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Political Parties, Elections and Referendums Act 2000

Section 26 : Financial structure of registered parties : adoption of scheme

76.It is intended that the registration process should serve to identify exactly what constitutes a particular registered party for the purposes of these controls. Parties in the United Kingdom are constituted in different ways. Some have a federal structure while others are more centralised. Party structures may also feature relationships between a central organisation and affiliated or associated bodies which may also have a separate and independent existence of their own and which may not necessarily be wholly comprised of members of the party in question. In some instances it may be more appropriate to regard such affiliates or associated bodies, for the purposes of the controls on party funding, as donors to the party rather than as a constituent part of the party apparatus.

77.Section 26 is, therefore, intended to enable the Electoral Commission to pin down those constituent parts of a registered party’s organisation which are to be required to comply, whether separately or through the party’s central organisation, with the controls set out in Parts III to VII of the Act. Each party applying for registration must propose a scheme setting out the arrangements for regulating the financial affairs of the party and the scheme must be approved by the Electoral Commission before the application is granted. Where the Commission is not satisfied that the proposed scheme properly reflects the organisation of the party it may request that the proposed scheme be modified. The arrangements for the adoption of schemes in relation to those parties which are already registered under the Registration of Political Parties Act 1998 are set out in Part I of Schedule 23.

78.Under subsection (8), certain organisations (namely, trade unions, friendly societies, industrial and provident societies and other bodies which may be specified by order) are not to be regarded as forming a constituent part of a party for the purposes of a scheme adopted under this section. As a result, money donated to such an organisation which is affiliated to a registered party would not be treated as a donation to that party. But a donation from such an organisation to the registered party (including an affiliation fee) would have to be treated as a donation to the party and not simply as an internal party transaction. The Registered Parties (Non-constituent and Non-affiliated Organisations) Order 2000 (SI 2000/3183) adds to the list of organisations which are not to be treated as part of a party for the purposes of this section.

79 Subsection (2) provides for a distinction to be drawn between parties which are to be regarded for the purposes of the Act as a single unitary organisation and parties which are to be regarded as consisting both of a central organisation and of other units or organisations (for example constituency associations, local branches and women and youth organisations) which will have separate responsibility for their accounts. These subsidiary units or organisations are described as “accounting units”. If a party scheme falls into the latter category the party will be required to adopt a scheme clearly identifying which parts of its organisation constitute its central organisation and which constitute its accounting units (subsection (3)).

80.Subsection (7) provides for the adoption of a replacement scheme, for example following changes to a party’s structure. A replacement scheme cannot take effect until approved by the Electoral Commission.

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