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Charities Act Review – university constitutions

July 21, 2012

Lord Hodgson of Astley Abbotts has now published the report resulting from his statutory review of the 2006 Charities Act.

I have not had the chance to read it in full but I did seek out ‘Appendix A: Technical Issues’, which covers charities with Royal Charters (that is, all pre-92 English universities).

1. Royal Charter charities currently require the approval of the Queen in Council to change their Constitutions and the Privy Council to amend their bye-laws. This process can often take significant periods of time and involves a great deal of consultation with the Charity Commission and wider Government. To streamline this process and relieve some of the administrative burden on all involved, the Queen in Council could be invited to consider the following changes:

a. Power to approve changes to the constitutions of Royal Charter charities should be delegated to the Charity Commission, with a requirement that notice of the change is given to the Privy Council;

b. Powers to approve changes to bye-laws should be delegated to the trustees of the charity, with a requirement to notify the Charity Commission and Privy Council; …

These passages should be read alongside paragraphs 4.35 & 4.36 of 2o11’s HE White Paper (and chapter 5 of the accompanying ‘technical consultation’). Making it easier to change corporate form in the fashion suggested by Lord Hodgson is part of a trend to make universities increasingly independent of the state.  The processes described are not simply about cumbersome ‘consultation’ but about democratic oversight: what part do the public and its representatives in government have to say about these kind of changes? (And, yes, this may take time. And, we probably do need to have a debate about what the significance of a Royal Charter is under contemporary conditions.)

That said, higher education institutions in the main are exempt charities (there are about  seventeen registered) so this would in effect be seeking to pass this particular oversight from parliament to Hefce (or simply the board of governors or equivalent in the case of b). Not particularly encouraging or transparent if Hefce’s reluctance to comment on particular cases is anything to go by.

The second paragraph of Appendix A moves on to statutory corporations: the former Polytechnics (ex-ILEA excepted) and other ‘higher education corporations’ as set out in the 1988 Education Reform Act.

2. Parliament could be invited to consider similar changes to the rules applied to statutory corporations, in order to maintain regulatory oversight while minimising the burden on Parliamentary time. (my emphasis)

HECs are quasi-public and this paragraph masks a form of privatisation which would erase the Secretary of State’s responsibilities here.

In piecemeal fashion we are moving towards a model for higher education as a regulated sector in which independent companies operate.

Whether you favour that model or not, we appear to be moving towards it in an undemocratic manner. (Although the changes suggested by Hodgson would probably proceed through primary legislation, what they represent is not being set out openly).



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