John Tizard: Charity Commission chair should be a critical friend to the sector

A recruitment process is currently under way to appoint a new chair of the regulator. Whoever is recruited, they must be a champion of the sector, writes our guest columnist

The outgoing chair of the Charity Commission, William Shawcross, has attracted much attention and strong challenge within the charity sector and beyond during his tenure. Indeed, he has spoken out on a range of issues, some of which have not always appeared to be directly relevant to the commission. And he has been accused of being partial in his political stance.  However, I don't intend to look back on Shaswcross' stewardship of the commission, but instead focus on what I believe we should expect see fr his successor when she or he takes over next year.

There are some immediate actions which the new chair should take to win friends and, more importantly, to declare their support for and understandning of the sector. These include an announcement that the proposal to charge charities for their regulation will not proceed. This would be enormously beneficial, especially to smaller charities, and would create the right relationship between the regulated and the regulator.

I should also like to hear the new chair state very clearly and without any ambiguity that charities have legitimacy when they campaign and lobby on behalf of their beneficiaries and society.  Indeed, it would be very encouraging if the new chair were to go further and advocate such activities as being critical to retaining charitable status.  She or he could themselves 'lobby' government to abolish or radically reform the lobbying act, and seek to persuade public sector procurers and grant makers not to impose 'gagging' clauses in contracts and funding agreements.

The new chair should also mobilise the commission to influence public sector commissioners and procurers (from local government to the police to the NHS to Whitehall) to adopt policies, processes and behaviours, which are conducive to charities and the voluntary and community sector undertaking public service delivery.  This should include arguing that contracts should be based on full-cost recovery plus some operating margin, and with no enforced charitable subsidisation of the public sector; and challenging whether such subsidisation is consistent with charitable status, and questioning why a charity would simply undertake public sector ‘paint-by-number’ contracts  She or he could go further and make the case for partnership grant aid being used instead of competitive contracting.

There is also an opportunity (if not necessity) to engage with the Treasury to ensure that tax policies are supportive of charitable activity.

Speak truth to power

I am in absolutely no doubt that a new chair who 'speaks truth to power' and makes these core to her or his agenda will gain much positive support from those whom the commission regulates.

The next chair must also be independent and not perceived to be a political placement.

From these suggestions, the commission, and its new chair, should be wiling to promote the sector and speak up for it. This is not to suggest that the commission should seek to replicate the role of the National Council for Voluntary Organisations, Acevo, Navca and other sector national leadership bodies. Far from it.

The commission is and must be foremost a regulator.  However, good regulators such as the National Audit Office and Ofsted also seek to use their platform and evidence base to influence public policy and practice.

As the sector regulator, the commission should be focus on governance and leadership above all else. Governance and leadership are what makes or breaks any charity.  The commission should be testing that these are in place while at the same time promoting exemplar practice. And, of course, demonstrating such exemplar practice itself. The commission's chair has a lead responsibility for this.

Other critical areas that the chair may wish the commission to focus on early in her or his tenure include:

  • Developing and adopting a clearly stated, risk-based regulatory framework
  • Developing and supporting some 'self-regulatory' approaches
  • Exploring with the sector ways in which the onus placed on trustees can be reduced in ways that promote trusteeship and effective governance
  • Strong and effective relationships with the main national and regional sector bodies, while defending the regulator's independence
  • Through such partnerships, supporting development programmes for chairs, trustees and executive leaders
  • Strengthening the commission's advisory service and support (this has been reduced as a consequence of funding cuts but is essential to many charities)
  • Building joint approaches to regulation and inspection with bodies such as Ofsted and Care Quality Commission - this is critical where services are subject to external inspection
  • Encouraging charities to consider mergers and shared approaches; and where appropriate closures
  • Promoting exemplar governance for charities including beneficiary and wider stakeholder meaningful engagement and involvement; and leading by example at the commission.

The chair will need to work with his or her fellow commissioners and the chief executive to ensure that the commission itself is fit for purpose and have in place the policies, systems, processes and behaviours that enable the charity sector to be effective. The government has wrongly reduced the commission's financial resources and, consequently, it is a much smaller body than it used to be. It therefore has to be smarter in the ways in which it operates and intelligently selective in what it does. It must also have the confidence and respect of the sector itself so there is a case for the establishment of an advisory group which would be reflective of the range of charities and drawn from trustees, executives and perhaps beneficiaries.

Need for new legislation

Charity legislation has been tinkered with over the years but there has not been a major review for a very long time.  The commission should thus foster a debate - to include the sector itself, the business sector, social enterprise sector, the public sector, politicians, academics and other civil society interests. I would anticipate the remit to include reviewing:

  • The definition of charity and charitable purpose so that they are contemporary
  • Governance structures and regulations, including forms of incorporation
  • Charity financing
  • Financial regulations
  • Relationships with other sectors
  • How the charity sector's 'independence' can be protected
  • Charity regulation, including the role and form of the Charity Commission itself

The next chair is not going to be short of issues to pursue. Indeed, her or his in-tray will be full even before many of the issues I have identified in this piece might be considered. So, my advice is to consider the issues I have identified immediately and then decide what to address and in what order.  I suspect that there will be several years of work to do and the chair will have to ensure that the focus is on those issues which the sector requires the commission to address. The fundamental issues must not be ducked.

My penultimate recommendation is for the new chair to get out of the office - visiting charities around the country to witness first hand their action and impact, and to meet on-the-ground staff, volunteers, beneficiaries and partners as well as trustees and senior staff.  Visibility will also be enhanced by speaking at conferences, writing articles and attending sector and other sector conferences. Critically, the chair needs to be an enthusiastic ambassador for the sector and not just the commission. She or he must demonstrate their independence of government.

Above all, they must restore the credibility and respect of the commission with many in the charity sector and beyond, and demonstrate its relevance and positive support for charities and charitable activity.

I wish the new Charity Commission chair well.

John Tizard (@johntizard) is an independent strategic adviser and commentator; and a former voluntary sector executive. He is now a trustee and chair.

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