14 July 2010

The Public Services Reform (Scotland) Act 2010 received Royal Assent earlier this year and will make number of changes to the Charities Act, either on 1 August 2010 or thereafter (as noted below), including:

• Web pages on a website operated by or on behalf of a charity must state that the organisation is a charity. Therefore, what has been, to date, good practice will become, from 1 August 2010, a legal requirement.
• Charity reorganisation schemes are to include from 1 August 2010 a new reorganisation option –administrative efficiency. However, such a reorganisation scheme will not be approved where the proposals are not consistent with the spirit of the current constitution.
• Reorganisation of restricted funds may be applied for, subject to satisfying OSCR that (1) certain statutory conditions are met, (2) the reorganisation allows the funds to be applied to better effect and in a manner consistent with the constitution and (3) the charity is unable to ascertain the donor's wishes (no date is available yet for when this change will take place).
• Appointment of charity trustees can be made by OSCR, on application from 1 August 2010, where the charity has insufficient trustees to appoint a new trustee under its constitution.
• Trustee indemnity insurance will be specifically allowed from 1 August 2010, subject to particular exclusions. For example, a charity will not be able to insure against trustees' liabilities for fines imposed in criminal proceedings.
• Directions to charities that are facing removal from the Register: OSCR powers to vary its own directions will be clarified from 1 August 2010 and such directions will be brought within the category of OSCR decisions that may be open to appeal to the Scottish Charity Appeal Panel.