 Good morning and welcome to the seventh meeting of the Social Justice and Social Security Committee. We have apologies today from James Dornan and I welcome Evelyn Tweed who will be a substitute today. Before we move on to our first item of business, I just want to advise that the committee has received responses to its letters concerning warrants to install prepayment metres. These have been published on the committee's website under correspondence and the committee will consider its next steps as part of its work programme. On to agenda item 1, our main item of business today is our final evidence session on the Charities Regulation and Administration Scotland Bill. The bill aims to strengthen and update the current legislative framework for charities by increasing transparency and accountability. It also aims to make improvements to Oscars powers and bring Scottish charity legislation up to date with certain key aspects of regulation in England, Wales and Northern Ireland. In the last two weeks, we heard from witnesses representing charities, charity regulation, law, academia, accountancy and audit. Today, we conclude our evidence sessions with Shona Robison, Cabinet Secretary for Social Justice, housing and local government. Apologies. Welcome to the meeting, Cabinet Secretary, and welcome to the officials also joining us in the room today. We have Caroline Monk, Head of Charity Law, Melissa Smith, Charity Law Policy Manager, Rebecca Reid, Solicitor and Megan Stefaniak, Solicitor Scottish Government. I just want to mention a couple of quick points about the format of the meeting before we begin. For members attending remotely, if you could please wait until I say your name before speaking. For colleagues in the room, please indicate to myself or the clerk if you wish to come in and ask a supplementary question. Members online should also use the chat box or the WhatsApp. I will now invite the cabinet secretary to make a short opening statement. Thank you. Good morning. Thanks very much, convener. I'm delighted, although I'm a bit hoarse, to have the opportunity to speak to you about the Charity's Regulation and Administration Scotland Bill. The committee will be aware from your evidence session so far that there is significant support for this bill and for the modernisation of Scottish Charity Law. The bill is built around proposals put forward by the Scottish Charity regulator, Oscar, based on its operational experience since the 2005 act came into force. In addition to the Oscar proposals following engagement with Oscar and the Law Society of Scotland, the record of charity mergers at section 12 and a list of minor or technical amendments to the 2005 act were also added to the bill. The bill was delayed due to the pandemic, so I'm pleased that we're now able to progress with it. The bill covers a range of different provisions designed to enhance the existing framework. Each of the provisions falls under one of three primary aims, which I'll briefly mention. First is increasing transparency and accountability in charities by improving public access to information about a charity's operations. The bill requires Oscar to publish the accounts for all charities and to include the names of charity trustees on the Scottish Charity Register. Oscar will be able to maintain a schedule of charity trustees' details for its own internal use and provide a publicly searchable record of trustees who have been removed from office by the courts. The second aim provides stronger powers for Oscar, including the power to issue positive directions to help charities address regulatory issues. The bill gives Oscar a new power to issue positive directions to charities in addition to the existing powers to issue preventative directions that also allows Oscar to conduct inquiries into former charities and their trustees. Oscar's powers and duties in connection with the register are enhanced by enabling Oscar to remove a charity from the register where it fails to provide accounts and is unresponsive to attempts from Oscar to make contact. In addition, there is a new provision that requires Oscar to refuse to enter an applicant charity onto the register where it considers that it would not be appropriate to regulate the applicant because it has no connection or only a negligible connection to Scotland. Oscar is also empowered to appoint interim trustees to a charity in certain circumstances, for example, where the charity has no trustees or the existing trustees cannot be found. Further, the bill makes some adjustments to Oscar's processes around gathering information and connection with inquiries in order to make them more streamlined and deficient. Thirdly, the bill brings Scottish Charity law up to date with some key aspects of charity regulation in England, Wales and Northern Ireland, enhancing public trust in charities and further protecting charitable assets. That is through updates to the criteria applying to the disqualification of charity trustees and the extension of disqualification to individuals employed in charities who exercise senior management functions. The bill enhances protection for charitable assets through the creation of a record of charity mergers and a new provision of redirecting legacies from a charity that has merged and ceased to exist to the charity that it has merged with. The bill makes practical improvements and updates to existing charity regulation in the role of Oscar and that is what we consulted on pre-pandemic that we are taking forward. There is also, I believe, a need for a broader review of the future of charity regulation, which is why I have committed to begin a wider review of charity regulation following the passage of this bill and will ensure that we engage with the charity sector on the scope of that review. We will now move on to questions. Our questions will, of course, be directed to yourself, but you are welcome to invite any official to respond should you wish to do so. We have a lot of questions this morning, so I would just be very grateful if answers could be kept as brief as possible. To kick us off, I will move to Pam Duncan Glancy. Thank you, convener, and good morning to the cabinet secretary and to the officials joining her. Last week or two weeks ago we heard from a third sector organisation that the proposals that have been consulted on were developed at the very beginning by Oscar and the Scottish Government without input from the SCV or the third sector. The process has been very much focused on proposals favoured by the regulator. I think that that speaks to the increasing calls for a wider review. What is her response to that quote from an organisation in the sector? In terms of the wider review of the charity sector, I acknowledge that there is an appetite for that, but I think that it was important to move forward with