Stephen Cook: A farewell to Shawcross

The outgoing chair of the Charity Commission might have fared better had he been less colourful and a bit more boring, writes Third Sector's contributing editor

Stephen Cook
Stephen Cook

People sometimes say that the Charity Commission was a in a bad way when William Shawcross was appointed as chair in 2012 and that he has succeeded since then in turning it around and making it robust and effective.

The reality is less simple. Under the previous chair, Dame Suzi Leather, the commission did many good things. It improved the register of charities and drew up guidance, albeit with hiccups, on the new public benefit requirement. It also tried to work with the grain of the sector.

Under Shawcross, who leaves at the end of January, the commission has become more austere, focusing on enforcement and opening more inquiries. It has emphasised that it represents the interests of the public. The mood music has become harsher.

This change of emphasis appears to reflect Shawcross’s own instincts. But it was to some extent forced on the commission by events. Under Leather, it had not blown the whistle on the Cup Trust, a tax-avoidance scheme set up as a charity, and the scandal came to light in Shawcross’s first months.

The political uproar that followed meant that the commission had little option but to act on the recommendations of a highly critical National Audit Office report instigated by the Public Accounts Committee, chaired by Dame Margaret Hodge, then a Labour MP.

The NAO said the commission was failing in key respects and should beef up its enforcement work, improve its IT and generally tighten up the way it works. With the help of a new, process-focused chief executive, Paula Sussex, what the commission calls a "transformation" has largely come to pass. Inquiries and the use of statutory powers have both risen dramatically.

This has put the commission in a safer place politically. Before 2012, many Conservative MPs did not rate it and the Daily Mail repeatedly attacked Leather as a "quango queen". There were suggestions, even from Hodge in 2013, that it could go on the coalition government’s bonfire of the quangos.

That has changed. The commission is now well regarded in parliament and Shawcross is a favourite of governments since 2010: the coalition re-appointed him in February 2015, eight months before the expiry of his first three-year term, thus pre-empting the possibility that, should Labour win the election in June that year, someone else would be installed.

The downside of the Shawcross years is a considerably more difficult relationship with the sector and its leaders. One factor in this was the decline in help and advice to charities: because of budget cuts that began in 2010 and have almost halved the commission’s income, it could not maintain a high level of support and advice to charities while also implementing the new enforcement agenda.

A stronger factor has been Shawcross himself. Early on he freely expressed his personal scepticism about matters such as street fundraising and service delivery by charities, and repeatedly warned about the dangers of Muslim charities being exploited by Islamist extremists.

When new board members were appointed in 2013, at least two had a hawkish outlook similar to his own, and one became famous for saying charities should "stick to their knitting". Only one had significant sector experience and, unlike others, was not invited for a second term in 2016.

The activities of the board also became controversial. The NOA said in a follow-up report that it was so deeply involved in executive matters that its oversight function could be compromised. Although the commission is a non-ministerial government department, Shawcross also used a political adviser, as ministers do.

A corrective came in the High Court in September 2015 when the commission had to accept that it had gone beyond its powers in demanding an undertaking from the Joseph Rowntree Charitable Trust that it would never again fund the advocacy organisation Cage. Shawcross and some board members had made the running in this affair, expressing outrage at the news that Cage had in the past helped the man who later went to Syria and became the IS executioner "Jihadi John".

Overall, the belief gained ground in the sector that Shawcross, despite his repeated remarks about charities being the golden thread in the fabric of society, saw his and the commission’s role mainly as a policing one. This gave rise to suspicion about how the commission intended to use the law passed in 2016 that gave it new powers to warn charities and disqualify unsuitable trustees.

Shawcross demonstrated a certain independence from government in his repeated complaints about budget cuts, and succeeded in obtaining extra funds, first in in 2014 and again just before his departure, when the commission received interim annual funding of £5m, equivalent to nearly 25 per cent of its current budget.

But Shawcross eventually decided, despite his early reservations, to seek permission for the commission to raise more than £7m a year from the largest charities – a proposal widely opposed in the sector, which is now likely to argue that it should be dropped and the interim public funding retained and increased.

In other respects, independence has been less evident. His silence on the negative effect on the sector of the lobbying act and the inclusion (now abandoned) of a no-lobbying clause in government contracts fuelled the impression that he did not value or wish to defend the campaigning role of charities. This impression was confirmed when the commission issued highly restrictive guidance – withdrawn after challenge – about charities campaigning in the EU referendum in 2016.

On fundraising, Shawcross also joined the criticism without restraint when ministers and the press raised an outcry over the malpractice brought to light after the Olive Cooke case. His favoured outlets were The Times and The Daily/Sunday Telegraph, with which he was familiar from his earlier career as an author and journalist.

The overarching statutory purpose of the commission is to increase public trust and confidence in charities, and Shawcross was right to emphasise that trust and confidence fade without robust regulation. He also laid to rest the misguided notion that the role of the commission is to court popularity in the sector or act as its cheerleader.

But some of the unpopularity and suspicion engendered during his tenure has been unnecessary and counterproductive. Much of it has resulted from Shawcross criticising charities and airing his private views rather than being guided by the policies and corporate experience of the commission. It might have been better all round if he had, in a sense, been less colourful and more boring.

Behind the controversies of both the Shawcross and the Leather regimes lies the decision in the Charities Act 2006 to end control of the regulator by a small number of commissioners, who were civil servants, and give it corporate status, with a chair chosen by the public appointments process.

The intention might have been to open up the commission’s leadership to the wider world, but the increasing politicisation of the public appointments system in recent years has meant that successive governments have often appointed people in their own image to public bodies, rather than the best-qualified candidate.

In the case of the commission, Leather, appointed by the Labour government in 2006, was and remained a Labour Party member. That was inevitably used against her, even though she had much relevant experience, was more corporate in her approach than Shawcross and did not give free rein to her personal opinions.

Shawcross, appointed by the coalition in 2012, was not a member of the Conservative Party, but had published his support for it. Was an author and journalist with outspoken opinions on geopolitics but no experience of working in or leading an organisation of any kind really the best person to head the regulator of charities?

Where the commission goes from here therefore depends to a large extent on whom the government appoints as the new chair. It was reported before Christmas that one candidate under consideration was the former charities minister, Rob Wilson. If he is appointed, this would only confirm the politicisation of the public appointments process.

A preferable appointment would be someone whose experience and interests lie away from politics and centre instead on good governance and administration, both of the commission itself and the sector. This would make it easier to rebuild bridges that have crumbled and revive the important enabling role of the commission that is being emphasised by the current chief executive, Helen Stephenson.

Stephen Cook is contributing editor at Third Sector

Have you registered with us yet?

Register now to enjoy more articles and free email bulletins

Already registered?
Sign in

Latest Governance Jobs

RSS Feed

Third Sector Insight

Sponsored webcasts, surveys and expert reports from Third Sector partners


Expert hub

Insurance advice from Markel

How bad can cyber crime really get: cyber fraud #1

Promotion from Markel

In the first of a series, we investigate the risks to charities from having flawed cyber security - and why we need to up our game...