Analysis: The Charity Commission's action plan to improve relations

A disputed investigation and a bruising tribunal case have taken their toll: Stephen Cook looks at plans for improving staff engagement, gets the official line on compliance work and hears from former staffers

The Charity Commission's staff survey results
The Charity Commission's staff survey results

When the Charity Commission carried out its annual staff survey in 2010, it scored 55 per cent on the ‘engagement index’, which measures whether employees speak positively of the organisation, are emotionally attached to it and are motivated to do their best for it. This put the commission one percentage point lower than the civil service generally, and seven points lower than civil service "high performers".

But among 50 staff working in the compliance division in the Liverpool and Taunton offices, the engagement figure was significantly lower, at 41 per cent, and responses to nine questions considered as "drivers of engagement" were dramatically lower.

Only 13 per cent of responses about leadership and change management, for example, were positive – 19 percentage points lower than the commission generally and 26 points lower than high-performing units. The figure on "resources and workload" was 28 points down on the commission generally, and on "inclusion and fair treatment" was 16 points down.

A year later, the 2011 survey showed that the top-line figure for the commission generally was still stuck at 55 per cent. Any change in the compliance units in Liverpool and Taunton is difficult to establish because the commission declines to release segmented figures (the relevant 2010 figures were passed to Third Sector by a former member of staff).

But the surveys appear to lend credence to statements by David Orbison, the former Liverpool compliance officer who resigned and won part of his case against the commission in the Employment Tribunal recently, and by other former staff who have recently left and spoken to Third Sector on the condition that their identities are protected (see below).

They also appear to lend credibility to letters sent anonymously to Third Sector from time to time in recent years. The latest alleges that the commission is "in crisis", criticises senior management for "bullying, harassment and discrimination" and says problems have been made worse by "constant reviews and restructuring".

Michelle Russell, head of investigations and enforcement at the commission, says: "If people genuinely hold those views, that’s a concern. There’s a support network for them to channel concerns in the right way, which people do use."

It is not unusual for staff in satellite offices of London-based organisations to suffer from lower morale, and it is difficult to assess the significance of anonymous letters, which cannot be tested and might come from individuals with particular grudges. However, some senior commission staff accept that morale and engagement have been low, particularly in the compliance unit in Liverpool, and in January this year the commission’s board noted that "issues regarding bullying, harassment and discrimination" were being addressed but "further work was clearly necessary".

In May the commission started work on a staff survey action plan with targets to improve scores for engagement, understanding of its mission and purpose and "treating each other with respect", which it describes as "still an area of concern".

Action on respect involves a half-day workshop on bullying and harassment attended by all staff, including senior managers, with the aim of promoting a culture in which staff are more comfortable about challenging inappropriate behaviour. It also involves confidential discussions with staff to understand why there are significantly higher than average scores in some parts of the commission on bullying, harassment, being treated fairly and feeling able to challenge managers.

The next staff survey will be carried out in the autumn, and the current action plan is due for completion by March next year.

- See Editorial



INTERVIEW: ‘We are not afraid of being called to account’

Michelle RussellThe question of proportionality was the key factor in the decision by senior managers at the Charity Commission to close the investigation into the charity African Aids Action in 2009, according to Michelle Russell (right), head of investigations and enforcement at the regulator.

The decision to close the statutory inquiry and instead issue a voluntary action plan to the trustees prompted objections by the case officer, David Orbison, who argued in favour of stronger measures and claimed that the commission was risk-averse and neglecting its statutory duties. The commission denied this.

The resulting dispute culminated in Orbison’s resignation and the recent decision by the Employment Tribunal in Liverpool that he had been constructively dismissed but had not suffered discrimination because of the Public Interest Disclosure he made or of his disability while off sick.

Russell says that the decision on AAA was made shortly after the charity tribunal had overturned the commission’s removal of one of the trustees of the Sivayogam temple in south London. This was the first time the tribunal had given an "important steer" on the commission’s use of its remedial powers, she says.

The tribunal had emphasised the need for proportionality, including assessing the strength of the evidence against trustees and giving them the opportunity to remedy problems themselves, she says. Some of the direction was relevant to AAA, whose trustees had promised to take remedial action.

Russell says: "It is quite clear in the legislative framework and in the light of the steer from the tribunal that it’s not enough just to have evidence of, say, misconduct or – in the case of more serious powers – of the requirement to protect property: you have to go on to say that the most proportionate way of dealing with it is to exercise those powers. So proportionality and the assessment of that was key."

