To charge or not to charge - the commission's question

The debate about fees has started, but it is likely to be a slow one, the regulator says. Sam Burne James reports

Charity Commission
Charity Commission

After speaking at a conference in October, Paula Sussex, chief executive of the Charity Commission, was asked whether the regulator would consider fining charities for non-compliance – an idea previously raised by government, the public and the commission itself.

In her response, she revealed that in November the commission, the National Council for Voluntary Organisations and other charities would take part in a round- table discussion on the broader question of fees or levies for the commission's services.

It's a subject that's been kicked around for some time. The commission's budget in 2007/08 was £31.7m; in 2013/14 it was £21.4m, nearly a 50 per cent cut in real terms, as the commission is never shy to point out. It has just over 300 staff, about half the number it had a decade ago.

After February's damning report on the commission by the Public Accounts Committee, William Shawcross, the commission's chair, said in April that its funding position was unsustainable. "If we are to fulfil all the expectations placed on us while increasing our serious casework, we must be adequately funded," he said.

Apart from the relatively small amounts that the commission charges foreign governments for regulation and governance advice through its international programme, its sole funder is the UK government. On various occasions, Shawcross has suggested that the commission might increase its funding by charging charities for being registered, filing accounts or other activities.

At a public meeting in Manchester earlier this year, he said charging the sector had been successful at another regulator of a similar size, the Solicitors Regulation Authority. Shawcross suggested that charges could apply to charities with incomes of more than £100,000 a year. "That's only about four staff, so I found that a bit alarming," commented one audience member.

Debra Allcock Tyler, chief executive of the Directory of Social Change, said at the time that she was firmly against the idea, pointing out that this would result in the taxpayer paying twice for the commission, "once through taxes and then supplemented through donations, which would be used to pay this fee".

At the commission's annual public meeting in London a couple of months later, Keith Appleyard, a trustee of Fiveways Playcentre, a Brighton nursery and a registered charity with an income last year of £388,612, told Shawcross he would be happy for his organisation to pay some sort of fee. He said this could be in the same order of the £40 paid for paper submission of accounts to Companies House, or the £35 paid for statutory registration with the schools inspectorate Ofsted.

Many charities are registered with Companies House, paying anything from £8 for a change of name to £100 for same-day registration. Community interest company registration costs £35.

Outside England and Wales, the Office of the Scottish Charity Regulator and the Charity Commission for Northern Ireland do not charge charities. Nor does the Australian Charities and Not-for-profits Commission, but the Charities Services unit of the New Zealand Department of Internal Affairs does - charities with gross incomes of more than NZ$10,000 (£5,000) pay about £25 for online annual return filing or £38 on paper. Elsewhere, including Canada, South Africa and a number of US states, charities pay for registration and similar services by virtue of the fact that charities register with the equivalents of Companies House or HM Revenue & Customs.

Subjects raised at the forthcoming round table are likely to include how any income raised by the commission from charges will be treated by the Treasury. There are concerns in the sector that such income will be regarded as an opportunity to reduce public funding rather than allow the commission's budget to rise. Some regard it as vital to reach a satisfactory agreement on this subject.

Sussex warned in her speech that the debate about charging was likely to move "at the speed of glacier". Fast or slow, any proposals brought forward could receive a frosty reception in at least some quarters.

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