Chartered public bodies

What is a royal charter?

A royal charter is a document issued by the monarch that gives independent legal standing to an organisation. They have been used since the 12th century to incorporate companies, public bodies and even cities. ²⁸ The Privy Council Office, ‘Royal Charters’, Gov.uk, [no date], privycouncil.independent.gov.uk/royal-charters/  Queen Elizabeth II granted more than 250 royal charters during her 70-year reign. ²⁹ The Privy Council Office, ‘List of Charters Granted’, Gov.uk, [no date], https://privycouncil.independent.gov.uk/royal-charters/list-of-charters-granted/

What sorts of bodies are set up under royal charters?

Most universities set up before the last century were set up by royal charter, as were many charities (including the Red Cross), private companies (including the Royal Bank of Scotland) and schools (including Dulwich College).

Charters have also been used to set up public bodies; that is, organisations which exist ‘at arm’s length’ from government but fulfil its objectives and are fully or partially state funded. Public bodies set up by royal charter include the BBC, the British Council, UK Sport, the British Film Institute (BFI) and the Bank of England.

Chartered bodies do not all have the same relationship to government. For instance, the BBC is a public corporation whereas the British Council and UK Sport are executive non-departmental public bodies. The relationship between a public body and its sponsoring minister is generally set out in the body’s charter.

How do chartered bodies differ from other public bodies?

Royal charters are issued by the monarch through the privy council, a group of advisors including senior ministers, opposition figures, members of the clergy and judges. In practice, only government ministers usually attend the privy council and charters are issued without any voting or debate.

According to the Privy Council Office, chartered bodies are “generally self-regulating”, and the privy council has limited power to intervene in the affairs of the body. ³⁰ The Privy Council Office, ‘Royal Charters’, Gov.uk, https://privycouncil.independent.gov.uk/royal-charters/  This in theory grants them more independence than other types of body. It means that the privy council (or ministers themselves) cannot make micro-level decisions about, for instance, BBC programming. ³¹ Sweeney M, ‘What changes can government make to the BBC?’, The Guardian, 21 May 2021, retrieved 12 September 2022, www.theguardian.com/media/2021/may/21/what-changes-can-government-make-to-the-bbc

However, in practice the relationships chartered bodies have with their sponsor departments and parliament are not too different to other statutory bodies. For instance, ministers have the right to appoint the chair of UK Sport and other bodies, and the BBC chair is subject to a pre-appointment hearing in front of the Digital, Culture, Media and Sport Select Committee. Chartered bodies will also usually have framework agreements governing the relationship between the body and the department, as is the case with non-chartered public bodies.

What powers do parliament have over chartered bodies?

Establishing a body by royal charter differs from the usual way of setting up major public bodies, which is through parliamentary legislation. It is faster than legislating as it does not require parliament to scrutinise or vote on plans but, as a consequence, charters are subject to less democratic oversight than bills setting up statutory bodies.

Unlike legislation, royal charters cannot be amended by parliament. However, parliamentary legislation trumps stipulations in royal charter, so parliament can in practice legislate on how chartered bodies should be run.

Many smaller chartered bodies do not have separate funding streams and so their funding is managed by their sponsor department, introducing an additional level of departmental control. All spending by government must be passed by parliament, so parliament ultimately has control over the government funding available to chartered bodies.

Can royal charters be revoked?

Royal charters can be revoked through primary legislation. For instance, the Higher Education and Research Act 2017 ³² Houses of Parliament, Higher Education and Research Act 2017, Gov.uk, enacted 27 April 2017, www.legislation.gov.uk/ukpga/2017/29/contents/enacted  combined nine existing research bodies into a new agency, UK Research and Innovation, and revoked the royal charters of the Arts and Humanities Research Council, the Economic and Social Research Council and other chartered bodies. However, revocations are rare and existing royal charters will remain in place following King Charles III’s accession to the throne.

How can royal charters be altered?

The privy council can change a royal charter through an Order of the King in Council (often simply called an order in council), but only if the body itself proposes an amendment and ministers approve. For instance, Sport England’s charter has been amended three times since 1996. ³³ Sport England, Royal Charter of English Sports Council (Sport England), 3 December 2009, retrieved 12 September 2022, https://sportengland-production-files.s3.eu-west-2.amazonaws.com/s3fs-public/consolidated-royal-charter.pdf?VersionId=losQoFZVi96Vvom80uqoZsR845HI7DIQ

Unusually, the BBC’s charter is time-limited, only lasting for 10 years. This means it must be renegotiated every decade, making major changes to the BBC charter more common. For instance, the last review of the BBC in 2016 abolished the BBC Trust and created a unitary BBC board. ³⁴ Sweeney M, ‘What changes can government make to the BBC?’, The Guardian, 21 May 2021, www.theguardian.com/media/2021/may/21/what-changes-can-government-make-to-the-bbc

Amendments are generally a private negotiation between ministerial departments and the body itself, although the final amendments are made public. This means changes to charters are less transparent and open to scrutiny than changes to the legislation setting up statutory bodies.

How have royal charters been used in recent years?

Few public bodies have been set up by royal charter in the past two decades. The Arts and Humanities Research Council was the last executive public body to be set up by royal charter, in 2004. Ministers’ reluctance to use royal charters reflects the lack of public understanding of them and a perception that they bypass parliamentary scrutiny. More recent public bodies like the Trade Remedies Authority have been created through legislation instead.

Ministers did use a royal charter in 2014 to set up the Press Recognition Panel (PRP) as part of the reforms to press regulation after the Leveson inquiry. Here, the use of a charter was intended to create independence from politicians, preserving press freedom. ³⁵ O’Carroll L, ‘Parliament vs press: how rival royal charters are key to media reforms’, The Guardian, 8 October 2013, retrieved 25 February 2022, www.theguardian.com/media/2013/oct/07/parliament-press-regulation-royal-charter  For this reason, the PRP’s charter can only be amended by a two-thirds majority of each of the House of Commons, the House of Lords and the Scottish parliament. ³⁶ Press Recognition Panel, ‘Frequently Asked Questions’, [no date], retrieved 25 February 2022, https://pressrecognitionpanel.org.uk/faqs  But the body has ended up being largely redundant, as no national newspaper has yet accepted the jurisdiction of a regulator it has recognised.