Time was when the heads of the Charity Commission were quiet men (and they were always men). The chief charity commissioner and up to four more commissioners had the status of civil servants – most were, in fact, drawn from the civil service – and were therefore, in theory at least, no more than emanations of their minister, with no views of their own.
This began to change when the Charities Act 2006 made the commission into a body corporate, independent of ministers, with a chair and up to eight members chosen under the public appointments process. The change was a deliberate attempt to open up to wider influences an organisation that was seen as a hidebound administrative backwater.
The commission's first chair, Geraldine Peacock, was far from quiet: a former chief executive of Guide Dogs, she was full of ideas for change in the sector, but revealed no particular political allegiances. Her successor, Dame Suzi Leather, was quiet by comparison, but perceived by opponents as political because she was a Labour Party member and the government landed her with the controversial job of shaking up the public schools.
William Shawcross, the journalist and writer appointed as chair in 2012, is both outspoken and perceived by many to be sympathetic to the Conservatives, although he is not a party member.
Under him, the opening up of the commission envisaged in 2006 has, in a sense, reached its high point, and he is about to embark on his second term of three years.
'Disaster under Labour'
Controversy began at the time of his appointment in 2012, when one MP produced an article he had written two years earlier saying the country faced disaster under Labour and "only a vote for the Conservatives offers any hope of drawing back from the abyss". He has since avoided overtly political remarks in public, but has expressed opinions about the sector that prompts one charity leader to call him "a walking PR disaster". Most recently, he gave an interview to The Times in which he criticised the RSPCA and Oxfam, defended public schools and talked of a "victim culture" among Muslims.
During his tenure, however, the fortunes of the commission have been changing. Soon after he was appointed, it faced scathing criticism from the Public Accounts Committee, mainly about the Cup Trust, the charity set up as a tax-avoidance scheme. This was followed by a report from the National Audit Office in December 2013, which concluded that the commission was failing to regulate charities effectively and did not provide value for money.
During 2014, Shawcross and a new seven-strong board he appointed the previous year (see "The Shawcross Board") were instrumental in toughening up the commission's regulatory activities and scaling down the resources available to give advice and guidance to charities, of which more later. Shawcross also hired a new chief executive from the private sector, Paula Sussex, who has restructured the management and started to improve the digital systems.
The budget of the commission had been cut from £32m in 2007/08 to £21.5m in 2014/15, but in October last year the Prime Minister announced £8m over three years for it to improve its systems and processes and to tackle abuse in charities. And in January this year a follow-up report from the NAO said the commission was making good progress, which prompted sighs of relief at the watchdog's Pimlico HQ. The government has also agreed to give it new regulatory powers, in a bill currently before parliament.
Shawcross declined to give an interview to Third Sector for this article, but says in written answers to questions that the low point of his tenure so far was the first NAO report, and the high points the extra money and the second report. In the rocky early months, he had been planning not to serve a second term, but he now says he finds the job very rewarding, wishes he had gone into public service earlier and hopes to "see through the transformation programme and ensure the sustainability of the commission".
He says the commission cannot long survive as an effective regulator if threatened continually by budget cuts and has concluded – having initially said he was against it – that charging charities an annual fee is the way to achieve sustainability: "This would be negligible for the vast majority of charities, which have small incomes, and would rise proportionately with size."
The turnaround now apparently taking place at the commission has clearly pleased ministers, who reappointed him in February, even though his first term of office was not due to expire until October. This move, which would have bound the hands of a new government had there been a different result in the general election in May, has been criticised as an infringement of the public appointment rules, and it is widely asserted that ministers were advised against the move on ethical grounds.
So what do people make of Shawcross as his second term begins? Nick Hurd MP, who appointed him 14 months ago when he was charities minister in the coalition government, says: "It was a bold choice, and you can never be sure how it will work out until someone has been at the wicket. I've been impressed by the way he has set about the challenging task of protecting the integrity of a huge sector against a backdrop of change, painful budget cuts and significant morale issues.
"He's shown independence and leadership, and has managed change in quite a deft way. And he hasn't been passive – he's talked of the need for more powers and money, and he's got them. Getting £8m out of George Osborne is quite an achievement – I wish I'd known how to do that.
"He's not been afraid to speak his mind, which has upset a few people, but the sector shouldn't be afraid of challenge. And he's actually one of the least political people I've met. I've shared a bottle of wine with him and I got the impression he's just not very interested in the tribalism of politics."
