Commentary on provisions of Act Section 10: Power to disqualify from being a trustee
Section 10 inserts four new sections (181A, 181B, 181C and 181D) into the Charities Act 2011, and makes some other consequential changes.
	New section 181A provides the Commission with a power to disqualify a person from being a charity trustee and in a senior management position in a charity. It sets out the criteria that must be met for the Commission to make a disqualification order. To make a disqualification order the Commission must be satisfied that one or more of the listed conditions A to F is met, that the person is unfit to be a charity trustee (either in relation to charities generally or a particular class of charity to be specified in the disqualification order), and that making the order is desirable in the public interest to protect public trust and confidence in charities.
	The Minister for the Cabinet Office may vary the list of conditions by regulations (new section 181A(8)) which would be subject to Parliamentary debate and approval before they could be made (section 10(5) to (8)). The Minister is required to consult if the regulations add a new condition.
	New section 181B inserted by section 10 provides that a disqualification order must specify the period of disqualification, which can be up to 15 years, but must be proportionate having regard to certain matters. It also provides that a disqualification order can only take effect after the period for lodging an appeal to the Charity Tribunal has expired without an appeal being lodged, or where an appeal is lodged when it is either withdrawn or finally determined by the Tribunal. The right of appeal against the decision to make a disqualification order is provided in section 10(9).
	New section 181B also provides the Commission with a power to suspend a person from being a charity trustee once it has served notice of its intention to make a disqualification order against that person. The suspension would be for up to one year, extendable for up to a further year. The suspension would be subject to periodic review by the Commission (new section 181B(7)). Whilst suspended the person must obtain the Commission’s approval before taking up any charity trustee position (new section 181B(10)). The suspension lasts until either the Commission makes a disqualification order, it gives notice of its intention not to make such an order, the period of the suspension expires, or on review the Commission considers the suspension should be discharged.
	A person subject to a disqualification order would be subject to the same criminal consequences (section 10(3)) and civil consequences (section 10(4)) as a person disqualified under section 178 Charities Act 2011.
	New section 181C sets out the process for making a disqualification order. The Commission must give a person at least one month’s notice of its intention to make a disqualification order, and invite the person to make representations. If the person is known or believed to be a serving charity trustee, the Commission must also give notice of its proposals to the other trustees of the charity, and must give public notice of its proposals unless it considers doing so is unnecessary. The Commission must take into account any representations received during the specified period. Where a charity for which the person is a charity trustee comes to light after the specified period, the Commission need not specify a further period for representations, but would still be required to notify the other trustees of the charity. Where the Commission makes a disqualification order in respect of a person it knows or believes is a serving charity trustee, it must send a copy of the order and statement of reasons to the charity (in the case of a corporate structure) or its trustees (if unincorporated).
	New section 181D provides for the variation or revocation of disqualification orders. It enables a person who is the subject of a disqualification order to apply to the Commission for the order to be varied or revoked, and provides a right of appeal to the Tribunal against a decision of the Commission not to vary or revoke a disqualification order.
	The flow chart at Annex A, which has been developed with the Commission, sets out how it the section 10 disqualification process would operate. During the passage of the Bill the Commission published draft guidance on how it proposes it would exercise the disqualification power, which will be updated and subject to public consultation prior to implementation. The draft guidance details the matters that the Commission would consider in exercising the proposed power. It also sets out the other limitations that would apply to the Commission in exercising the proposed power, including: that exercising the power would have to further the commission’s statutory objectives and functions, and that the Commission would have regard to the principles of best regulatory practice (under section 16 Charities Act 2011) and be proportionate, accountable, consistent, transparent, and targeted only at cases where action is needed.