some of the technical aspects that had already been consulted upon that we were ready to move forward with. I think that what will be important once the bill is completed through parliamentary processes is that we begin to scope with SCVO and the sector more widely what that wider review should look like. There will be varying views on the scope of that and what should be covered. I am open-minded on that. I think that the role of SCVO is going to be critical. I have discussed this directly with SCVO as you can imagine they have raised it with me directly. Parliament will have a view, the committee will have a view as well around the scope of that. Given some of the aspects that have been delayed somewhat because of the pandemic, it is important to get this bill progressed and then we should look at that wider review. If that wider review throws up the need for further legislation, it remains to be seen. I am open-minded on that scope. On that basis, would the cabinet secretary be prepared to consider further legislation if that were the outcome of such a review? Clearly, if the outcome was required, that could be secondary legislation or primary legislation. I think that we should be open-minded. Clearly, we need to wait to see what comes out of that review. If the review concluded that there was a need for change that, in turn, required legislative change, we would have to consider that. We would have to look at where in the parliamentary schedule that would be possible to do so. At this moment, I am fully open-minded. Is the review something that you consider that could be independent for the review? A number of organisations did say to the committee that they felt that review should be independent. Are you prepared to consider that? Again, I am open-minded on that. I think that there are pros and cons around that, but I am open-minded and I have not come to any fixed view on that. I think that that is open for further discussion and consideration. On the point of the review, how would the minister intend to involve smaller charities in that review? The third sector interfaces might be a good starting point in terms of their reach into some of the smaller charities. It is important that we make sure that we do. That would be very much on my radar. The TSIs would be a good mechanism to do that and others, but they would probably be the first protocol. On a further point, witnesses have also suggested that a proposal from their original consultation allowing the reorganisation of charities established in Royal Charter was not in the bill, and an option would be to clarify legislation and make that clear that perhaps Oscar could approve the reorganisation of such schemes. Is that something that you would consider in this or in future legislation? Could this bill introduce measures to help simplify the process for a charity wishing to change its status to a Scottish charitable incorporated organisation? A specific process for incorporation or change of legal form does not form part of the bill and has not been consulted on, as you know. Creating a bespoke process for an unincorporated charity to become incorporated, usually by becoming a skeo, would require some extensive consultation with the sector, especially small charities and those who have already been through the process. We probably want to explore that in the wider review and capture that. I understand that there are benefits to charities becoming a skeo or a company not least being able to access secure funding streams, being a key one and having limited liability etc. I guess the problems that charities can face when going through the incorporation process are largely outside the remit of charity regulation and the Oscar process. There are probably two provisions in the bill that would assist charities wishing to incorporate. I do not know if Carly wants to say more, but the record of measures and the schedule to the bill contains a provision that allows for duplicate charity names as part of the merger. I do not know whether you want more detail on that, but I think that the main point is something that we would want to consider as part of the wider review. As the Cabinet Secretary said, there are two provisions in the bill that would assist charities looking to incorporate. The first is the record of mergers. One of the things that can put charities off incorporation is actually because the process of incorporation is starting a new charity and closing down the old charity and transferring everything across. One of the issues that charities have raised is the matter of legacies and lost legacies with the old charity having to close, so the record of mergers will take away that particular issue. Another thing that can be quite off-putting for charities is because they have to set up a new charity. Charity law requires that you cannot have two charities with the same name on the register, so the new charity has to have a different name from the old charity, essentially, at least for a period of time. The technical provisions in the schedule mean that, when it is part of an incorporation process, it will be allowed to keep the same name, which is very important to a lot of charities. I have a small question. Do you believe that enough small organisation has been consulted during that period? Throughout the whole process of consultation, do you believe that there are any areas of regulation that have not been consulted during that period? I do think that there has been extensive consultation, including a number of small organisations. It has been the subject of two 12-week consultations and there is a total of over 400 written responses, including bodies of all sizes. In terms of whether there are things that have not been included in the bill, I guess that comes back to that wider review. It is not that there is scope to consider those as part of the wider review, but what I want to do is to take the time with the sector, including the small organisations, to scope out what that would cover. There are differing views about what a wider review could cover. It would be important to have a full, open discussion with all aspects of the sector, the large organisations and the small ones. I want to declare my interest. I am a chair of the Edinburgh Lodian Regional Quality Council, which is a registered charity organisation. A further supplementary from deputy convener Emma Roddick. Thank you, convener, and good morning to the cabinet secretary. We did take evidence from Bordna Gallach a few weeks ago who were keen to know whether there could be scope for a charity's Gallach name to be included on the register alongside the English name. Is that something that should be open to looking at? As I understand it, Oscar already includes Gallach Charity names on the Scottish Charity register, where that is requested by