Hurd says the appointment of the new board is one of Shawcross's most significant achievements. Its members have been criticised for having less voluntary sector experience than their predecessors and for a lack of diversity, but Hurd says the sector should remind itself what the commission is there for.
"It's not there to be a cosy friend of the sector, but to crack down on abuse and work as effectively as possible," he says. "In the past it drifted off its core mission. William has taken it back from there, given it some edge and got it more powers and resources. The sector should appreciate that. I deliberately chose him for not being strong on the sector because that underpins his independence."
What about the early reappointment? "I read it as the government's appreciation of what he was doing, against a background of uncomfortable stories about the sector," says Hurd. "I think the core reason why people wanted him to continue was to provide continuity of leadership."
Sir Stuart Etherington, chief executive of the National Council for Voluntary Organisations, gives Shawcross "a balanced scorecard". Unlike some sector leaders, he thinks the commission is right in its strategy of concentrating more on being an effective regulator than on giving help and advice to charities: "He's got more money from the government, which is positive; he's hired a good chief executive; and he's in the early stages of transforming the management of the commission.
"In the second half, I think he needs to balance the enforcement role with a bit more engagement and understanding of the dilemmas of the sector. He's right to be tough, but sometimes I feel he's just on the wrong side of the line. I'm not sure it's wise, for example, for him to name and shame individual charities, as he did in the recent Times interview. He could be a bit more nuanced and careful in public."
Etherington also thinks that remarks by Shawcross about terrorist infiltration of charities - he told The Times he was "sure money had been diverted" – should be based more on evidence. "If he has concerns, then – without breaking security considerations – he should be able to quantify what we are dealing with, and how, rather than just making broad statements."
Etherington is also concerned that commission members are too hands-on under Shawcross, blurring the distinction between strategic oversight and executive management. It will be instructive, he adds, to see the outcome of the judicial review in October of the commission's intervention early this year in the question of funding by the Joseph Rowntree Charitable Trust of the advocacy group Cage. "It will test the boundaries of the commission's powers," says Etherington.
What about Shawcross's politics? "William says he is not a member of a political party, but he has made statements from which you can deduce that he has strong views," says Etherington. "It's not so much about politicisation in his case as about making the transition from being a journalist, which consists of moving the debate on by means of controversy, to running what is still a quasi-judicial public body. In three years he should have made that transition, and I would look for more balanced and judicious comment in future."
Another person with close knowledge of the sector, who asks not be named, says that Shawcross, though thoroughly charming, has "a very ideological view of charities as doing good, but not challenging the established order of things. It's an unbalanced, old-fashioned, rather Daily Mail view of charities, which you see in a lot of the comments he has made publicly.
"He's by far the most ideological of all the people who have been in this role, which is bad for the sector at a time when it is in much more difficulty over fundraising and its general standing. His letting forth to The Times was very revealing - talking about sanctions against charities and taking a sideswipe at Muslims having a victim mentality. It's clear from his history that he's a neo-conservative, so I think he can't look at Muslim charities in a dispassionate way."
This observer notes that Shawcross is eloquent about the commission's statutory purpose of promoting public trust and confidence in charities, but thinks the commission's recent concentration on enforcement at the expense of advice might be undermining that purpose: "In the past, you could ring and talk about your problems – now they only step in afterwards, when there's trouble."
Kids Company, into which the commission opened a statutory inquiry only after it had collapsed, could be a case in point, he suggests. "They could have spotted that the charity was heading for trouble by taking in large sums but not keeping any reserves, and stepped in with some advice," he says. "The point is that you can't regulate this sector as if it was the energy industry or the banks – you need a blend of enforcement and help."
'Not much experience on the board'
Protest about the loss of advice and the paucity of sector experience on the commission board is echoed by several others, who also spoke off the record. "None of the board except Claire Dove have much practical experience of running a charity," says one. "They don't understand basic things like the difference between restricted and unrestricted funds, or that charities often register as limited companies because it's cheaper than trustee indemnity insurance."
This observer thinks Shawcross is not respected in the sector: "I quite like him and I don't think he's evil. But the sector thinks he's a walking PR disaster and a self-promoter, sounding off in an exaggerated way about unevidenced stuff, making cavalier remarks and criticising individual charities. I suspect there's a real chasm between the board and the staff, who care passionately about the sector and are not anti-charity."
The same observer accepts that Shawcross has successfully shifted attention away from the commission's failings and extracted extra money and the promise of new powers from the government, but also wonders if he has achieved this by cleverly and deliberately playing up the threat of terrorism - "not so much increasing public trust in charities as increasing the government's trust in the commission".
