Charity Commission's financial situation is 'unsustainable', chair says

In response to a damning Public Accounts Committee report, William Shawcross says the regulator must be adequately funded if it is to meet the expectations placed on it

William Shawcross
William Shawcross

The chair of the Charity Commission has described the regulator’s financial situation as "simply unsustainable" in its response to the damning Public Accounts Committee report published in February.

William Shawcross, chair of the commission, said in a statement issued alongside the commission’s formal response to the PAC today: "If we are to fulfil all the expectations placed on us while at the same time increasing our serious case work, we must be adequately funded. Our current funding position is simply unsustainable."

In February, the PAC accused the commission of lacking a coherent strategy and failing to possess the ability to adequately address its shortcomings. It made four recommendations: the commission should develop a clearer vision, use its powers more effectively, improve leadership and put into action a robust change-management plan to tackle its "enduring failings".

In its response published today, the commission said it agreed with the first three PAC recommendations, but disagreed with the final recommendation. It said: "The commission rejects the charge that its record is one of ‘enduring failings’. It noted that since the PAC’s last scrutiny in 2002 there have been considerable changes not only in the commission’s statutory responsibilities, under the 2006 Act, but also in parliamentary and public expectations, as well as massive funding reductions in real terms."

It said the commission’s new board had already put in a "robust change-management plan" to tackle the problem areas identified by the National Audit Office.

Today’s formal response said the commission would make its case for additional resources by the autumn, after the conclusion of a review of its operations and costs. Last month, Lord Wallace of Saltaire, the Cabinet Office spokesman in the Lords, said the government would look "very carefully" at such a proposal if a "strong and positive case" were made.

Shawcross said in his statement that the regulator needed to be given stronger legal powers to prevent and tackle abuse and mismanagement. "We have long argued that our powers are inadequate," he said. "It is absurd, for example, that the commission has no general power to disqualify individuals who have demonstrated that they are unsuitable to serve as charity trustees. Earlier this year, the Cabinet Office consulted on proposals to strengthen our powers, which we fully supported. I urge the government to deliver on those proposals." 

He said he had written to David Cameron, the Prime Minister, to ask him to make sure the new powers could be created in the next session of parliament before the general election in May 2015.

But the commission noted in its response that it was unlikely to gain new powers to disqualify people from being trustees and deal with charity mismanagement before next year’s general election. It said it would continue to push for these powers nonetheless.  

A public consultation on its proposed new powers closed in February.

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