the charity. I guess the question is whether the entire register could include Gallach versions of every charity name. I think that it would be a matter for Oscar, to be honest, and one that they would need to consider really as an independent public body in terms of its duties and resources, but it is possibly something that you might want to raise directly with them to see if they would be willing to consider that. Thank you. Good morning, cabinet secretary and panel. It is moving on to the general principles of the bill. One of the general principles, of course, was trying to look around about improving transparency and accountability. I just wanted to ask a few thoughts before the bill came forward. Were there any weaknesses that needed to be addressed at that particular time? What actions have now been taken to address those? I think that probably I set out in my opening remarks one of the overarching aims of the bill is to increase transparency and accountability in the charity sector. I think that responding directly to the views of the public in Oscar surveys and being able to see how a charity has spent the donations that it received and who has made those decisions is a key element in increasing public trust. Going back to the provision set out in the bill, particularly things like publishing charity accounts and providing the names of trustees on the register, will help to provide the increased transparency and accountability that the public are looking for. I think that it will also bring information about Scottish charities up to the same standard that is available in other parts of the UK. I think that that is also important. I think that that is a key plank of the bill and I think that it will... Not that there is a major issue with public confidence, I should say, but I think that it is important that anything that can be done to strengthen that public confidence in the donations that they give and the accountability and transparency is important. Just another couple of questions. One was about the actual implementation of the bill proposals and I would not say that I am concerned about how that would be implemented and how the Government would work with the charities in that regard when it was implemented. You would not expect the detail of implementation to be on the face of a bill because that is really where Oscar will want to detail how, as an independent public body, he will implement the new powers and duties. I think that Oscar has said that it intends to produce guidance on various provisions in the bill alongside relevant communication campaigns. I think that Oscar has given evidence to the committee on some of those plans and I know that the bill team is working closely with Oscar on the commencement and implementation plans to ensure a phased roll-out. Probably just important to make the point that the bill does not really make fundamental changes to the way charities are regulated. It is really about enhancing and clarifying the existing regime. Apart from the inclusion of trustee names in the register and providing Oscar with names and addresses of trustees for the internal schedule, most charities will not see a huge difference in how they are regulated. However, communication is going to be important and I think that Oscar has got that well in hand by the sound of it. Just one final question. He touched on Oscar there and Oscar gave evidence. One of the things that he was talking about was what he asked. Was it worthy powers appropriate? Apportionate at that time, I don't know if you have any other comments and that they seemed quite comfortable with additional powers in there but I don't know if there are any other comments you want to add to that one. They are. I met Oscar recently and this is going to be important to him. It is something that they want and it is something that they believe is necessary and proportionate. Eveline Tweed. Good morning Cabinet Secretary and officials. Cabinet Secretary, how might the dispensation mechanism operate and how can it be ensured that it does not act as a deterrent where individuals might have valid reasons for wanting the name withheld from the public register? I know that this is an area that the committee has looked at in some detail. The ability to apply for dispensation from certain information being included in the register is currently provided for in the 2005 act. The bill extends the current dispensation provisions to cover the new trustee information on the register as well. It is already there and it is extending to cover the new trustee information. Oscar will operate the mechanism in the same way that it does now, assessing the information provided on a case-by-case basis. In addition, the bill gives Oscar the power to exclude information from the register of its own accord where it believes the safety or the security of a person or property could be jeopardised without a charity or a trustee. That could be in relation to a specific charity or a type of charity. One that comes to mind would be a woman's refuge, for example. On your second point about deterrent, I think that, first of all, just to stress that the bill does not alter anything about the dispensation mechanism that Oscar has been operating with since the 2005 act. As I said earlier, the bill extends the mechanism to the new provisions. A charity or any of its trustees will be able to apply to Oscar for a dispensation from the name or names of charity trustees being published on the register where, as I say, the publication could jeopardise the safety or security of a person or property. Oscar, as I think, has an established procedure in place under a well-used assessing request for dispensation and working with those applying for a dispensation before information is entered on the register so they know how to do this. The names of trustees are already contained in the charities' accounts and the accounts are already publicly available just by a way of request made to a charity directly as opposed to automatically. The measures in the bill place information on every charity in a single place to enhance access by the public. That is the right balance and does not make a huge fundamental change. What are the implications for charities in relation to their administrative functions of the proposals for Oscar to gather and maintain up-to-date information on trustees, especially those smaller charities that maybe do not have paid staff? How might any additional burden be minimised? That is an important point. What is important to say is that the main additional requirement for all charities will be the provision to Oscar of charity trustee names and contact details, postal and email addresses. That is information that the charities should already hold, so it should not be onerous. The provision of trustee details will take place