The Charity Commission has "tried to do too much and achieved too little", the Cabinet Office has said, following a critical National Audit Office report into the regulator’s work.
The Regulatory Effectiveness of the Charity Commission, published by the spending watchdog today, says the commission is failing in key roles and does not provide value for money.
The Cabinet Office oversees the work of the commission, which is an independent non-ministerial arm of government. In response to one of the NAO’s recommendations, the department has promised to carry out a consultation on whether there are gaps in the commission’s legal powers.
"In the past the Charity Commission tried to do too much and achieved too little," a spokesman for the Cabinet Office said. "This government expects the commission to focus on its core responsibility of regulating the sector."
He said William Shawcross, chair of the commission, and the regulator’s new board had started this work but "we all know there is much more to do".
Margaret Hodge, chair of the Public Accounts Committee, said the committee asked the NAO to investigate the commission earlier in the year after its inquiry into the Cup Trust, a £176m tax avoidance scheme involving a charity.
"Our inquiry into the Cup Trust raised serious questions about whether or not the Charity Commission is fit for purpose," she said. "This report suggests it is not.
"The failure of the Charity Commission to detect and tackle abuse effectively risks undermining public trust in the whole sector.
"The Charity Commission will appear before the Public Accounts Committee later this month and will have some tough questions to answer."
Lisa Nandy, the shadow minister for civil society, said the report painted a picture of a regulator "that is slow to act and simply isn't working".
"Strong regulation is essential for public confidence," she said. "Ministers need to take the recommendations seriously to ensure the public can have confidence in the charities they increasingly rely on."