Sir Stuart Etherington, chief executive of the National Council for Voluntary Organisations, has urged the Charity Commission to return to a "more conventional division between governance and the executive", in line with a recommendation of the National Audit Office report on the regulator.
Etherington and other voluntary sector leaders have welcomed the publication this morning of the spending watchdog’s follow-up report on the commission, which says the regulator has made good early progress on addressing criticism of its performance, but that much hard work and significant challenges remain.
The report notes that the commission’s board is more involved in the organisation’s executive functions than would normally be the case. It says this can be justified in light of the transformation programme, but there is a risk that if the board continued this for too long, it might "limit its independence and ability to hold the executive to account effectively".
Etherington said: "We are particularly keen to see the commission return to a more conventional division between governance and executive. We look forward to seeing the results of the governance audit being carried out in the coming months."
He said that the report "reflects significant progress, for which the commission and its staff deserve much credit", and he hoped the commission would begin publishing "regular, comprehensive indicators of its operational performance in all areas".
Caron Bradshaw, chief executive of the Charity Finance Group, reiterated Etherington’s view and said it was "important as the commission moves through this transition phase that the board follows the NAO’s recommendation to review its executive involvement so that its independence is maintained".
In a profile of Paula Sussex, chief executive of the commission, in the November edition of Third Sector, many people highlighted the nature of the relationship between Sussex and her board as a key question to be resolved.
Other challenges identified by the NAO include finalising the commission’s new framework for evaluating the risk of charities being abused, developing a better understand of its cost-effectiveness and future costs, and demonstrating to stakeholders how its new approach works.
Asheem Singh, director of public policy at the charity leaders group Acevo, described the report as encouraging, but said the commission should "be absolutely clear that it is on a process of change that will take some time. This is but one staging point."
Singh said: "The National Audit Office is clear that the commission must work with charities to consult on and explain its new regulatory approach. This cannot be a mere PR exercise."
Jay Kennedy, head of policy at the support and training charity the Directory of Social Change, said the report addressed the wrong questions. "You simply can’t make a sound judgement on the regulatory effectiveness of the Charity Commission without fully considering the commission’s core responsibilities of providing advice and guidance to charities and information via the public register," he said.
Kennedy said the report "mentions the phrase ‘robust’ regulator several times but without any clear explanation of what this means".
A spokeswoman for the Cabinet Office said: "The Charity Commission has made good progress and is taking steps to address long-standing weaknesses. We will continue to support the commission in its ongoing work to become a more robust and proactive regulator."