The Charity Commission might not have needed to open a statutory inquiry into Kids Company if it had acted earlier to prevent the charity’s collapse, according to Sir Stephen Bubb, chief executive of the organisation for charity leaders, Acevo.
Responding to the commission’s announcement last week that it had opened a statutory inquiry into the charity, which closed on 5 August, Bubb said the investigation was the equivalent of launching an inquiry into the causes and consequences of a fire, when the regulator should have undertaken the simpler and cheaper intervention of installing a smoke detector.
"Had the commission been discharging its responsibilities for the pastoral guidance of charities as well as its policing function then the need for investigation may not have arisen in the first place," he said in a statement. "Earlier triage intervention could well have prevented Kids Company from a fatal collapse of governance."
He also questioned whether the commission’s inaction before now was because of a lack of intelligence or knowledge of the seriousness of the charity’s problems. "Why, for example, did the charity’s annual returns with perilously low reserve levels not ring any bells?" he asked.
Bubb acknowledged that the regulator had been subject to funding cuts, which had hampered its activity and manoeuvrability, but said its activities had not engendered confidence that it was capable of discharging its mandate effectively.
He said the regulator should learn that it had a responsibility to provide general support and advice for charities.
A spokeswoman for the Charity Commission said it was not the regulator’s role to ensure that charities remained solvent.
"Trustees are responsible for the management and administration of their charities," she said. "Our role is to investigate concerns about charity management. We acted quickly when we identified specific regulatory concerns about Kids Company, including to ensure the trustees took steps to address the concerns.
"It is in light of the continued intense public scrutiny and speculation over the charity’s activities, and the increasing number of allegations in the public domain about its governance and financial management, that we have now formalised our engagement in a statutory inquiry to investigate and put on the public record whether or not these allegations are found to be true."
Bubb’s comments are the latest in a series of recent criticisms about the commission from the Acevo chief executive.
In June, Bubb criticised the commission’s chair, William Shawcross, for saying the voluntary sector was in crisis after the public outcry over the death of Olive Cooke.
In March he said it was "regrettable" that the commission had been accused of adopting an "unbalanced" approach in its dealings with Islamic charities.
In January he expressed concern that Shawcross’s reappointment to the post of chair had been done "on the quiet", which was denied by the Cabinet Office.