The Charity Commission does not have the resources to fulfil all the statutory objectives it was given by the Charities Act 2006, a House of Commons committee says today.
The report from the Public Administration Select Committee, the result of its investigation into the regulation of the sector, says that the objectives of the commission set out in the 2006 act, are "far too vague and aspirational in character to determine what the Charity Commission should do, given the limitations on its resources, to fulfil its statutory objectives".
It says the objectives in the 2006 act "represented an ambition which the commission could never fulfil", even before cuts to its budget, which the report says have in effect halved its staff since the act was passed.
"Ministers must decide whether they think it is necessary to have a proactive regulator of the charitable sector," the report says. "If so, the government must increase the commission’s budget and ask parliament to clarify its powers.
"If funding cannot be found for the commission to carry out such a role, ministers should be explicit that they accept that the regulatory role of the commission will, by necessity, be limited."
It says that the Cabinet Office must allow the commission to focus on regulation, rather than on some of its other statutory objectives.
"The commission is not resourced, for example, ‘to promote the effective use of charitable resources’ or, for that matter, to oversee a reappraisal of what is meant by ‘public benefit’, nor is it ever likely to be," the report says.
"The commission also risks a conflict of interest. It cannot simultaneously maintain public trust in the charitable sector while also acting as a champion of charities and the charitable sector. The latter should be a role for the sector’s umbrella bodies and not its regulator."
The report also opposes proposals to raise extra funds for the Charity Commission by charging charities for registration, which was made by Lord Hodgson of Astley Abbotts as part of his review of the Charities Act 2006.
"We do not support Lord Hodgson’s recommendation for the introduction of charges for the registration of new charities or the submission of annual returns," the report says. "To do so would act as a block on the creation of new charities and the dynamism and charitable spirit of the volunteers working hard in their communities. It would be, quite simply, a tax on charities and charitable work."
But the committee does come out in support of a system of fines for charities that fail to file accounts on time.
The report also says it does not support proposals to raise the threshold for registration with the Charity Commission from £5,000 to £25,000, as Lord Hodgson recommends.
It also supports the development of a joint filing system with Companies House and the "passporting" of applications and documents for cross-border charities.