Charging charities for regulation is 'inevitable', says Shawcross

Charity Commission chairman tells annual public meeting that the future funding of the regulator should be resolved within a year

William Shawcross
William Shawcross

It is inevitable that the charity sector will be required to make a financial contribution for the Charity Commission in the future, according to William Shawcross, the regulator’s chair.

Shawcross told attendees of the commission’s annual public meeting in central London yesterday that the issue of financing the regulator would be resolved within the next 12 months.

"I think it is inevitable that the sector will have to assume much more of the responsibility for funding its regulator," he said."It happens in many, many other parts of society and there is no reason why it should not happen in this one."

The commission’s funding from the Treasury has fallen by £8.9m since 2010/11 to £20.4m in this financial year. David Jones, the director of corporate services for the Charity Commission, told the meeting that the alternative to income from the sector would be that the commission would have to get "slightly smaller, slimmer and leaner" and "work a lot harder".

Shawcross said it was impossible for the commission to continue as an effective regulator while facing year-on-year cuts from the Treasury. But he said the taxpayer could not be expected to provide funding indefinitely.

The possibility of charities funding the commission themselves was something he had already begun exploring, he said, adding that he would "continue to do so in the course of this winter and early next year".

He said he accepted that it was a challenge for the sector. "And it’s my duty to persuade the sector that this is the best way of protecting it and ensuring it has an effective regulator for the future," he said.

The commission has been exploring the possibility of introducing a charging system for charities for several years.Shawcross said last year that the regulator might seek a fee from charities with incomes of more than £100,000 a year.

He recently told Third Sector: "The system I have discussed most often with charities is that of an annual fee to be paid to the commission. This would be negligible for the vast majority of charities that have small incomes and would rise proportionately with the size of charities."

The regulator this year commissioned research among the public that showed most people supported the idea of charities making some form of financial contribution towards the commission’s costs.

The guest speaker at yesterday's meeting, the Labour MP Frank Field, suggested the money could come from the £4bn of tax concessions to charity that came from the Treasury, such as Gift Aid.

Field said: "Might not the government think of top-slicing the £4bn to ensure the commissioners get a more independent source of funds?"

Such a move would be a "sign charities aren’t just an add-on to society, they play a crucial role", he said.

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