Why we need to be an enabling regulator – and what that means for our funding

It’s been 3 months since I started as CEO of the Commission. During that time, I’ve met and listened to staff in the Commission’s four offices, visited trustees, staff and beneficiaries of charities ranging from small community groups to some of the largest organisations on our register – and I’ve had conversations with colleagues from across government.

The one, overwhelming impression these early encounters have made on me is that charities are more crucial to our way of life as a country than - despite my background in the sector – I had fully appreciated.

Charities are in every community, whether they be geographical communities, or communities of faith, interest, identity or culture. They operate at the micro level – providing a village hall, for example – and they perform crucial national functions. And indeed some of the charities we regulate have an impact at global level. It is simply not possible to imagine our national life without them.

Compared to the size of that sector, and its value to our country, the Commission as regulator is a tiny player. But our role is vital. We have important statutory objectives as set out by Parliament that protect and promote the integrity of charity, and beyond that, we have a unique convening power that allows us to positively influence the way in which charities contribute to our society or respond to events.

Our role in bringing together charities and government following the Grenfell Tower disaster, for example, is having a tangible impact on the lives of those affected by that tragedy. We also play an important role in helping government make a success of its priorities – in housing, education, security.

I have been hugely impressed by the professionalism and dedication of the Commission’s staff at all levels. The 300-odd officials that make up the Commission are doing a world-class job in regulating charities expertly and effectively according to risk and in furtherance of public trust.

So my early impressions and experiences of both the Commission and the charities we regulate have been overwhelmingly positive, and encouraging. And I see my principal job in the years ahead as being to continue to steer the Commission along the steady path that my predecessor, with the board, set for the organisation.

There are two areas, however, that I will be seeking to address, together with the board, in the years ahead.

First, I believe the Commission must develop and improve its services to trustees. It must continue to become easier to do business with us, we must be more available and accessible with advice and guidance for individual trustees. Charity trustees are, after all, overwhelmingly volunteers who are well-intentioned and passionate about the causes they espouse for the public benefit.

The public needs a regulator that can call out bad practice, but to secure the continued success of the charity sector we also need a regulator that is able to help trustees get it right. We need to recognise trusteeship as a national treasure that we must look after, grow, enable into the future.

Second, I am struck by the significant pressures on the Commission’s finances. Our resources, set against the continued increase in demand on our services, are becoming more tightly stretched every day. For example, applications to register as a charity have increased by 40% over the past 4 years, while our resources in real terms have halved since 2007.

If we are to continue to prioritise the issues and cases presenting the highest risks to charities and to public trust – which I believe is right – then by logical conclusion our ability to deal with lower risk work will decline. The service we provide to charities could become slower. Charities may have to wait longer to be registered, to have our consent to modernise or adapt to the changing needs of their beneficiaries.

I am making the case to government for transition funding to help us bridge the gap between our funding and the significant increase in demand on our services. But, in the context of continued pressures on public finances, these two insights – that the Commission must do more to support trustees, and that our current funding settlement does not allow that – lead me to one longer-term conclusion. Namely that we must start a sensible, open debate about larger charities making a modest contribution to the cost of parts of their regulation.

This is not a new idea, incidentally. There has been provision in primary legislation since 1993. It is also accepted practice across other parts of society that regulated communities make a contribution to their regulators.

So I am working with my teams, and the board, to draw up proposals for such a system, which I hope we will consult on next year. This work is at an early stage, but our current thinking is that in order to improve our existing services and develop new services for trustees, we would need to raise in the region of £7m annually from the largest 2,000 charities on our register.

I am realistic about the timescales involved in developing a system for charging charities. Doing so will require legislation, and Brexit means that Parliamentary time is limited.

And whilst I expect the debate with the sector on this to be heated, it is one I believe we need to have.

Charities in this country fulfil a significant role in society, and I want to ensure that the Charity Commission has the resources it needs to promote public trust and confidence in this vital sector.

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