Peter Stanford: Enough tough talk - what we need is practical help

We need a healthy balance between enforcement and encouragement from the charity regulator, says our columnist

Peter Stanford
Peter Stanford

So we are unlikely to be charged fees for regulation, at least according to Sam Younger, chief executive of the Charity Commission - and who better to pronounce on the matter?

The proposal, you will recall, was raised in the wake of Lord Hodgson's review of the Charities Act 2006. As well as a fee to file annual accounts, punitive measures, such as fines or withdrawal of Gift Aid, were floated for those who filed late.

It is one of the habits of government and government-related bodies that I dislike: the tendency to test ideas by letting them hover in the public domain - potentially scaring those who will be affected - and then letting them wither on the vine if the reception is less than enthusiastic.

I was never sure if this particular idea was about raising more money for the commission by taking it away from charities' front-line work, or an attempt to be seen to be getting tough on regulation. The commission's budget is now set to fall from £29.3m in 2010/11 to £21.4m in 2014/15, so there is definitely a hole to fill.

In that short-term, short-circuiting Whitehall mindset that seems to dominate many of the current round of schemes and reforms to save public money, it would of course have appeared perfectly logical to replace state support for the work of the commission with money taken out of charities' budgets - no matter what the consequences. If enough fuss had been made, perhaps they would have come up with a tiny pot of money for a hardship fund to help those struggling to pay for regulation. Where do you start with such thinking? It's not a spending cut at all, but a shift in who pays that would most likely affect those least able to do so.

Thankfully, enough of us have made a fuss in advance for the charging idea to be shelved. Don't expect any thanks, of course - the best that Mr Younger could manage was the thought that such a scheme might have cost more to administer than it raised in fees and fines. This is a good practical point, but perhaps they might have considered that before floating the possibility.

There is, of course, a bigger governance debate that lies behind all of this: is the commission's role to encourage and enable charities to do their work better and more transparently, or to police the sector? After the Cup Trust fiasco and commission figures' humiliating appearances before a parliamentary select committee, the regulator seems keener on the latter. And the suggestion that a 'get tough' mentality is in the ascendant is reinforced by the recent appointments to the commission's board, which include a former senior police officer with no other apparent strong links to the work of our sector.

I'm not suggesting a free-for-all - that the commission should be the handmaiden of charities, servicing our every whim with a smile. But is a little understanding too much to ask? It is not only government finances that are squeezed. Many charities are finding it tougher to raise the money they need to do their work. Is it really a big problem if they are a couple of days late filing returns?

The commission's website already provides each and every one of us with a special graph to highlight when we have been late. That's naming and shaming enough. And what it should be accompanied by is evidence of understanding about why this might happen and appropriate support to prevent it happening again. Instead, we were threatened with a cosh. Thankfully, that has been withdrawn - but can we now hear about practical, helpful measures instead?

The other problem with all this tough talk is that it suggests something is fundamentally amiss in our sector's financial reporting. But donors insist on reading our annual accounts and then still give us money, so I wonder where this idea comes from. I certainly don't know of any credible source - and neither, it seems, does Mr Younger. "Wrongdoers are a tiny minority of a very large sector," he said. "We need to make sure we don't get this out of proportion."

Fine words - and ones that I hope he is also saying to his new board members. What we need is a healthy balance between enforcement and encouragement - what the government in other areas of its work calls nudging. Removing the threat of charging for regulation and fining for small technical breaches is a first step. I look forward to hearing more in the same vein.

Peter Stanford is a writer and broadcaster, and was a charity chair for more than 20 years

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