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We consider that OSCR is best placed 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, its extensive experience as a regulator and the guidance that it will produce on that part of the bill, which it will consult on.

The provision is unlikely to impact on the vast majority of charities or applicants to become a charity. OSCR’s data indicates that two charities out of 25,000 do not appear to have a connection to Scotland. Its 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 that are already in place under the 2005 act.

It is not a huge issue, and leaving it to OSCR to look at each individual case is a sensible approach.

We have touched on some of that. The bill does not introduce significant additional costs to charities, and I do not think that what charities are being asked to do is burdensome. A lot of that information is already held, so I do not think that there will be huge additional costs. I do not think that that will be the case for councils that administer charities either, or for 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 as a result of the bill’s provisions, which will directly impact all charities. Overall, the charities that fed back did not anticipate incurring anything other than minor costs and were supportive of the proposals as set out. The benefit that the bill will bring to the sector as a whole will far outweigh the very minor costs to charities.

It is important to progress the bill, so I envisage the substantive discussions around the scope of the review happening after stage 3, but there is probably some groundwork on the mechanics of how we would take forward those discussions that could already be taking place. However, I do not want to redirect these guys beside me, who are working on the bill, to carry out that work while they are doing so, so we need to manage resources appropriately. The main scoping with the sector will have to take place after stage 3.

I do not want to be too restrictive about how long it will take after that, because it depends on the scope. If the scope is extensive, we will need to take as long it takes to get it right. Once stage 3 is complete, I am prepared to set out more detail on that process. We will then have the capacity to look at that in more detail.

We touched earlier on the point about designated religious charities. It is intended that DRCs will be exempt from positive directions, in line with the precedent that was set by the 2005 act.

The bill seeks to update and improve the existing law rather than to change the original policy intent of the 2005 act, which recognises that many religious bodies operate effective self-regulatory mechanisms through internal supervisory and disciplinary functions.

There is a balance to be struck in relation to not wanting to overregulate such charities, but I recognise the point that Miles Briggs makes. There are varying views on the subject, and some in the sector would like the exemption to be reviewed. It probably could be considered as part of the wider review—we could come back to that. However, we felt that it was not appropriate to review the exemption at this time.

As I understand it, OSCR already includes the Gaelic charity name on the Scottish charity register when the charity has requested it. The question is whether the register could include a Gaelic version of every charity name, which would be a matter for OSCR to consider as part of its duties and resources as an independent public body. The member might want to raise the question directly with the organisation to see whether it would be willing to consider that.

If the outcome is that legislation is required—be it secondary legislation or primary legislation—we should be open-minded about that. Clearly, we need to wait and see what comes out of the review. If the review concludes that there is a need for change, which in turn requires legislative change, we will, of course, have to consider that, and we will have to examine where in the parliamentary schedule that would be possible. At the moment, I am fairly open-minded about that.

Given what I mentioned earlier about what happens where there is a concern, the bill gives OSCR the power to exclude information from its register of its own accord where it would have “safety or security” concerns about a person or property.

If you are thinking, for example, about an organisation that may have been targeted for whatever reason, OSCR is able to take that into account and exclude the information, even without the charity or trustee having to apply first. If OSCR believes that there could be a security risk, it has the power to exclude that information.

I gave the example earlier of a women’s refuge; I am sure that we could think of other examples. If a property pertaining to a charity was in danger of being targeted for whatever reason, OSCR would look at that very seriously indeed.

I ask Rebecca Reid to come in.

On the first question, the new power is not being proposed with a view to its being used 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 those are needed. A positive direction would be issued only following an inquiry and where the circumstances of the case required formal action to be taken because OSCR had reached the view that there had been misconduct in the charity or that it was necessary for it to act to protect charitable property. Of course, OSCR is required to publish a report when any direction is made.

I think that the power is unlikely to be used frequently. The annual report for 2021-22 shows that, in that year, OSCR opened 60 new inquiries about charities and closed 99 inquiry cases. There was one incidence of regulatory powers being used, and a third of inquiry cases closed with recommendations or guidance to trustees. That is the context to what we are talking about.

On your second question, there are a number of areas in which OSCR anticipates using a positive power of direction. Those include directions to appoint additional trustees to form a quorum or to meet a minimum number that is specified in a governing document; to take a specific action in line with the charity’s governing document, such as holding an annual general meeting to make a specific decision; to take action to remove a trustee in line with the powers that they have; to manage a conflict of interest effectively and demonstrably; and to prepare and submit a compliant statement of accounts.

Non-compliance with a positive direction would be classed as trustee misconduct, and OSCR would be able to take enforcement action against the trustees, taking into account the specifics of any case.

The financial memorandum sets out the additional costs and resource that OSCR itself has forecast for implementation of the bill. Most of those relate to OSCR’s staff costs to enable it to carry out communications and engagement activities—we talked earlier about the importance of that aspect—to provide support to charities and other stakeholders, and to process casework.

Funding for OSCR more generally will be negotiated in the usual way, taking into account the projected costs of its functions at that time. In line with the standard practice for budget forecasting, the additional staff costs have been calculated on the assumption of 3 per cent annual uplifts to salary figures for 2021-22.

I met the chair and the chief executive of OSCR in February, and funding was discussed. The financial situation is challenging across the whole public sector, and OSCR is not being treated any differently in that regard. Officials are in regular contact with OSCR about its resourcing requirements. We agreed that we would keep a watching brief over its financial resilience, and those discussions with OSCR will continue, but I do not anticipate any particular challenges around any additional costs arising from the bill.