Liam Kay: Stop saying there's no money to fund the commission

If the government wants a well-regulated sector, writes the Third Sector reporter, it should fund the Charity Commission itself

Liam Kay
Liam Kay

That the government is awarding an additional £5m of "interim" money to the Charity Commission is, on the face it, great news.

It has been clear for some time that demands on the commission are increasing: applications to register with the commission are up by 40 per cent in the past four years, while the regulator’s budget has remained static at £20.3m.

This is during a period in which that budget fell to half of what it was in 2007 in real terms. No wonder the commission wants to launch a consultation on charging larger charities a levy to raise an additional £7.5m a year to support its engagement work.

And yet, this remains a toxic idea for many in the sector.

The Charity Finance Group argues that public taxation remains the fairest and most efficient way to fund the Charity Commission, and the National Council for Voluntary Organisations has said it does not believe that charities should pay for the core regulatory functions of the commission. 

It’s also important to note that these are difficult times for many charities, even the large ones with incomes of more than £5m a year that would potentially be subject to the levy.

The overall income of the sector might have risen to £75bn in 2017, but individual charities are struggling. In recent weeks, the RNIB and Age UK have posted difficult sets of financial results. An additional tax such as the levy is unlikely to be welcome by larger charities.

The commission will launch its long-delayed consultation on the levy later this year. But, as the awarding of the £5m shows, there is a somewhat false premise behind the consultation.

For a long time the government has argued that it has insufficient funding to award the relatively modest £7.5m a year that the commission says it requires. But time and time again the foundations of this argument have looked shaky.

Last year, the government found an additional £1bn for Northern Ireland to help secure the support of the Democratic Unionist Party in parliament. The Office for Civil Society has committed to spending £1.7bn on the National Citizen Service by 2020, even though other charities carry out similar work for a fraction of the price and there has been repeated disagreement about whether the NCS programme offers value for money.

A further £700m has been awarded by government in Libor fines since 2012, but the money is available only to armed forces and emergency services charities.

Even Boris Johnson, the foreign secretary, seems convinced that there is enough funding available to both spend £100m a week on the NHS and build a multibillion-pound bridge to France.

By awarding £5m to the Charity Commission, the government has shown that it can make money available for charity regulation if it so wishes. The simple fact is the government doesn’t want to spend any more on the commission and doesn’t value charity regulation enough to commit to what would be a small annual increase in its spending. If the government really wants a well-regulated charity sector, it should fund the commission itself.

Liam Kay is senior reporter at Third Sector

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