'Jumps on bandwagons'
Another seasoned observer of the commission develops the point about Shawcross's public utterances: "He seems to jump on bandwagons, and I wonder if what he says reflects any sort of discussion at all. It's as if he makes it up as he goes along or just airs his private views, which is damaging and makes it difficult for staff, who don't know how they should react when it's not coming out of the collective experience of the commission.
"I don't think the chair of the commission should take such a maverick approach and should instead exercise some self-restraint. When he's speaking it should be as chair of the commission, expressing the views and policies of the commission."
This observer also feels the commission's new focus on enforcement has been "a huge change, and I think Shawcross and his board very much support this approach, which is why they didn't put up a stronger case for a broader remit.
"There are a lot of problems with the new approach, in which money for investigations is ring-fenced and there is no money for advice and support. Small charities find it hard to get in touch now that they answer phones in the mornings only.
"And the mood music is much tougher – the tone, which comes from Shawcross, is not to give trustees the benefit of the doubt. Now everything is judged on public trust and confidence, which seems to equal what the Daily Mail thinks." This observer is concerned not only about the scant sector experience of Shawcross's board, but also about its gender and ethnic balance.
One sector figure from a Muslim charity says many Muslims are conscious of Shawcross's former trusteeship of the hawkish think tank the Henry Jackson Society and wonders how much he agrees with it. "It was a centrist outfit but now it seems more right wing," he says. "It seems critical of mainstream Muslim organisations, as if they don't do enough to condemn atrocities or stop them taking place."
In his written replies, Shawcross answers simply "no" to the question of whether he thinks the commission's relations with Muslim charities are affected by his former association with the HJS and things like the appearance of his name and that of board member Peter Clarke on the list of speakers at a recent security conference in Israel (at which neither actually spoke).
'Close to views of David Cameron'
Shawcross says his views are close to those of David Cameron, as expressed in a recent speech in which "the Prime Minister contrasted the bigotry, aggression and theocracy of Islamist extremism with liberal values. Islamist extremism is a huge threat to all societies and above all to Muslims."
He says that claims the commission is biased against Muslim charities are "completely unfounded in reality" and relations with Muslim charities are "good. We engage actively with charities in Muslim communities and Muslim charity leaders, holding and attending a number of public and private events."
Generally, his relationship with sector leaders and opinion-formers is also good, Shawcross says: "I can't agree with everyone all the time, and neither can they with me. But we have a good working relationship and we agree to disagree on some issues." Does he think he is popular and respected? "This is not a popularity contest! What matters is whether the commission is an excellent regulator. Our recent Populus research on trust and confidence in the commission showed that both charities and the public are very positive in this regard."
The Shawcross Board
Mike Ashley Appointed in October 2014 to replace Nazo Moosa. The former head of quality and risk management at the professional services firm KPMG is also a non-executive director at Barclays and a member of HM Treasury's audit committee. He chairs the commission's audit and risk committee.
Eryl Besse Appointed in May 2013. She is a Welsh-speaking solicitor with more than 30 years' experience and a former partner at both Linklaters and Debevoise & Plimpton. She is a member of the development committee at Magdalen College School in Oxford.
Peter Clarke Appointed in May 2013. Was head of the anti-terrorist branch at the Metropolitan Police at the time of the July 2005 bombings. Since retiring in 2008, he was a board member of the Serious Organised Crime Agency until 2013 and is now a crisis and risk manager for companies and a Crimestoppers trustee.
Claire Dove Appointed in May 2013. She is a social entrepreneur, chair of Social Enterprise UK and chief executive of the training organisation the Blackburne House Group, a social enterprise based in Liverpool. She is a trustee of Alder Hey Children's Hospital.
Orlando Fraser Appointed in May 2013. A barrister with commercial and fraud experience and losing parliamentary candidate for the Tories in North Devon in 2005. He chaired the Voluntary Sector Working Group for the report Breakthrough Britain, produced by Iain Duncan Smith's Centre for Social Justice in 2007.
Tony Leifer Appointed in May 2013. A solicitor and a partner until retirement at the media law firm Olswang. Now a member of the Board of Deputies of British Jews and chair of the Jewish Council for Racial Equality.
Gwythian Prins Appointed in May 2013. A former research professor at the London School of Economics. Was also senior academic adviser to the Defence Academy of the United Kingdom and a member of the Chief of the Defence Staff Strategy Advisory Panel. In 2013, he said charities should "stick to their knitting".