The Charity Commission has been urged by one of its former board members to abandon any plans of charging charities to plug its decline in funding.
Andrew Purkis, who was a charity commissioner from 2006 to 2010, told Third Sector that Helen Stephenson, the commission's chief executive, and her predecessor, Paula Sussex, had made "softening-up statements" indicating they were in favour of either a levy on charities or charging for services.
Purkis said he hoped his open letter to Baroness Stowell, the chair of the commission, might deter the regulator from issuing a formal proposal this autumn.
Writing in his current capacity as a trustee of the Directory of Social Change, which is running a campaign against charging charities, Purkis says all the potential methods of charging have huge problems.
A levy on all or most charities, he argues, could undermine the commission's independence and pose "a formidable administrative nightmare – which might be disproportionate to the revenue raised".
Charging only larger charities, writes Purkis, would be "arbitrary and unfair" on donors and "would be the thin end of the wedge, leading to progressive atrophy of public expenditure on charity regulation".
Purkis says trustees and donors might have fewer objections to paying for specific services, but "the charity sector is accustomed to a bargain with society where services from the commission are available free at the point of need", and ending this could also lead to poorer compliance.
Purkis concludes: "This whole issue needs to be rethought from fundamental principles. Namely, how can we achieve a sufficient level of predictable funding to support the Charity Commission’s vital work in a way that enhances rather than risks its independence and which is fair to charities (and their distinctive role in society) and the donating public?"
A DSC statement, issued to promote Purkis's letter, speculates that the sector could be heading for a clash.
"The leading policy idea, which could be out for consultation soon, is said to be a levy on larger charities to raise about £7m per year, but other models of charging may also be on the table," the statement says.
A DSC spokesman told Third Sector it had heard "through the grapevine" that the commission was moving towards charging and it hoped Purkis's letter might shape the debate before "a potential confrontation" in the autumn.
Cuts to the commission’s Treasury funding mean its budget has fallen by £8m since 2010 and will be frozen at £20.3m a year until 2020.
Stowell's predecessor, William Shawcross, said in January that he hoped the commission would launch a consultation on plans to charge for services by the end of that month.
A spokeswoman for the commission said: "We have been clear for some time of the need for our funding to be sufficient and sustainable if we are to meet rising and legitimate expectations of the public and charities into the future.
"As previously announced, we are currently working on our new strategy, which will be launched in the autumn. We will not be bringing forward proposals on our future funding until that five-year plan has been published."