A group of sector umbrella bodies have written to the Chancellor, George Osborne, calling on him to restore Charity Commission funding to its 2009/10 level in the forthcoming Budget.
In a letter sent to the Treasury today, the Charity Finance Group, the Small Charities Coalition, the Association of Charitable Foundations and the local infrastructure body Navca say it was a false economy to cut the commission’s budget, which has roughly halved in real terms since 2008 and has fallen by £8m since 2010.
It calls for Osborne to commit to maintaining the commission’s funding at 2010 levels until the end of the parliament in his spring Budget, due to be presented to parliament on 16 March.
The letter also rejects the idea that charities themselves should pay to make up the shortfall.
It says cuts to the commission budget are "putting a range of services, including advice and guidance services for trustees, under threat".
It says: "At a time when trustees – the vast majority of which are volunteers – are being asked to raise their game, there is a risk that they will not receive the necessary support to do this.
"The commission’s support functions, far from being ‘nice to have’, are a wise and cost-effective investment that will reduce demand for more expensive interventions when charities do not meet regulatory standards. This will also improve public confidence in charities."
The letter acknowledges that savings are required across government but argues that spending on charity regulation should be seen as an investment that could help well-intentioned trustees avoid mistakes before they hit crisis point.
"The amounts that have been cut are insignificant in comparison with total public spending, yet they have a massive knock-on effect on a vast part of civil society and its ability to serve millions of people," the letter says.
The commission is set to consult on the possibility of charging charities for their own regulation, but the letter’s signatories say they do not believe this should be an option because it risks undermining the commission’s independence and would take money directly from charities’ causes.
The letter cites evidence from the CFG and the University of Kent, which it says found there was a "significant risk" that a charity-funded commission would undermine the commission’s perceived independence and public confidence
It also cites comments made by the Public Administration Committee in 2012 that charging charities for their regulation would be tantamount to a charity tax and would be "absurd", because the Treasury would be giving tax relief with one hand, only to claw it back with the other.
Caron Bradshaw, chief executive of the CFG, said in a statement that the commission needed a funding model that was "fit for purpose rather than one that is driven by a desire to cut government spending".
Neil Cleeveley, chief executive of Navca, said in a statement: "Charging benefits nobody, least of all the public who give so much time and money to charitable causes."