through Oscar's existing system that charities are already familiar with, so it is not something that is going to be new or strange to them. Importantly, Oscar's data shows that the average number of trustees in a charity is around eight. For many charities providing the name and contact details of trustees, I do not think that that is going to create huge additional burdens and would really be part and parcel of what they would normally do in terms of routine reporting to Oscar. It is important to stress that. There is nothing onerous here. Do the cabinet secretary have any concern that this would disproportionately affect smaller charities, particularly minority charities, that are already struggling to stay in business given the cost of living crisis? No, I do not think so. I think that going back to the points that I have just made in relation to small charities, there is nothing burdensome here. We are talking about providing details that charities will already be familiar with and have information. It is not a huge additional burden. Many charities providing the name and contact details of trustees will not create additional burdens with information that they already have and are used to providing as part of their routine reporting to Oscar. I do not believe that that will give any particular difficulties. In terms of the development, the introduction and the population of the internal schedule of charity trustees, it is likely to take place over two to three years and therefore charities will have significant time to prepare for that specific change. I do not think that it will be onerous. Do you have any concerns regarding the provisions for charities to deduct certain information from published accounts where there might be a safety or security concerns? Given that I was just mentioning earlier about, for example, if there is a concern, the bill does give Oscar the power to exclude information from its register of its own accord where it would have safety or security concerns about a person or a property. If what you are thinking about is an organisation that may have been targeted for whatever reason, then of course Oscar is able to take that into account and do that even without the charity or trustee having to apply first. If Oscar believes that there could be a security risk, then he would have the power to exclude that information. I made the example earlier on of a women's refuge, but I am sure that we could all think of other examples where if a property pertaining to a charity was in danger of being targeted for whatever reason, then that is something Oscar would look at very seriously indeed. I am sure that it will agree that a smaller organisation will probably need more support from the Government and the Government. Can that be provided? Oscar is very aware of the needs particularly of smaller charities and they already recognise that in the way that they conduct their business and what they require of a huge charitable organisation compared to a small local charity is quite different. They have experience of working with organisations of vastly differing scope and size and in terms of those changes I think that Oscar absolutely recognises that it is not that there is anything onurous in this but that the smaller charities may need that additional support or even to be reassured about what is going to be required of them. Thank you very much, cabinet secretary. I am part of a small organisation. Just specifically on the publication of charity accounts, can I ask what the cabinet secretary's views on the suggestion that we have heard of different reporting thresholds for charities depending on their level of income and would there be any merit in raising the threshold above which charities must prepare full audited accounts? Allowing an exemption from the publication of accounts or providing information to Oscar for smaller charities would defeat the aim of ensuring transparency in accountability across the whole sector. Over half the sector have incomes of less than £25,000 and are considered therefore to be small charities so that is a huge part of the sector and an exemption would potentially mean that the public and the regulator would not have access to such a large proportion of the sector. In practice the situation would be very similar to that at the moment as Oscar already publishes the redacted accounts of charities with an income of over £25,000 and financial report to Oscar has already staggered depending on income levels with smaller charities providing less information than larger ones. I was getting that earlier that they already take into account what is required in terms of that financial reporting. It is proportionate to the size of the organisation, as you would expect, a multimillion-pound charity to be required to provide more financial information. In terms of the audit threshold for charities in Scotland and Northern Ireland, it is currently set at £500,000 in England and Wales. The threshold is higher at £1 million, but the view is that £500,000 is right given that there are different incomes. Of charities in Scotland is a bit different from that in England and therefore the view is that that would be an appropriate threshold to remain. Can any detail be provided on how the process of engagement between Oscar and charities that have failed to submit accounts will work? Equally can any assurance be provided that where charities have not submitted accounts due to a lack of resources, skills or knowledge that appropriate support will be provided by Oscar to seek to avoid them being removed from the register where there is that willingness to comply? There has just been an inability to do so. That is an important point. In terms of the new provisions at section 11 to remove charities, the bill provides a bespoke route for Oscar to remove a charity from the register where the charity has failed to provide accounts which are required. The deadline for submission is passed and the charity—this is important on your last point—has not responded to any communications from Oscar. It is not an automatic process, the removal. The power is a discretionary one for Oscar and of course they would take into account all of the information that they have in front of them. The process of removal starts with giving the charity notice of the intention to remove it. The charity then has three months to act. If it makes contact with Oscar in any way during the three months, the process stops. Oscar can use its other powers to ensure that charity complies with its duty to provide a statement of account. I think that there are various points to avoid the removal of a charity. That engagement with Oscar is obviously a key one. If it is either an oversight or problems within the charity that has caused the delay, then those are issues that Oscar would