The Charity Commission could have its budget cut by 8 per cent a year in real terms during the next spending round, according to Nick Allaway, the regulator's executive director of charity information and corporate services.
In his board paper for today's open board meeting in Llandudno, north Wales, Allaway says that December's pre-Budget report was silent on the likely funding levels for the commission beyond the Government's current three-year spending round, which finishes at the end of 2010/11.
But the commission is planning for a continuation of the 5 per cent year-on-year budget cut imposed on it during the current spending round, Allaway adds.
"Coupled with agreed increases in pay costs and the likely increase in inflation, this results in a real-terms annual reduction of around 8 per cent," he says.
Allaway warns that, despite successful recent efforts to make savings, the commission's current level of operation will become unsustainable if his prediction is correct. He says the implications for the organisation's strategic direction will be discussed at a board awayday next month.
Andrew Hind, chief executive of the commission, will tell the board that the number and complexity of registrations the commission is dealing with has created a "significant pressure point". The commission is registering previously excepted charities and is expected to begin registering previously exempt charities shortly.
In his board paper, Hind says the number of registration applications last November rose by 38 per cent compared with the same month in 2008. The increased numbers and a "significant volume of complex and high-risk applications" have forced the commission to transfer two extra people into its registrations division.
The average time for a registration to be processed in December was 39 days, against a target of 30. But the overall figure for the year to date remains only 28 days, Hind says.