Stephen Cook: A defeat for the Charity Commission in all but name

A High Court hearing this week exposed the regulator's hasty actions over funding of the advocacy group Cage by the Joseph Rowntree Charitable Trust, writes Stephen Cook

Stephen Cook

It is not disputed that the Charity Commission used robust language when it sought and received an undertaking from the Joseph Rowntree Charitable Trust in March that the charity would never give money to Cage again. Its own press notice said that it required "unequivocal assurances" that the charity would not fund the advocacy group "now or in the future". If it was not relying on legal powers to pressurise the JRCT in this way, a common-sense observer could be forgiven for thinking it was.

By the time the affair came up for judicial review in front of the Lord Chief Justice this week, the commission was asserting, in much milder language, that it had not been seeking the assurances under any of its formal enforcement powers and was merely giving advice and guidance: if the charity had refused to give the assurances, the commission could not have compelled their production.

This is a bit like a footballer who brings down an opponent with a heavy tackle and then dances away, holding up his palms and smiling innocently when the other side complains to the referee. The ref, in this case the most senior judge in the land, did not reach for a card but gave the teams a talking-to and persuaded them to agree a form of words and shake hands.

If the commission had indeed merely been giving advice and guidance, as it asserts, why did it not make this clear at the time? Email exchanges quoted in the court say nothing about advice and use words such as "requirement", implying legal powers but stopping short of specifying them. The commission clearly wished to put the maximum possible pressure on the JRCT, regardless of the legal position.

So the next question is why the commission wanted to apply such pressure. At least part of the answer comes in emails, not quoted in court but now in the public domain, that show the chair of the commission and several board members were calling for the most robust action possible because of their suspicion or belief that Cage is a "front for jihadi terrorists".

As a result the commission seems to have decided to use all the means it could muster to achieve an end that it had to accept, in the agreed statement to the court that prompted the withdrawal of the judicial review by Cage and JRCT, was one that it does not have the legal power to achieve – namely, to fetter the discretion of the trustees of a charity both now and in the future.

The commission is now at pains to point out that this was not a defeat. Its statement "welcoming" the result seems to imply that it was a defeat for Cage because the case was withdrawn. But it was a defeat for the commission in all but name. Cage calls it a "climbdown", which is not a bad word for it. The judges clearly did not want to go through all the detail and reach a judgment. But if they had done so the decision – if their remarks in the hearing are anything to go by – would probably have been that the commission went too far.

The commission can therefore count itself fortunate to have got away with producing a statement that accepts, in general terms and without any reference to the specifics of this case, that it cannot fetter the future discretion of trustees. The question of whether or not it sought in fact to do that was thus discreetly left to one side.

Charities have a right to expect that their dealings with the commission happen on the basis of clear, transparent and proportionate application of the law. In this case, what they got was a hasty, impassioned, peremptory reaction, prompted at least in part by the intervention of board members who were deeply concerned about terrorism.

A number of expert commentators, including the late charity lawyer Stephen Lloyd and the National Council for Voluntary Organisations in a recent review of commission governance, have expressed concerns that the commission, as currently configured, is vulnerable to being perceived as politically biased. The National Audit Office has also expressed concern about the increasing involvement of board members in executive activities in recent times. On the face of it, this case has relevance to both these questions.

The commission now emphasises that all along it was seeking to pursue its statutory objective of increasing public trust and confidence in charities. Whether it has advanced that objective in this instance is a moot point. But it seems unlikely that charities will feel greater confidence in the commission after this case. There is already a feeling that the commission now puts enforcement above all else, and that feeling is likely to be stronger now.

Another concern is the apparent suggestion in commission statements during this episode that its job is to promote public trust and confidence not only in charity generally, but in each and every charity it might take an interest in from time to time, by requiring them to act in line with something the chair has called "what the public would expect". This is entirely different from the general objective and a dangerous threat to the independence of charities.

This court case was not about Cage – what it is and is not, and what it does or does not do. It was about the law. But Cage commissioned, and this week published, an independent inquiry into the press conference that sparked this whole affair. The inquiry is critical of the way Cage presented its information and the language that was used, and makes recommendations for the future. Whatever you think of Cage, this was a sensible thing to do. Would it be too much to expect the commission to do something similar?

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