'Self-regulation key to policing terror threat'

Promoting effective governance, rather than increasing regulatory intervention, is the key to ensuring charity funds are not used to support terrorism, according to Andrew Hind, chief executive of the Charity Commission.

In his keynote address yesterday to the annual conference of the defence and security forum the Royal United Services Institute, Hind also confirmed that the commission would be working more closely with law enforcement agencies and government departments to investigate charities’ links with terrorism.

Hind was responding to a joint Treasury and Home Office review published in May, which criticised the commission for not being sufficiently proactive in identifying and acting on the diversion of charitable funds to terrorist organisations.

“I find it interesting that regulation is often mistakenly thought to be about control,” he said. “More regulation is not necessarily effective regulation. Prevention is always better than cure. We will have the greatest impact on minimising the sector’s exposure to the risk of terrorist abuse by encouraging and supporting the development of robust, accountable and transparent governance in charities.”

He said good governance meant effective internal financial controls, clear audit trails and accountability. “Supporting charities to develop these characteristics where they are weak, monitoring them to ensure they remain in place and intervening immediately where their absence causes risks to funds, beneficiaries or reputation has produced robust results for us over the years,” he said.

Hind admitted that a growing amount of commission resources are being devoted to managing the terrorist threat, but insisted that the threat shouldn’t be overstated. He pointed out that only seven of the commission’s 121 current open cases involved allegations of links with terrorism.

He also warned that forcing legitimate charities to go underground would remove the commission’s ability to make sure their funds were used for charitable purposes. “Effective regulation of charities must make them part of the solution, not part of the problem,” he said.

The commission will issue a full written response to the review next week. The Home Office and Treasury will be consulting on the review document until 2 August.

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