The ups and downs of the Shawcross years

After more than five years as chair of the Charity Commission, William Shawcross steps down at the end of January. Stephen Cook looks back on a tenure that has won praise from government but heavy criticism from within the charity sector

William Shawcross
William Shawcross

In September 2012, William Shawcross was appointed chair of the Charity Commission and walked into a "perfect storm". The description was his own, offered when he gave evidence to a select committee of MPs in November last year, two months before his second and final term was due to end.

Two elements of the storm had nothing to do with him: the commission’s earlier failure to take action on the Cup Trust, a tax-avoidance vehicle set up as a charity, and the deep cuts in its budget that started when the government embarked on austerity in 2010.

The third element was his suitability for the job, which was challenged by three
Labour and Lib Dem MPs on the Public Administration Select Committee because of his published support for the Conservative Party. They were outvoted by four Conservative members at the committee’s hearing to confirm his appointment.

The fallout from the Cup Trust scandal has now mostly blown over. The National Audit Office, which labelled the commission a failing regulator in 2013, recently issued a second follow-up report saying its processes had improved significantly.

The budget, now reduced by 40 per cent to £21.3m a year until 2020, remains a sore point. Shawcross has continuously pressed the government for relief and succeeded in 2014 in getting a one-off payment of £1m, plus £8m spread over three years. The commission is now waiting for the Treasury to approve a consultation on proposals to raise £7m from the biggest 2,000 charities.

Meanwhile, his suitability for the job has remained controversial. Two charities ministers, Nick Hurd and Rob Wilson, have backed him strongly, as have many
Conservative backbench MPs who disliked his predecessor, Dame Suzi Leather, who was a member of the Labour Party.

He's done a huge amount of work. I'd give him eight out of ten for struggling manfully in difficult circumstances

Paul Flynn, Labour MP for Newport West

But some opposition politicians and charity leaders have been critical, citing a lack of sector experience among board members appointed by him, and his pronouncements on issues ranging from public service delivery to fundraising, campaigning by charities and the risk of exploitation of Muslim charities by terrorists (See Timeline and Muslim charities, below).

So what’s the verdict on the Shawcross years? He declined to give an interview, but issued a statement saying he was "immensely proud" of the way the board and staff had "worked with tireless ingenuity, passion and skill" to become "the robust, proportionate and proactive regulatory body the public expects and charities need".

He said the commission had become much tougher, focusing on fraud, safeguarding and terrorist abuse, and was opening more investigations and using its statutory powers more. There was now a better registration system and trustee guidance had been improved.

He said he regretted the decline in public trust and confidence recorded by commission surveys, "but this did not surprise me – the fundraising scandal shone a light on widespread, unacceptable fundraising practice in household-name charities and shook public faith in charities, as did the collapse of Kids Company. There is now public scrutiny of charities in a way that there has never been before. Charities should meet that challenge positively."

William Shawcross and Theresa MayWilliam Shawcross and Theresa May after her speech on social reform, January 2017

The Conservative MP Bernard Jenkin, who chaired the former Public Administration Committee when it confirmed the Shawcross appointment, says he deserves personal credit for improvements at the commission: "He came with a track record of controversial writing, though not as a member of any political party.

"He did attract severe criticism and his appointment was controversial. The nature of some of his responsibilities is also controversial, such as policing charities with political connections or organisations linked to terrorism. But he won confidence for his impartial conduct."

The Labour MP Paul Flynn, at first the most critical member of the select committee, says he was pleasantly surprised by Shawcross, who communicated well with MPs: "He’s done a huge amount of work and transformed things to a great extent. I’d give him eight out of ten for struggling manfully under difficult circumstances."

The conclusions of sector leaders are more qualified. Sir Stuart Etheringon, chief executive of the National Council for Voluntary Organisations, says Shawcross set a strategy that rightly focused on compliance and appointed two good chief executives – Paula Sussex in 2014 and Helen Stephenson in 2017.

But he thinks Shawcross was wrong to employ a political adviser, Rupert Oldham-Reid, who left the commission in 2016, reportedly to be special adviser to Gavin Williamson, the defence secretary, when he was chief whip. Oldham-Reid is now employed by the right-leaning think tank Policy Exchange as director of research and strategy. 

"There was quite a lot of leaking," says Etherington. "Some charities felt they were being criticised in the press before they had a chance to defend themselves. The public might have thought that someone was getting to grips with regulation, but naming and shaming doesn’t increase public trust and confidence in charity."

Sir Stephen Bubb, leader of the sector chief executives body Acevo until 2016, was often at odds with Shawcross, but says he deserves credit for gaining the £9m funding in 2014: Bubb points out that Shawcross’s daughter Eleanor was an adviser at the time to the then Chancellor, George Osborne.

‘Quasi-politicisation’

But the downside was the "quasi-politicisation of the commission", says Bubb. "He pursued his own ideological view of the sector, which is an old-fashioned, establishment view of charities drawing income from the public and being run by volunteers. The commission’s emphasis has swung away from support and advice to being the police.

"He doesn’t like service delivery, he’s very grudging about campaigning and had a damaging effect on fundraising with his deeply unhelpful comments after the Olive Cook affair, which poured oil on the fire. And he surrounded himself with ideological mates on the board, which was unbalanced."

Carol Mack, chief executive of the Association of Charitable Foundations, says budget cuts forced the commission to make tough choices. "The nature of the prioritisation and the narrative surrounding it has in some instances been regrettable," she says.

