News analysis: Is the regulatory touch too light?

Some fear the Charity Commission's revised guidance renders the regulator less effective.

Charity Commission: changed guidance
Charity Commission: changed guidance

"It is a fairly safe bet that some trustees don't tell us about problems because of their concerns about heavy-handed regulation," Rosie Chapman, executive director of policy and effectiveness at the Charity Commission, wrote in her Third Sector column last week.

The regulator has responded by writing a new version of its CC47 guidance on complaints about charities. The hope is that, by spreading the word about the 'risk and proportionality' approach that was hammered out during the commission's 2005 strategic review, the guidance will both discourage trivial complaints and encourage trustees to report serious problems without fear of becoming the subject of a formal enquiry.

In a nutshell, the commission will investigate only those complaints it thinks imply a "serious risk of significant harm to or abuse of a charity, its assets, beneficiaries or reputation". This is unpacked into nine situations that the commission wants to know about, including threats to charities' independence, finances or vulnerable beneficiaries.

Better signposting

Ben Wittenberg, director of policy and research at the Directory of Social Change, thinks this list is clear. His only criticism of CC47 is that it could do more than list the contact details of other bodies that might take up complaints falling outside the commission's criteria. He thinks the commission could spare itself from extra questions by including a bit more information about the remit of the other bodies.

But not everyone is so positive. Adam Rothwell, director of donor information charity Intelligent Giving, calls the new CC47 "bizarre" and "very confusing". He questions the clarity of the phrase "serious non-compliance" which, according to CC47, is something that should be reported if it threatens a charity's reputation or public trust in the commission's effectiveness.

He is also puzzled about how the commission's call for people to report "criminality within or involving a charity" tallies with its statement that its remit "does not extend to investigating criminal activity". Rothwell asks: "If we can't understand it - and we spend all day looking at commission documents - then what chance will members of the public have?"

He also points out that the new CC47 does not reproduce the 2003 version's list of situations that the commission would always investigate, such as when a charity has been involved in "improper political activity" or incurred "excessive fundraising and administration costs".

Jonathan Brinsden, a senior associate at law firm Bircham Dyson Bell, agrees that the new CC47 has "moved from the specific to the general". He says: "It makes it harder for someone to decide whether they have cause for complaint."

He points out that the commission relies more heavily than ever on whistleblowers now that it has stopped review visits of charities. He says that such loose language gives the commission discretion to decide what it wants to investigate in the light of the budgetary pressures it is facing.

A spokeswoman for the regulator says CC47 has been revised partly to manage expectations about what the commission will investigate, but denies that its publication is linked to a desire to further reduce the workload of its compliance unit. "It simply sets out a policy that has been in place for more than two years," she says.

But does it even matter what is in CC47? Brinsden says that few potential complainers will stop to scour the commission's website for a policy document before making the complaint. Nor does the commission have any plans to flag up the new CC47 more prominently than its predecessor - perhaps on a 'do you want to make a complaint?' link on its home page.

Wittenberg says there is a "balance to be struck between making it straightforward for legitimate complaints and attracting all manner of random or unsubstantiated feedback, complaints and gripes that the commission would be unable to deal with, even if it should".

According to the spokeswoman, most complainers start by telephoning the commission's contact centre, so staff refer them to CC47. And those who go straight to the website can use the Google-powered search function to look for documents related to 'complaining', or some similar term.

According to Rothwell, the commission would be well advised to keep CC47 hidden in some dark corner of cyberspace, because he thinks public trust in charities would be undermined if they knew how light the regulator's touch actually was: "The public expects the commission to hold the sector to account. The guidance in CC47 is so lax that it undermines the commission's ability to do that."

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