Since being introduced the Lobbying Bill has provoked a strong reaction within the sector. With the Bill receiving Royal Assent on 30 January 2014, what are the key things you need to know about this new legislation and what impact is it likely to have? 

Since the Transparency Non-Party Campaigning and Trade Union Administration Bill (the Bill) was first introduced last July, there has been widespread concern within the sector as to what impact it will have.

In a nutshell, the Bill, referred to by critics as the “Gagging Bill”, places restrictions on political activity by non-party organisations in the year running up to a general election. Many charities fear this will prevent them from being able to speak out on important issues during an election year.

With the Bill receiving Royal Assent and becoming law on 30 January 2014, we highlight four key questions that it raises for any charities that campaign.

  1. Are you over the Threshold? 

Any charity that spends over a certain threshold in an election year will need to register with the Electoral Commission in order that they may be monitored as a political campaigner. Although the government originally planned to set the spending thresholds at £5,000 in England and £2,000 in Scotland, Wales and Northern Ireland, this was increased to £20,000 in England and £10,000 in Scotland, Wales and Northern Ireland (the aim being to remove companies who incur small amounts of expenditure from regulation). 

There is some good news for small charities forming part of a campaign coalition, as only the lead campaigner in the group will be required to register and report on the actions of all other coalition members. This should help restrict compliance costs and is an improvement on the government’s previous proposal that all members of a coalition, regardless of size, would need to report on their spending.

  1. How much can you spend? 

The Act imposes a limit of up to £9,750 that campaigners can spend within an individual constituency during an election period. This has received criticism on the basis that the limit imposed is not a significant sum to spend on one action area. As most charities do not organise themselves in terms of parliamentary constituencies, this new provision is also likely to create a significant burden for national groups carrying out campaigns that focus on particular regions.

The overall amount that a campaign group can spend has been reduced from £988,000 to £450,000. This is a significant reduction that will leave large organisations concerned about staying within the limit. Every effort will need to be made to ensure that they do, however, as exceeding the specified thresholds could lead to criminal proceedings.

  1. What costs are taken into account for a campaign spend? 

The list of costs to be included when it comes to calculating total expenditure has been extended to cover media events, transport and market research. Crucially, and perhaps most controversially, all associated employment costs must also be added. 

The inclusion of staff costs has been the main bone of contention in the passing of the Bill. Campaigners have highlighted the fact that it will drag many more voluntary organisations into the registration threshold, putting an extra strain upon them with the compliance costs that come with it. There is also concern that the staff costs for larger organisations will significantly eat into their £450,000 limit, reducing further their already reduced budget.  The decision to include staff costs not only stirred a strong reaction in the sector but also divided opinion in the Lords. A vote to amend the provisions so as to exclude “background staff costs” to aid charities and campaigning groups was tied. As the vote was tied, the amendment was not made and all associated staff costs will need to be taken into account by charities. One crossbencher in the Lords warned the process of separating staff time into two groups, one for campaign related activities and one for their other jobs, will be a “bureaucratic nightmare”.

  1. How you define an “Election Year” 

The regulated period will begin on 18 September this year and end in May 2015, lasting eight months in total. After May 2015, the provisions of the Act will be reviewed at which time, depending on what impact these new provisions are seen to have on charities, the debate may reignite.