William Shawcross confirmed at the Charity Commission Annual Public Meeting that they will be consulting on charging charities for the costs of the Commission as the necessary way forward. Here are the pros and cons in a nutshell:
- Successive budget cuts have reduced the ability of the Commission to do its job properly and such is the financial pressure on the public purse that this position is unlikely to change.
- The Commission is too dependent on the Government of the day partly because of the power of Ministers over appointments and partly because they have the Commission by the short and curlies each time the public expenditure round approaches.
- It is in charities’ interest to have a reliably funded Regulator independent of Government.
- There are good models of regulators paid for by the sector but demonstrably independent and found to be so by the courts (eg the university ombudsman called the Office of the Independent Adjudicator of Higher Education).
- There are fiendish practical questions about a sliding scale of charges: what should be the scales, what to do about endowed charities, do you take the size of assets, endowments and reserves into account, what sanctions are to be applied and by whom.
- In principle the regulation of the charity sector is principally in the public interest and has always been seen as a proper use of public expenditure voted by Parliament
- It is not in charities’ interest to pay for a Commission that, at present, is not independent of Government, has virtually no working experience of the sector and in key respects does not enjoy its confidence.
- It is unfair to Trustees and donors of organisations that make few demands on the Commission to pay for the disproportionate costs of the Commission’s time devoted to a few bad apples. Donors may object to paying for the Commission’s regulation of other charities of which they may strongly disapprove.
- If larger charities pay for the Commission, there is a danger of “capture” so that, over time, the Commission absorbs their mindset and priorities.
5 thoughts on “Charge charities for the Charity Commission? Key issues on one page.”
Thanks Andrew for an interesting blog.
Perhaps the Government is looking at press regulation to see whether there is a comparison to be drawn, in relation to charity regulation. What would happen if a philanthropist (or someone else) decided to set up an equivalent of Imprest for charities? How about creating a market place for charity regulation, with different charity regulators vying for charity support? I can see our friends at the Institute of Economic Affairs supporting that.
Did I hear something to suggest that charities would no longer be answerable to the PACAC – or did I just imagine that.
It seems that the ructions for the sector of 2016 are not going away in 2017.
PACAC monitors Cabinet Office. Now OCS is part of DCMS the culture committee oversees charities.
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Thanks for a helpful summary. I think the idea of charities paying is ethically wrong and fraught with difficulties.
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Not enough has been published and i’ve not seen a public consultation on the subject! Currently I don’t think the commission is organised or effective enough to warrant any further budgets.