How would an independent Scotland affect the charity sector?

by Richard Meade
Head of Policy and Public Affairs, Scotland

Richard-MeadeAt the end of November last year the SNP Scottish Government published its much-anticipated white paper on Scottish Independence. The 670-page document was part blueprint for a new state and part manifesto for what a SNP Government would do if a referendum was won and if the SNP was successful at the first Scottish general election in 2016.

Even taking into account everything that has been published, it is still difficult to say with certainty exactly how all this will affect the charity sector. We can, however, begin to build a picture of what kind of Scotland charities might be operating in after September 2014.

  • Governance

The White Paper states clearly that “just as charities operate cross border between the UK and Ireland” they would be able to do so in an independent Scotland. Charity Law is already devolved to Scotland and charities are regulated in Scotland by the Office of the Scottish Charity Regulator (OSCR). The shared work that takes place between OSCR and the Charity Commission in England and Wales would continue after independence.

  • Fundraising

Some fundraising issues may change with changes in the tax regime set out in the White Paper. The Scottish Government would gain control over income tax, corporation tax exemptions and reliefs for charities, along with legislation covering tax relief, including Gift Aid.

The Scottish Government has said that it will “ensure that charities continue to benefit from tax relief on charitable donations”.

  • Spending

The White Paper makes it very clear that how and where individual charities spend their funding will be down to them. "Decisions on funding are for charities themselves and there are no legal provisions in place currently that require funds to be distributed in a particular way between the nations of the UK." When making this point the White Paper does not stipulate a difference between statutory and voluntary funding. However, restrictions on how statutory funding is spent may be set out in contracts and service level agreements.

  • Health and social care

Power and responsibility over Scotland’s health and social care services have been devolved to the Scottish Parliament since 1999. A yes vote would mean little change in this area. The SNP promises it “will not change the way you receive your healthcare”, which would suggest that, for example, Marie Curie nursing services, hospices and development services would continue as they currently do.

The SNP has also indicated that if it remains in power after independence then it would keep the NHS in public hands, as well as retaining healthcare policies that are currently in place, such as free personal care for those over 65 and free prescriptions. The current cross-border arrangements for services between the health services in England and Scotland would also remain.

So, although uncertainties remain, it would appear that if the Scottish people vote for independence on 18 September, it will be a historic moment for Scotland and its neighbours but may not represent too much of a change for many UK charities.