want to work with the charity. It is not in anybody's interest for a charity that is doing good work to end up being removed because of some practical issues or problems that have emerged within the organisation. What are the cabinet secretary's views on how Oscar might communicate with parent charities if there are issues with individual charities not submitting accounts? For example, would it be appropriate for Oscar to communicate with a church body if there are issues with an individual specific church? I think that the committee has taken evidence on this. Oscar already works with umbrella charities or parent charities in cases of non-submitting charities. I have done that for a number of years. Where a charity has failed to provide accounts on time that is shown on the Scottish Charity Register, there is nothing to prevent Oscar from sharing that information with the parent or umbrella charity and working with that umbrella charity to try and ensure compliance by the individual charity. If you take a church body, for example, that is not a designated religious charity. Exactly the same applies in the case of a designated religious charity itself. Its supervisory functions in respect of the individual church would apply and it would be for the DRC to take that forward. I hope that that will give some clarity. I will now move to questions from Jeremy Balfour. Good morning, cabinet secretary. Good morning to your team. That kind of flows on to my first question. You will be aware that the information commissioner has raised some questions in respect to data protection issues. Do you think that those have been addressed sufficiently in the bill or in the light of the evidence? Does there need to be some tweaking? A consultation with the information commissioner's office has been carried out as required by GDPR. As part of the consultation, the information commissioner's office raised some points that were addressed during the policy development stage. The amendments that were made by the bill involved the processing of personal data all operate within the framework of and, importantly, are consistent with GDPR and the Data Protection Act 2018. I think that there is a strong public interest in members of the public being able to easily access charity's financial information and information on those who are doing important work in running charities, given that that involves having responsibility for charitable property and donations from the public. What is important is that the provisions are accompanied by appropriate safeguards in the form of the dispensation mechanisms, as we were talking about earlier, which allow for certain information to be excluded from the register and the statement of accounts, as well as the record of removed trustees, where inclusion of such information is likely to jeopardise safety and security, which we covered earlier on. I think that there would be points to consider rather than concerns that were raised, and I do think that they have been taken on board as I have just laid out. For clarity, do you think that the issues have been addressed in the bill as they are at the moment? Yes, I believe so. I can bring Caroline in in more detail, but I believe so. That consultation with the ICO was at quite an early stage in the process. We are content that those points that were raised have been addressed. The bill provides, as the cabinet secretary said, for the dispensation around safety and security of people and property, and that was the main thing that came out of both the public consultations in terms of data protection but also the discussions with the ICO. If there was a breach, would it be Oscar or the Scottish Government that would be liable for that breach? It would be Oscar because it would be personal data that would be held by Oscar. Oscar is the independent public body, and it has duties and responsibilities currently and going forward in relation to data processing in the same way that any organisation has. In terms of trustee information, Oscar will be the data controller for that information. The bill provides the legal basis for Oscar to process that personal information. In short, it is for Oscar to determine what information is to be collected and the systems used to process that information. If there were to be a data breach, Oscar would be liable, but that is why it will ensure that any other public body has its systems in place to avoid that happening. If I can move on to the issue around interim trustees, this is obviously something that Oscar can now do. Can I just clarify? If an interim trustee is appointed by Oscar, will it be remunerated or is it a voluntary role? If there is costs around that, is it Oscar's liability or is it a charity's liability? First of all, it is important to say that any appointment of interim trustees would be for very much a time-limited measure to safeguard charities. You could think of a scenario where there is a fallout in a charity and they all walk away and the charity's good work cannot continue. Something has to be done to safeguard the work of that charity while other new trustees are appointed. It would be in very specific circumstances and for a very time-limited that that would happen. Interim trustees would not be routinely remunerated. The 2005 act sets out the rules for charity trustee remuneration, starting from the basis that, in general, trustees should not be remunerated for their role as a trustee. However, trustees can reclaim expenses from the charity, for example, the cost of travelling to a trustee meeting. Interim trustees would be able to reclaim expenses from the charity in the same way. I think that that would only be fair, because if you do not put that in place it means that someone who does not have a particularly great income but is serving as a trustee, whether on an interim basis or not, you would not want to put barriers in the way, financial barriers in the way of that person. I hope that that is clarified. Obviously, that will not happen very often, but there is, as we have heard from evidence in previous sessions, a lack of people willing to volunteer at the moment to be trustees. Do you see an issue for Oscar more than you? Do you see Oscar having a bank of people who are ready to step in if required, or how do you expect Oscar to find these people at very short notice? I think that Oscar has indicated themselves that interim trustees positions would be, for example, advertised in the local press, and a recruitment panel would be convened with the assistance of the local third sector interface, SEVO or similar organisation. The expectation that they would have is that TSIs for each local authority area could also hold a list of individuals willing to step in and act as temporary trustees. That seems quite a sensible thing to me. As you see, it will not