Andy Ricketts: New figures suggest the Charity Commission is becoming more proactive

The regulator's annual report shows a big increase in enforcement action in the year to March, writes the deputy editor of Third Sector

Andy Ricketts
Andy Ricketts

The Charity Commission this week published two documents that gave an insight into its current work and a possible glimpse of the future.

First, its current work: the regulator’s latest annual report shows a large rise in the use of the regulator’s statutory powers over the past year. No great surprise there – the commission has regularly been saying that it has been getting tougher on the sector since the troubles sparked in 2013 by the Cup Trust tax-avoidance affair and subsequent criticism from the National Audit Office and MPs, among others.

Some felt that the commission had become too soft on the sector it was meant to be regulating, while also becoming too reluctant to take firm action against possible wrong-doers because it feared the prospect of expensive litigation at the charity tribunal.

Taken at face value, this week’s figures show a firmer hand from the commission. The number of new statutory inquiries opened by the commission in the year to 31 March 2015 was 103, compared with 64 in 2013/14; and use of its enforcement powers increased from 790 instances to 1,060. The increase in the number of statutory inquiries is among the more striking figures, particularly when set against the 12 the regulator opened in 2012/13.

Does this mean the commission is getting tougher? At the very least it shows that it is becoming more proactive, and at a time when the pressure on its funding (and therefore its workforce) has been increasing.

The true test for the regulator will come when someone uncovers significant misbehaviour at one of the 164,000 registered charities in England and Wales, as is likely at some stage.

It is hoped that the new powers that the commission is likely to receive through the charities bill will help to avoid this situation, but someone, somewhere will always try to break the rules.

The regulator certainly looks better placed to avoid becoming the political punchbag it ended up being two years ago, but only time will tell.

On the future, the controversial subject of charities paying for regulation by the commission also got another airing.

The commission’s new strategic plan for 2015 to 2018, published alongside the annual report, says the regulator will consult on proposals for alternative funding options, including an annual charge for registered charities.

The commission recently seems to have upped the frequency of its references to a possible charging regime and as Stephen Cook, editor of Third Sector, wrote last week, there seems to be a sense of inevitability about a system of this sort being introduced.

What’s unclear at this stage is how this would play with the giving public. The idea is already unpopular with charities, as you would expect, but could raise a large amount of money for the commission at relatively small expense for the individual organisation.

Even a flat charge of £25 on all the 164,000 or so registered charities in England and Wales would raise £4.1m. Would many donors be any more upset about this than they are at seeing a small percentage of their donation used for other overheads, such as staff costs or office space?

If the fee was levied only on larger charities, as was suggested in parliament this week by the Labour peer Baroness Pitkeathley during a debate on the charities bill, would that be any better? Is it any more palatable to the donors of large charities than people who give to small organisations that a small proportion of their donations be used to pay bureaucratic costs?

It’s an issue that is likely to rumble on for some time.

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