Should charities pay for the Commission’s advice?

The Chief Executive of the Charity Commission, Helen Stephenson, is reported in Civil Society News of 10 January as suggesting that the sector itself should pay for advice to the sector and for the Commission’s enabling work, including the low level permissions and schemes which the regulator is also responsible for.

She believes that the Government should fund the regulator’s compliance and investigative work, which prevents wrongdoing. But advice and enabling are in her view another matter.

I struggle to see the logic of this. The purpose of advice and many aspects of enabling work by the Commission is precisely to make reputational damage and wrongdoing less likely, and encourage good practice that encourages public trust and confidence – the purpose entrusted to the Commission by Parliament. Prevention is much better than expensive corrective action when things go wrong. How unwise, therefore, to identify expensive corrective action as the right route for public funding rather than prevention and positive action to preempt problems.

It seems no more sensible than suggesting that no taxpayers’ money should be spent on public health programmes and preventive health, so that it is all spent instead on treating illnesses once they occur. Or that we should spend no taxpayers’ money on supporting families, preferring to spend far more on picking up the pieces when families implode.

Previously, Helen Stephenson was understood to be talking about a levy on large charities. That has its own problems. Why would large charities want to pay for all sorts of advice and enabling for charities and causes different from their own and  for which their money was not given? Why should a cancer charity and its donors pay for a local scheme to regulate a piece of land or a permission relating to a village hall? (Let alone whether they would want to pay for the sort of finger wagging “advice” they were getting from William Shawcross and other Board members?}

But perhaps the reference to “low level permissions” indicates an intention to propose charges for particular services, in addition to or instead of a levy on large charities? In that case, a lot depends on the justice and likely consequences of imposing such charges. For example, how many prospective or existing charities would be put off doing what would be best for them and for the reputation of charities in general? or discouraged from bothering with permissions of which they do not really understand the benefit anyway? Stop Press: I have just been told by the author of the Civil Society News report that it is a levy, and not individual charges, that the Commission has in mind at present.

In addition, such a levy will be seen (not least in the light of William Shawcross’s publicly expressed views) as the thin edge of a wedge that could in principle see all advice, guidance and assistance to prospective and existing charities as to be paid for. And then, in the end, how about some investigative functions, too? And what is the long term effect of incremental charging for what, historically, Parliament has seen as a valid (and really rather small) claim on public funds because it has wanted to encourage and promote charitable causes in the public interest?

The Commission’s frustration with its inadequate budget is thoroughly understandable. But a long term perspective is best. Artificial and illogical distinctions between compliance and preventive aspects of good regulation will not stand up to analysis. There is good reason to fear the thin end of a wedge. And if the Commission is to depend on the Government of the day for most of its funding anyway, the best arguments for a comprehensively different sort of funding that will produce a more independent Commission are undermined.

The Commission’s efforts to soften up the sector for a debate on a levy or charging are not going at all well. The new Chair, when he or she is chosen and assumes office, would be well advised to hit the Pause button and have a really careful think.