happen very often, and it just requires an urgent response for a time-limited period. Having that as a backup sounds to me quite a sensible thing. We end up with saying that one person remains a trustee, and Oscar decides that he wants to bring in another couple of interim trustees to keep it going, but that present trustee does not want those who are appointed. There is no appeal mechanism, there is no way—I always say that Oscar can supersede a present trustee's role and appoint interims whenever they—not when everyone—but when it is necessary. What does the charity do if you do not like the trustees who have been appointed? I think that the new power by its very nature is only used in circumstances where there is in effect no one running the charity. If there were concerns with appointments, I would expect Oscar to engage on a case-by-case basis with those raising concerns. If there was an individual that remained and there were no concerns about them continuing as a trustee, I would expect Oscar to work with that remaining trustee to help to recruit on an urgent basis some interim trustees that they could work together with. I guess that if you are thinking of an extreme scenario where the person says that he is not going to work with anyone, then you are then into territory where the person is obstructing the work of the charity and being able to—an unlikely scenario, but it would be then for Oscar to determine the most appropriate route to take in that scenario for the good of the charity. I think that this was touched on in one of your earlier answers to my colleague Pam Duncan. I cannot say, but the provisions of the bill relating to charity mergers are restricted to legacies, while in England it is legacies and gifts. I am just wondering why have we not gone down that road to allow legacies and gifts or to be included in regard to a merger? Our policy intention is to capture those cases where the donor is not able to change where their gift goes because, for example, they are deceased. The record of mergers was included following discussions with the Law Society of Scotland around the difficulties of legacies left. The record of mergers was brought in following discussions with the Law Society of Scotland. It only raised the issue of legacies in wills. The record of mergers was brought in following discussions with the Law Society of Scotland around the difficulties of legacies in wills. As yet, nobody has directly raised an issue with lifetime gifts, but that is something that we can pick up with legal professionals if that is something that is as big an issue as the issue with legacies. It seems to be a cleaner thing, but it is not a negative thing. It seems to be a positive thing, but that is something that we can look at later on. The other question is in regard to the connection to Scotland section. It seems to have received pretty welcome support from all the evidence that we have taken. I wonder if you can say why the bill at the moment does not have an absolute clear definition of what that means, but leaves it open to some interpretation. Is it because it is too difficult to define legally or what was the reasoning behind that? We consider that Oskar's best place to make decisions on what constitutes a connection to Scotland in individual cases. It would be guided by the facts and circumstances of the case, extensive experience as a regulator and the guidance that it will produce on this part of the bill, which it will consult on. It is unlikely to impact the vast majority of charities and those applying to become a charity. Oskar's data indicates that there are two charities out of 25,000, which do not appear to have a connection to Scotland. Oskar's decisions on whether an applicant charity or an existing charity has a sufficient connection to Scotland will be subject to the review and appeal mechanisms already in place under the 2005 act. It is not a huge issue, and I think that leaving Oskar to be able to look at each individual case is a sensible approach. Under the 2005 act, there was an appeal system setting where people could appeal to a tribunal, but that has now changed. Does that tribunal still exist in law and, if it does, should we not remove it from this piece of legislation? I think that you are referring to the Scottish Charity Appeals panel, which was set up in 2005 to have the oversight of some of the decision making. That has been abolished as part of the general reforms to tribunal law that were put in place following the Tribunals Scotland act. The SCAP no longer exists, and its functions and personnel were transferred over to the First Tier Tribunal for Scotland by subordinate legislation. The references to the SCAP in the 2005 act were updated to refer to the First Tier Tribunal instead. We will now move back to questions from Deputy convener Emma Roddick. I have quite a few questions on disqualifications. It was suggested at our last session that there could be scope for a different regime in Scotland that would allow people who would normally be disqualified to act as trustees with certain conditions attached. Does the cabinet secretary have any thoughts on that? The current and the proposed disqualification criteria are based on behaviour or conduct that the Government considers makes a person unsuitable to holding office as a charity. It goes back to the importance of the trustee role and the fact that trustees are responsible for managing money and property donated by the public in good faith. It is recognised that in some circumstances a person may have valuable experiences and expertise to bring to the role of trustee, notwithstanding that they would otherwise be disqualified. Automatic disqualification for bankruptcy is time limited and applies only until the debtor is discharged. On discharge, which can happen quite quickly, in a matter of months in some cases, the disqualification falls away. It is open to anyone who would otherwise be disqualified from acting as a trustee on any of the disqualification grounds to apply to Oscar for a waiver. The existence of the waiver mechanism means that, while disqualification is automatic, it is not absolute and it can be waived at the discretion of the regulator. The existing waiver system and its extension to the new automatic disqualification criteria demonstrates that the law recognises that there will be cases where a person who is disqualified can still hold a trustee or senior management position. On the point specifically of bankruptcy, we did have a number of organisations raise concerns about that. Given that it is an existing criterion, does the cabinet secretary think that there is perhaps a lack of communication, a lack of enforcement? Is the bill likely to mean that people facing bankruptcy are in future treated differently to how they are now? I take your point about