the OSCR that are coming into effect on April 1:
Power to Issue Positive Directions to Charities (Section 17)
Expanding from its current limitation of only being able to direct charities on what not to do, the OSCR will now have the authority to compel charities to take specific actions following or during investigations.
Power to Investigate Former Charities and Trustees (Section 15)
The OSCR's oversight will continue even after a charity has been wound up or a trustee has stepped down, ensuring accountability and preventing evasion of potential disqualification actions for past trustees.
Power to Appoint Interim Trustees (Section 8)
In situations where there is a deficiency or absence of trustees, potentially jeopardising the charity's operations, the OSCR will be able to appoint interim trustees to facilitate positive outcomes for the charity. This could to allow the charity to operate whilst trustee recruitment is undertaken, the charity is wound up or merged, etc. merger.
Power to Remove Non-Compliant Charities from the Register (Sections 10-12)
Starting April 1, 2024, the OSCR be notifying and potentially removing charities from the register if they fail to submit their accounts within nine months of their financial year-end, ensuring transparency and accountability in the use of charitable funds. Charities will have 3 months in which to comply with a notice warning them they may be removed from the register.
Power to Refuse Registration for Lack of Connection to Scotland (Section 18)
Charities with no or minimal connection to Scotland, judged by factors like the presence of a principal office or charitable activities within Scotland, may be refused registration, emphasising the importance of a tangible link to the community they serve.
Further changes which will come into effect later in 2024 and into 2025 include the creation of a public register of disqualified trustees, a publicly accessible register of trustees, and the extension of grounds for automatic disqualification of charity trustees to include further criminal offences, alongside extending disqualification powers to senior charity managers. The latter enhancement reflect a broader recognition of the significant roles and responsibilities held by those in governance and management positions within charities but who are not trustees.
This legislation introduces a more robust regulatory framework for the Scottish charity sector, aiming to improve governance, accountability, and transparency. It is important for those advising charities and charity trustees to be aware of these changes to ensure compliance and leverage the protections and frameworks designed to support the integrity and effectiveness of charities operating in Scotland.
