Charity Commission chair says it will work with HMRC to prevent more Cup Trusts

William Shawcross says that he wants access to a list of people deemed unfit by HMRC to hold responsible positions

William Shawcross
William Shawcross

The Charity Commission will work more closely with HM Revenue & Customs to ensure that a Cup Trust-type scandal won’t happen again, according to William Shawcross, chair of the regulator.

In an informal lunchtime talk to charity representatives and lawyers at the offices of the law firm Farrer & Co in London yesterday, Shawcross said the regulator was seeking access to a list of people deemed unfit by HMRC to hold positions of responsibility.

But he said the commission would not take on the role of invigilating trustees or telling charities whom they could or could not appoint as trustees.

"HMRC has a list of people whom it considers to be unfit to be put in responsible positions, and there is a possibility that they will share that list with us," he said.

Shawcross said that having such a list would not have prevented the Cup Trust being set up, but the commission was talking to HMRC about getting access to the list.

"But I don't think we could get into the task of deciding who should be trustees of 126,000 charities," he said.

Shawcross told MPs on the Public Accounts Committee earlier this month that the revelations about the Cup Trust, which raised £176.5m in private donations over two years but spent only £55,000 on good causes, had been "a disaster for the charity sector" and damaging to the commission.

He said yesterday that the regulator could be forced to charge charities for its services if it faced significant cuts to its budget. The commission’s budget is already falling from £29.3m in 2010/11 to £21.3m in 2014/15.

"It may be that the government and us will have to look for alternative funding models for the commission," said Shawcross. "Many people have said to me that most other industries fund their own regulators, so why should the charity business be any different? That would be a huge change, but I think it’s something we're going to have to consider."

When pressed for a possible timeframe for the introduction of a fee for charities, Shawcross said it would depend on what was contained in the government’s next spending review.

"The urgency depends partly on the next spending review, about which we may learn in the Budget," he said. "If cuts of 5 per cent are imposed upon us, we could probably manage that without any further cuts in our activities or staffing levels.

"But if it’s 10 or 15 per cent, we probably would have much more difficulty continuing the regulatory function that we are obliged to carry out, so the urgency really depends upon the extent to which the treasury is able to fund us."

Shawcross said the commission would like to have a debate with the voluntary sector about whether it wanted the regulator to continue offering services such as advice, and if they would prefer to fund the commission themselves.

"It's going to be a very, very hard debate, but I think it's something that we have to have," he said.

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