whether or not there was an awareness. The disqualification for bankruptcy relates to the period that the bankruptcy is undischarged. Maybe the communication from Oscar will make it very clear that once discharged the disqualification falls away and the individual is free to take up a trustee position should they wish, or they can apply for a waiver. There may be some communication around that process that Oscar needs to be clear. The other point is that even where someone is disqualified it does not stop them volunteering or working with the charity in a role other than the positions held as a trustee so they could have some day-to-day interaction with the charity in a different way. I think that what is going to be important is Oscar's communication around making sure that people understand the current process and the waiver and the opportunity for someone to continue with the relationship with the charity in another role. Does the cabinet secretary think that it would be appropriate to have a different regime in Scotland around bankruptcy or whether that is needed? I think that what is important is what I have set out. I take the point that we want to ensure diversity of experience on charity boards. I think that that is important. What is also important is that the law treats all charities and trustees equally. No position in a charity such as the treasurer or the chair has more responsibility in terms of charity regulation. All trustees are equally responsible for the charity. I would reiterate that a person who is otherwise disqualified can apply to Oscar for that waiver from disqualification. That is an appropriate mechanism for ensuring that disqualification rules are fair and proportionate. That will serve the Scottish charitable sector well. We did hear quite a few concerns about that lack of diversity perhaps being an issue due to the criteria. Does the cabinet secretary share those concerns to any extent? Does she think that the bill, as it is now, provides enough scope to get around that? Well, as I say, I think that diversity is vital. We want charities to be able to draw from people from various backgrounds, but the law needs to treat all charity trustees equally. In terms of whether Oscar would apply a waiver from disqualification, he would have to do that on the circumstances of the case. Obviously, looking at whether or not the person posed a risk or not to the charity, that would be the important thing rather than whether he came from a diverse background. It would probably take quite an objective test to whether or not the person's disqualification and whether they were going to waive it posed a risk to the charity. I think that that would be how Oscar would set up the application of any waiver process. Caroline, if you want to make it a bit clearer than I have. No, I think that you have made it very clear. The starting position is that the automatic disqualification is that because of things that have happened in an individual's life, outwith charity roles, means that there may be not suitable or there may be risks to them being in charge of a charity. In particular, given the amount of public trust that charities have and the fact that the vast majority of charities will get donations from the public and will get support from the public, it is important that the public can trust and have faith and confidence in those individuals. As we have said, diversity and lived experience can be very important parts of running a charity, which is why that waiver mechanism exists as it does and will continue with the new criteria. Does the cabinet secretary have any concerns about the possibility of mistaken identity in relation to the searchable record of disqualified trustees? This is a record of currently around 50 individuals who have been removed from being a charity trustee by the Court of Sessions since 1990 following an application from Oscar or their predecessor. The reason for their removal would be due to serious concerns about their conduct while they were serving as a charity trustee. It is important that charities are able to find out whether a person that they may wish to recruit has been removed by the courts from that same role in the past. I do not believe that this will result in cases of mistaken identity, because if the searcher is unclear as to the identity of an individual, for example if they were searching for Don Smith, they can contact Oscar with further information to establish their identity. A similar search function is already employed by the Charity Commission for England and Wales in relation to removed individuals in that jurisdiction and it works perfectly well. I want to ask a few questions in relation to issuing of positive directions following inquiries. How frequently does the cabinet secretary envisage that Oscar would use new powers around issuing directions? Are there any examples where inquiry work is being hampered by the lack of positive direction giving? On the first question, the new power is not being proposed with a view to it being used at a certain number of times. It is more a case of ensuring that the regulator has appropriate remedies to support its important inquiry work where that is needed. A positive direction would only be issued following an inquiry and where the circumstances of the case require formal action to be taken as Oscar has reached the view that there has been misconduct in the charity or that it is necessary for Oscar to act to protect charitable property. Oscar is, of course, required to publish a report when any type of direction is made. It is unlikely to be used on a frequent basis, I would not have thought. If you look at the annual report for 2021-22, Oscar opened 60 new inquiries about charities in that period. They closed 99 inquiry cases during that year where there was one instance of regulatory powers being used and a third of inquiry cases closed with recommendations of guidance to trustees. That shows the context of what we are talking about here. On your second question, there are a number of areas where Oscar anticipates using a positive power of direction, for example, to appoint additional trustees in order to form a quorum or meet a minimum specified in a governing document. Or to take a specific action in line with the charity's governing document. For example, to hold an AGM to make a specific decision or to take action to remove a trustee in line with the powers that they have. Or to manage a conflict of interest effectively and demonstrably. Or to prepare and submit a compliant statement of accounts. Non-compliance with a positive direction would be classed as trustee misconduct and Oscar would be able to take enforcement action against the trustees, obviously taking into account the specifics of Elveni Case. That's helpful, thank you for that clarity. Finally, do