She rejects the argument by Orbison that the decision to close the AAA case was prompted partly by fear of another defeat in the tribunal: "It’s a bit of myth, really, that the commission doesn’t want to be challenged in the tribunal. I know that it’s the opposite and we encourage and want the clarity of tribunal decisions, particularly about how we use our investigative powers.

"We’re not afraid of defending our decisions or being called to account. But I think there is a difference when you’ve been given a steer by the tribunal on where the legal line is. If we’d proceeded to exercise our powers in a way that we knew would be overturned by the tribunal, that would be the action of an irresponsible regulator."

Russell denies the claims made by Orbison, supported by others who have recently left the commission (see extracts below), that it is risk-averse and that there is a "culture of fear" in the management of its compliance work.

She says it has a risk framework that distinguishes between trustees who make innocent or honest mistakes and those who know they are doing wrong. It also has to use its resources for the most serious cases, which are sometimes small charities.

"The commission is a corporate body – there aren’t one or two people controlling what it does or does not do," she says. "Difficult calls have to be made sometimes, and the job of managers is to make those calls.

"Sometimes there will be people who disagree with them, but at the end of the day it’s the commission corporately that exercises its legal powers or takes other action."



IN OUR VIEW: Four former commission staff give their opinions on its approach to regulation and its management style: all asked not to be named

Former senior member of compliance staff

 

The commission is entirely risk-averse – it is not really interested in regulating. It just doesn’t seem to take theft seriously. Its view is that if examples of fraud come out, the whole institution of charity will come into question and people won’t donate. In fact, proper regulation would instil more confidence in giving. It doesn’t act firmly in case it is challenged in the tribunal. Charitable status is meant to be a register of probity, but it’s not. How can it be when registration is virtually automatic?

Most scams occur in smaller, less well-known charities. I accept the argument on proportionality if the amount is small, but if fundraising is being abused, why isn’t the commission putting down a marker? It is too easy for dishonest people to make money out of charities. The tone of regulation is set by people at high level who have built a culture of fear.
A recent staff survey asked if employees felt confident challenging their managers – in the compliance department the response was roughly zero. David Orbison was the first to really challenge that culture.

Former commission employee

Sam Younger is trying to make the commission a better regulator. He invites and listens to staff comment, but there is still fear of speaking out in the compliance area. Staff engagement in compliance continues to be perilously low in successive civil service staff surveys despite measures to improve it and tackle bullying. Nothing will change until some people change their ways or leave.

A mindset existed before Younger arrived – to use "risk and proportionality" as a cover-all for any situation with which the commission did not wish to engage. In reality it is reactive: a low-risk case becomes high-risk when it becomes high-profile because of interest from MPs or the press; or a high-risk case gets closed or wound down when things get hot – meaning a fear of possible challenge. There is also a fear of letting officers loose on cases, so that actions previously carried out at lower grades (such as ordering copy bank statements) need approval, with legal advice, at a very senior grade. Legal advice would often refer to the need to consider human rights to an extent that often seemed to outweigh evidence of misdemeanour.

Former senior case officer

The Sivayogam case (see above) led to an action plan from the commission board for the compliance division. This was terribly managed. We were never properly trained, informed or empowered to carry out the change. As a case worker, it was difficult for me to know what steps to take when the guidance was contradictory. We simply became afraid to take action. During my exit interview with HR, I raised concerns including poor change management, the risk-averse nature of the commission and bullying.

So what should be done?

- Recruit a board member with experience in policing, prosecution, fraud and/or investigations.
- Fix the culture of bullying, intimidation and lack of accountability, with some fresh faces at the top with new ideas and unspoilt views of the commission’s work.
- Improve training, communication, change management and accountability.
- Ensure that HR is independent: in my experience it was manipulated by management.

Former senior investigating officer, long service

In my time, the commission swung from robust action to hand-holding and advice-giving. It became much more risk-averse. Its powers to stop abuse, such as temporarily freezing bank accounts, seemed subject to the same level of proof as criminal prosecution. Case officers found it more difficult to take action to stop or rectify abuse. As the body responsible for investigating and rectifying abuse and poor practice, I believe the Charity Commission falls short of what is required by the public.

All aspects of the commission’s business should be focused on giving the public confidence in the integrity of charity. If the commission takes a day to register a charity, how can there have been robust checks? It makes registration look good, but is it storing up problems for the future? The call centre may well take 500 calls a day, but how good can the advice be in two minutes?

Senior management should talk in more detail to the people who do the jobs. The commission needs to focus on what helps charities to function better and not what makes the commission look better.

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