A new Bill, the Charities (Regulation and Administration) (Scotland) Bill ("the Bill") was introduced to the Scottish Parliament on 15 November 2022. If passed, the Bill will make significant changes to charity law in Scotland as it seeks to strengthen and update the current legislative framework. The Trusts and Succession (Scotland) Bill, which was introduced to the Scottish Parliament on 22 November 2022, will affect charities that are trusts. The process outlined below applies equally to that Bill.
Charity law in Scotland has not been significantly amended since the Charities and Trustee Investment (Scotland) Act 2005 was enacted. The stated aim of the Scottish Government in introducing the new Bill is to update the current system of charity regulation by improving transparency and accountability. It is not intended to be a complete review or reform of charity law, but rather to enhance the measures that already exist. If passed, it would make a number of amendments the 2005 Act and would notably:
- give the Scottish Charity Regulator ("OSCR") wider powers to investigate charities and charity trustees;
- amend the rules on who can be a charity trustee or a senior officer-holder in a charity;
- increase the information that OSCR holds about charity trustees;
- update the information which needs to be included on the Scottish Charity Register; and
- create a record of charities that have merged.
How a Bill becomes an Act
Now that the Bill has been introduced to the Scottish Parliament, it must complete a number of stages in Parliament and receive Royal Assent before it can become law.
The Bill is currently in the introductory stage of the legislative process. The Scottish Government has presented the Bill to the Scottish Parliament with a number of accompanying documents which provide additional information about the Bill. These are:
- a Financial Memorandum, which sets out the expected costs of the Bill;
- Explanatory Notes, which explain the legal effects of the Bill;
- a Policy Memorandum, which explains why the Bill is being proposed;
- a Delegated Powers Memorandum, which sets out the powers that the Bill would give to the Scottish Ministers to make regulations and guidance under the Act; and
- a statement on legislative competence, which confirms that the Scottish Government believes that the changes to the law are changes that the Scottish Parliament has the power to make.
A Keeling Schedule has also been published alongside this Bill. This a document which shows how a Bill will change an existing Act by showing the proposed amendments marked up on that Act. A Keeling Schedule is rarely provided with Bills that are introduced in the Scottish Parliament but may be used when extensive amendments are being proposed to existing legislation. They allow the public and decision makers to clearly see the effect that the proposed legislation will have on the original Act. In this instance, the Keeling Schedule shows the effect that the Bill will have on the Charities and Trustees Investments (Scotland) Act 2005.
Stage 1 – general principles
Stage 1 occurs once a Bill has been introduced. At this stage a Bill is assigned to a lead committee, usually the committee whose remit most closely relates its subject. The Bill has yet to be assigned to a committee but when it is, the committee will examine the Bill and will hear evidence from experts, organisations, and members of the public about the changes that the Bill will make to charity law and the effects such changes will have. The committee will write a report based on this evidence and will make a recommendation about whether the Bill should be supported by Parliament.
Parliament will then debate the Bill and decide whether it should be rejected or progress to the next stage.
Stage 2 – amendments
If the Bill progresses to Stage 2, MSPs will be given the opportunity to propose changes to the Bill, which will then be debated and decided on at a committee meeting by the committee members. If any amendments are agreed at Stage 2, an amended version of the Bill will be published.
Stage 3 – amendments, debate and final vote
Stage 3 is the final stage before the Bill becomes an Act. MSPs have another opportunity to suggest amendments which are then debated and voted on in Parliament. There is then a final vote on the Bill. If the Bill is not passed, it cannot become law. If it is passed, it will be sent for Royal Assent
Turning the Bill into an Act
A Bill that has been passed in the Scottish Parliament is usually sent for Royal Assent after approximately four weeks. When the King formally approves a Bill, it becomes an Act of the Scottish Parliament (assuming no legal challenge to its competence is taken before Royal Assent). Provisions within the Act will determine whether it comes into force on the day it receives Royal Assent or on a future date.
This is the first update in a five-part series in relation to the charity law reform.
If you have any queries as to how either Bill will affect you or your organisation, please contact Kenneth Pinkerton, Christine O'Neill KC, or your usual Brodies contact. Please see part two, part three, and part four of our series.