Editorial: The Charity Commission remains in special measures

There is no let-up in the intense scrutiny of the watchdog by the National Audit Office and the Public Accounts Committee, writes Stephen Cook

Stephen Cook
Stephen Cook

With the return to school looming, spare a thought for the Charity Commission as it continues to conduct its business under special measures imposed by the Public Accounts Committee and the National Audit Office. Last December the NAO published a highly critical report saying the charity regulator was failing in its key roles, and in February the PAC weighed in with its own strictures. Now the NAO’s investigators are back in the commission checking on progress: are you being tough on wrongdoing? On tax avoidance, terrorism, fraud? The verdict will be published after Christmas, to be followed by another quizzing by the PAC, chaired by Margaret Hodge MP. She has not shown much sympathy so far for the difficulties the commission faces, including the severe budget cuts it has been through in recent years.

The commission has accepted many of the criticisms of the NAO and the PAC, so it’s not as if it is being required to do many things it feels it shouldn’t do. The current board (appointed, coincidentally, at roughly the same time as the Cup Trust scandal broke and the latest scrutiny began) has not shown itself averse to the project of tightening and sharpening the regulatory functions of the commission: it is a tougher regime than the one that, some would say, let matters slide over the past decade or so. It might well have decided to adopt much of this project without having been hauled over the coals in public by the MPs and the spending watchdog.

All the same, it is difficult for any organisation to think constructively and plan for the longer term while an invigilator is looming over it. It’s bound to have an unnerving and chilling effect. There is also the question of whether the commission has the wherewithal to do what it is being required to do. Its chair, William Shawcross, has warned that it is not possible for the organisation to do all that is expected of it without improved funding – and the commission has indeed been cut beyond the requirements of austerity. There is also frustration on the legal front: Shawcross has called for new legal powers to close down rogue charities and disqualify trustees who are unfit or convicted of crime – no-brainers, one would think –  but the government is showing little sense of urgency on this. A pledge to bring forward a bill came in the last Queen’s Speech, but no detail or timetable was given and the legislation is unlikely to be tabled before the next election. The Cabinet Office is still mulling over a consultation on the subject that finished in February. If ministers are serious about turning the commission round, a bit of reciprocity would not come amiss.

Despite Hodge’s throwaway remark earlier in the year that the commission could be tossed onto the bonfire of the quangos, the fear seems to have receded that it really might be abolished and its functions handed over to HM Revenue & Customs. There is, however, still a concern that the process of registration could be taken over by HMRC, which would probably be less liberal with granting charitable status and the loss of tax revenue that goes with it.

This, then, is the political, financial and legal scenario that has greeted the new chief executive of the commission, Paula Sussex, who is now a couple of months into the job. She faces a demanding task. Her plan of action has not yet been revealed but will no doubt need to address matters of structure, staffing and reputation management. The status quo is hardly an option. There is a lot to play for and the commission will continue to live in interesting times for the foreseeable future.

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