Charity Commission favours new levy on charities

Dame Suzi Leather, the commission's chair, tells MPs a levy is the most attractive option for new sources of revenue, but it would require primary legislation

Dame Suzi Leather
Dame Suzi Leather

The Charity Commission would be in favour of introducing a levy on charities to fund its work if legislative change allowed it to do so, Dame Suzi Leather, its chair, has said.

At the annual hearing of the Public Administration Select Committee on the work of the regulator, held today (Tuesday), Kelvin Hopkins, the Labour MP for Luton North, asked Leather whether it had considered looking for new sources of funding.

"We have thought about this over the years," she said. "We couldn’t move to a levy on charities without primary legislation. When we have looked at different funding models, the most attractive one would be a unit cost on every charity, perhaps with a threshold below which you wouldn’t ask for money."

She said this threshold might be set at £10,000 so that charities with annual incomes of less than this would not pay.

Asked by Hopkins whether charging charities to regulate them could raise conflicts of interest, Leather said that this was possible, but several other regulators charged the organisations in their sector and that measures could be put in place to avoid conflicts.

Leather also said the commission should take a closer look at think tanks that are registered as charities.

In response to a question from the Conservative MP Charlie Elphicke, who said some charitable think tanks took a political stand on issues, she said: "This is a difficult area for the commission, and over the years we have had quite tricky questions raised about particular think tanks.

"I have suggested that we should look at think tanks generically in the next year or so," she said.

She said this might involve asking think tanks who provided their funding, which could be an indicator of whether they were too closely linked to a political party.

Leather also said that the number of complaints about the regulator’s decisions not to investigate complaints was likely to rise in the next year, because budget cuts meant it was likely to carry out fewer investigations.

She said the commission had already noticed a fall in the number of contacts it received from charities, after making it clear as part of its strategic review that cuts to its budget meant it had to cut down on offering one-to-one advice.

She said that the commission had run two rounds of voluntary exit schemes for its employees and between 20 and 25 more staff would have to leave before the financial year 2013-14 for the regulator to reach the targets for staffing levels in its strategic review.

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