"For example, by focusing attention so strongly on the tiny level of transgressions within the sector, I would argue that the commission has undermined its stated aim of increasing public trust and confidence in charities. By repeatedly not placing such incidents in the context of the excellent practice that happens in the sector, the commission could arguably have fuelled some of the front-page hyperbole we have seen recently, contributing to the distorted perception of the sector that many still sadly hold.

"While the approach may well have been intended to showcase the commission as a ‘tough and trusted’ regulator, the effect has been to over-weight the perceived threat and present it without adequate framing.

"This can also lead to potential overreach, such as in the high-profile case of the Joseph Rowntree Charitable Trust and Cage." (See Timeline)

Andrew Purkis, a former commission board member and charity chief executive, says Shawcross did well to stabilise the commission in the eyes of the right-wing press and Conservative politicians when the commission was at risk of being thrown on the post-2010 "bonfire of the quangos".

"But in the past you could look to the commission as an authoritative, balanced voice in public debate about charity – somewhat detached from the sector but with a matchless knowledge of it. And in this respect his record is poor.

"When there has been criticism, he has joined the critics and wagged the finger without pre-empting them or putting matters in an authoritative perspective. Adding as he does that charities are the golden thread in national life doesn’t cut it."

Purkis says Shawcross never explained what was meant when the commission’s 2013/14 annual report said it would be alert to "improper politicisation" as well as its other three priorities. "For three and a half years he tended to undermine the clear guidance on campaigning in the commission document CC9.

"He spread a pall of negativity over this essential part of charities’ role and never
affirmed it as part of good decision-making in a democratic society. There wasn’t a squeak out of him over the anti-advocacy clause the government started putting in charity contracts.

"The culmination was the restrictive guidance that was issued about the EU referendum and had to be withdrawn. This was a reflection of Shawcross’s negative, repressive leadership and a humiliation for the commission and its staff, who should have stopped it happening."

New legal powers

Tom Murdoch, a solicitor at the charity specialist lawyers Stone King, says Shawcross shrewdly used the fall in trust and confidence, which some felt he had fuelled, to obtain new legal powers that could be used to effect the changes the National Audit Office wanted.

"Many worried about the tone he struck on Islamic charities, and some felt he could have been a stronger advocate for the sector. I would have liked more scope for charities to campaign – they are some of the most expert voices.

"The abortive guidance on the EU referendum was probably the low point. But in some ways the commission is a better regulator than it was before him. It’s put a stronger emphasis on governance and is better protected from the more extreme critics in the press and parliament."


Allegations of bias against Muslim charities always refuted

TelegraphControversy: Shawcross made headlines with some of his Islam-related comments

Muslim charities have been a continuing source of controversy for Shawcross, who used to be a council member of the right-leaning think tank the Henry Jackson Society and described Islamism in an article in 2008 as "a deadly serious attempt by reactionary theocrats, Sunni and Shia, to enslave as much of the world as possible".

When he was appointed, civil war in Syria was intensifying and more territory was falling under the control of the so-called Islamic State. In an interview in 2014, he said "the problem of Islamist extremism and charities… is not the most widespread problem we face in terms of abuse of charities, but is potentially the most deadly. And it is, alas, growing."

The leader of one Muslim charity, who asked not be named, says: "A number of statements Shawcross made in the early days caused alarm and concern, and created a cloud of doubt around bona-fide charitable organisations. Some very loaded terms such as ‘deadly’ were used, with no evidence presented."

The fears of Muslim charities have been raised with the commission by sector leaders, and the former Conservative minister Baroness Warsi (below) said in a recent lecture that there had been an "increasingly disproportionate focus on Muslim charities" during the Shawcross years.

Baroness Warsi

Sir Stephen Bubb, former chief executive of Acevo, says Shawcross’s remarks were "deeply unhelpful to a young and growing part of the sector"; and Sir Stuart Etherington, chief executive of the NCVO, says Shawcross’s concerns about Islamism "clouded his judgement, and he doesn’t properly distinguish between extremism and the mainstream".

The commission and Shawcross have always refuted allegations of bias against Muslim charities. "Unfortunately, we do come across instances of the abuse of charities for terrorism and extremism-related purposes, and when this does happen it can cause significant damage to the charity or charities, and to public trust and confidence in the sector," says a spokeswoman.

The commission has done extensive outreach work to improve governance in Muslim charities, which has been commended by the charity leader quoted above. "The commission’s executive has been very positive," he says.

The National Risk Assessment of Money Laundering and Terrorist Financing, published by the Treasury, recently downgraded from "medium-high" to "low" the risk of the diversion of charitable funds to terrorism.

But it warned that 13,000 to 16,000 charities operating internationally face "significantly higher risks", particularly in Syria and Iraq, and the 30 per cent of these charities with incomes below £10,000 were especially vulnerable because of a lack of professional advice, honest mistakes and poor practice.

Where charities have been linked to terrorism, the report said, "a significant proportion" were legitimate charities falling victim to abuse by employees, volunteers or trustees, or being looted in countries where they operated.

Cases included Abdul Waheed Majeed, who travelled to Syria with a Children in Deen convoy, then joined IS and drove a truck bomb into the gates of Aleppo prison in 2014.

In 2016, two men were convicted of travelling to Syria in an aid convoy organised by the charity Al-Fatiha Global in order to hand £3,000 to a member of the al-Nusra Front, one of the extremist groups in Syria.

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