Charities should not have to reveal salaries of highest-paid staff, sector bodies say

Nick Brooks of the accountancy firm Kingston Smith says the proposal, in the draft of the new Statement of Recommended Practice, could be harmful to charities

Nick Brooks
Nick Brooks

Charity and voluntary sector experts have warned against charities being made to reveal the salaries and job titles of their highest-paid employees in their accounts.

The Charity Commission and the Office of the Scottish Charity Regulator have published all the responses not submitted in confidence to their consultation on an "exposure draft" of the new Statement of Recommended Practice.

Under the existing rules, charities must disclose the salaries of employees earning more than £60,000 a year in bands of £10,000.

But the consultation on the draft, which closed in November, asked whether the next Sorp, due to be published in the summer, should require organisations to disclose the precise salaries and job titles of their highest-earning employees.

Many of the 179 responses warned against the idea.

Nick Brooks, a partner at the accountancy firm Kingston Smith, said in the submission from his company that it would not be a positive step.

"Given the negative press about the pay of charity employees, we feel that it might be harmful for charities to provide this disclosure in respect of the highest-paid employee, typically the chief executive," it said.

He said his company felt strongly that the existing band system provided sufficient information.

Brooks also said that any blanket requirement for larger charities to disclose the job title and remuneration of their highest-paid employees would also have the effect of requiring disclosure in respect of those whose remuneration was less than £60,000, which he said was "unnecessarily onerous".

The Charity Finance Group said in its submission that the move would be sensitive. Such disclosures "could alter decision-making by trustees on remuneration and redundancy payments because of the internal sensitivity around such payments in cases, to the detriment of the organisation", it said.  

The grant-maker the Tudor Trust also questioned the value of the idea. "Will the Charity Commission support the sector should this information be used in a defamatory way?" it asked. "And, conversely, would the commission seek to take action on levels of remuneration if it felt they were too high?"

Others, including the anti-poverty charity Tearfund, which does reveal the salary of its highest earners, said the move would add little value.

Others supported the idea. The voluntary sector publishing and training body the Directory of Social Change said the move was "clearly a matter of public interest and charities should be transparent about how charitable funds are being spent".

The Voluntary Sector Studies Network called for "maximum disclosure on salary information".

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