Editorial: Has the Charity Commission been left in the role of Cinderella?

At the beginning of the year Dame Suzi Leather spoke publicly about her growing frustration over the budget restrictions at the Charity Commission.

The Government has reduced the commission's income by 5 per cent a year for three years running, even though it is in the process of taking on a raft of new responsibilities under the Charities Act 2006. These range from the lengthy and exhaustive process of introducing the public benefit regime to the setting up and administration of a new licensing system for public collections, due to start next year. Dame Suzi's concern is shared by other senior charity sector figures, some of whom now feel that the time has come for a full and open debate about whether the current method of financing the commission is sustainable.

The commission is that rare animal, a non-ministerial government department. Like all government departments, it depends on the Treasury for the money it needs. Unlike other departments, however, it does not have a minister to argue its case directly in the higher reaches of government. The Office of the Third Sector has some interest in the commission, but naturally leans towards putting any available money into more front-line, eye-catching initiatives than the financing of the regulator. The commission is regarded as an administrative department rather than a service delivery department, and everyone knows that services attract more votes than employing civil servants. As charity lawyer Stephen Lloyd commented in our story on this issue last week, the commission is between a rock and a hard place.

An organisation that wants more money has to demonstrate a good track record. The commission can argue that it has done well on efficiency savings and made the best possible use of the money it does get: it has drawn up and implemented a strategic plan that shows many signs of success, and it has significantly improved its methods of responding to queries from charities and the public. It does not give the impression of being a flabby organisation. Some of its harshest critics are less vocal than they used to be.

One suggestion for the future is that the commission should set up a trading arm and make the most of its intellectual property. Another is that it should charge for some services, including registration, and fine charities that submit their accounts late. Both might be useful, although the former might not yield significant income and the latter might be seen as inimical to the spirit of charity. But there is also a case, as with other organisations whose work is vital to the body politic but not necessarily popular with ministers, for taking some of the politics out of decisions about the funding of the commission.

One model that has been suggested is the Electoral Commission, which has its budget decided not by the Government, but by the Speaker's Committee. It earns part of its income and the rest is voted by Parliament, with the National Audit Office keeping a watching brief on efficiency and effectiveness and making recommendations. Why not establish a similar regime for the commission? It's hardly satisfactory, at a time when charities and the voluntary sector are basking in the sunshine of government attention, for the organisation responsible for regulation to be left in the role of Cinderella.

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