ministers still believe that it is appropriate for designated religious charities to be exempt from Oscar's direction given powers? Is it ministers' intention that any future reviews would include that? We touched on the designated religious charities earlier and it is intended that DRC's will be exempt from positive directions in line with the precedent set by the 2005 act. The bill seeks to update and improve the existing law rather than change the original policy intent of the 2005 act, which recognises that many religious bodies operate effective self-regulatory mechanisms by having those internal supervisory and disciplinary functions. I guess that there is a balance of not wanting to over-regulate such charities, but I recognise the point that Miles Briggs makes, that there are varying views on that. Some within the sector would like to see this exemption reviewed. It is probably something that could be considered as part of the wider review that we could come back to, but we felt that it was not appropriate to do that at this time. I will move to our final theme surrounding financial implications of the bill. Does the cabinet secretary anticipate that Oscar will be able to absorb those additional responsibilities within its existing budget, or will additional resources be required? I think that the view and financial memorandum sets out the additional costs and resources that Oscar has forecast for the implementation of the bill. Most of those costs are Oscar staff costs to carry out communications, engagement activities. We talked earlier on about the importance of that and to provide support to charities and other stakeholders and process case work. Funding for Oscar will generally be negotiated in the usual way, taking into account the projected costs of its functions at that time. In line with the standard practice of budget forecasting, those additional staff costs have been calculated on the assumption of 3 per cent annual uplifts to actual salary figures for 2021-22. I met with the chair and the chief exec of Oscar in February and funding was discussed. The financial situation is a challenge that we want to cross all the public sector. Oscar has not been treated differently in that regard. Officials are in regular contact with Oscar about its resourcing requirements. We agreed that we would keep a kind of watching brief over the financial resilience of Oscar going forward and those discussions will continue with Oscar. However, I do not anticipate any particular challenges around any additional costs from the bill itself. You have touched on my next question. We have discussed communication and engagement. There will also have to be allowance for development of potentially new digital tools to help with the collection of data and minimise any administrative burden on charities. Is that appropriate? Those discussions are taking place with Oscar and those are on-going? I think that the financial memorandum sets out the estimated costs in relation to developing the database for the internal schedule of charity trustees as well as the ongoing maintenance of the database. That is an important investment that Oscar has made and will continue to make as part of its delivery. Does the cabinet secretary believe that although costs for individual charities may be very minor, those could add up to a significant sum across the sector as a whole? We have touched on some of that already. The bill does not introduce significant additional costs to charities. I do not think that it has burdened some of what charities are being asked to do. A lot of that information is already held. I do not think that it will be a huge additional cost. In terms of councils that might administer charities, I do not think that either or the sector as a whole. Previous evidence sessions have noted that there would be a small resource requirement to comply with the new provisions. We approached a small representative sample of charities to ascertain estimated costs and savings of the bill provisions, which will directly impact all charities. Overall, the charities that fed back did not anticipate incurring anything other than minor costs. We are supportive of the proposals that are set out. The benefit that the legislation will bring to the sector as a whole will far outweigh the very minor costs to charities. Given that time allows, I would be grateful if you would not mind just confirming a few points if we move back to the theme 1, which was about the wider review. Can I just ask when the cabinet secretary would anticipate that proposed wider review of the charity sector taking place and over roughly what timescale, if any, information could be given? I think that it is important to get the bill progressed. I would envisage the substantive discussions around the scope of the review happening after stage 3, but there is probably some groundwork that can already be taken place around how some of the mechanics of how we would take forward those discussions. I do not want to redirect those guys who are working on the bill into doing that when they are working on the bill. We need to manage resources appropriately, so the main scoping with the sector will have to take place after stage 3. On how long it takes after that, I do not want to be too restrictive on that, because that depends on the scope. If the scope is going to be perhaps quite extensive, we would need to take as long as it takes to get that right. What I would be prepared to do is, once we have stage 3, complete us to set out more detail of that process at that point. We would then have the capacity to look at that in a bit more detail. Is the Scottish Government committed to further consideration of legislative changes to support the reorganisation of statutory charities? That is something that we have seen wide support for throughout the evidence that we have taken so far. That was one of the questions in the original consultation, which is to do with a particular section of the 2005 act and an ambiguity that has been identified in how it operates. It is not included in the bill at present, but there has been helpful engagement with particularly that some of the legal stakeholders who have an interest in this, and through some cases that they have been involved in. We are still looking at that. However, it is bound up with wider issues about statutory charities generally, which is perhaps something that would be looked at as part of the wider review. The reason that it is not included in the bill is that the two things are sort of enmeshed, and we feel that it might be better to look at them more holistically and more of a routine branch way as part of the wider review. However, there has been some discussion since introduction, which has been very helpful, so I think that it is still something that we are looking at. Thank you.