Looks like commission impossible

A huge new workload and threats to its budget add up to tough times at the regulator.

If you value your work-life balance, now may not be the best time to apply for a job at the Charity Commission. The new responsibilities that have been entrusted to the regulator by the Charities Act 2006 include the registration of exempt and excepted charities, the creation of the charitable incorporated organisation, new rules on mergers and the implementation of the new licensing regime for public charitable collections. And, thanks to a consummate act of buck-passing by parliamentarians, the commission will also have to decide what public benefit means and make sure that all charities conform with that definition.

It's a tough ask at the best of times, but Harmsworth House, once considered a fusty outpost of the civil service, might also have to implement the provisions of the Charities Act with a reduced budget. The commission is currently in negotiation with the Treasury over its budget for 2008 to 2011. This is taking place in the context of the Government's stated ambition for a 5 per cent annual reduction in core funding for all departments.

At the regulator's annual open board meeting earlier this month, Andrew Hind, the commission's chief executive, admitted: "We may have to stop some of the things we do." Outsiders are more candid. Stephen Lloyd, partner with charity specialist law firm Bates, Wells & Braithwaite, believes the commission faces an impossible task. He says: "I have great sympathy for the fact that they are being asked to do a huge amount of extra work without any extra money."

The strain is already beginning to show. At present, the commission is operating on a frozen budget of £31m a year, which will nevertheless have to stretch to cover the first batch of Charities Act provisions, such as the consultation on public benefit, the new merger regime and the charitable incorporated organisation. The commission is on course to make £4.2m of Treasury-demanded efficiency savings through, for example, consolidating functions such as registration on one site. But that may not be enough.

About 350 commission staff went on a one-day strike as a part of a wider action against proposed Treasury spending cuts a fortnight ago. And one insider at the commission says cuts will happen. "We are continually pressing management to give us information on how we are going to cope with the work we've got to do on the resources we've got, but I'm not sure we've got substantial answers," says the source. "They are basically saying that they want to make some cuts but are not being specific about it." Staff expect cuts to happen before the beginning of the next spending review budget period in April 2008.

Terrorism supervisory role

What must be worrying senior managers at the commission is that the regulator could be given extra duties over and above its role in implementing the Charities Act. Last October, Chancellor Gordon Brown mooted the idea that the whole register of charities should be examined to root out those suspected of having terrorist links.

The commission poured cold water on the idea, but a joint Home Office and Treasury review on that issue is due to report this month and a more expansive supervisory role for the Charity Commission could be one of its recommendations. "We are negotiating with the Government on new priorities," says Rosie Chapman, the commission's director of policy and effectiveness.

"And terrorism is something that is a priority for the Government."

If something has to give, it could be the licensing regime for public charitable collections. The new system is not scheduled to come into force until 2009 because, according to the Office of the Third Sector, the commission will need to equip itself to take on its new role in the scheme.

In Chapman's opinion, extra money will be needed. "We need to make sure how this is going to be funded," she says. "It's not an insignificant expense: you can't just fund it through efficiency savings we are making to meet needs elsewhere anyway."

Lloyd believes that the commission will have problems coping with a sudden influx of requests from 15,000 to 20,000 charities for public collection certificates. "I wouldn't be surprised if the reforms of public charitable collections go the way of similar provisions in the 1992 Charities Act and never get implemented," he says.

The practical law on charitable collections actually dates back to 1939, says Lloyd. And unless the commission can convince Gordon Brown to give it some more cash, Neville Chamberlain's government will still be determining where tins are shaken and chuggers may roam.

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