The Charity Commission: Power and responsibility

It is not an exaggeration to say that 2013 was an ‘annus horribilis’ for the Charity Commission. Various high profile cases of abuse in charities led to strong negative criticism about the regulator’s ability to carry out its compliance and enforcement work, and ultimately its effectiveness.

In response to this intense scrutiny, particularly by the Public Accounts Committee and the National Audit Office, Cabinet Office issued a consultation aimed at strengthening the Charity Commission’s powers to tackle abuse in charity and non-compliance with charity law.

The aim is to ensure more effective regulations of charities, and ultimately preserve public trust and confidence in charities, the regulator and the regulation of the charity sector. This is something NCVO fully supports: the presence of a competent and adequately resourced regulator, able to act effectively and fairly with the appropriate powers, is essential for ensuring compliance with charity law and regulation. Furthermore, its functions could not be delivered by another non-specialist regulator, so it is important to enable it to carry out its role effectively and efficiently.

Overall, most of the proposals are sensible and seek to address existing loopholes or update the law to reflect modern circumstances. For example, the types of criminal offences disqualifying individuals from charity trusteeship need to be expanded beyond only those involving deception and dishonesty. And it is important for the protection of the charity brand as a whole, as opposed to just the specific charity involved, that a person who has been disqualified should not then be able to move on and act as a trustee (or other positions of responsibility such as CEO or finance director) in another charity.

Other new powers that are being proposed also seem reasonable, and align the Commission’s powers with those of other regulators (eg. the power to direct a bank to notify the Commission of certain movements on a bank account) or simply enable it to act more swiftly (preventing a trustee from resigning so he/she can avoid disqualification).

But it is also important to strike the right balance between ensuring compliance and preventing abuse of charities, and respecting the independence of charity trustees in their decision making.

Some of the proposals go too far, with the risk of ignoring the fundamental principle of charity regulation: that the Commission must not act in the administration of a charity. So we have raised concerns about the number of cases where the proposal is to decouple powers from the opening of a statutory inquiry. The opening of an inquiry should still be the first step before other powers are exercised. Establishing an inquiry effectively changes the relationship between the charity in question and the Commission, and is an important safeguard against the use of excessively extensive powers.

We are also not convinced that all the case studies cited in the consultation provide a convincing explanation for the need for a particular new power: some of the scenarios described as examples where the proposed new powers would be necessary are rather extreme, but the powers as drafted could be used a lot more broadly, raising concerns about possible abuse.

Notwithstanding these concerns, this was a timely consultation, and in particular it is an appropriate time to equip the Commission with better powers where needed: following the changes made by the Charities Act 2006 the Charity Commission is a more accountable body, so any additional powers will have to comply with a range of high standards (such as principles of best regulatory practice, judicial review parameters, human rights provisions).

We now have a short time frame to see what the outcome of the consultation will be, but our message to the Commission is this: with greater power comes greater responsibility.

Read our full response (PDF, 160KB)

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Elizabeth Chamberlain Elizabeth is head of policy and public services at NCVO. She has been part of the policy team since 2008, as the expert on charity law and regulation. Her policy interests also include charity campaigning, the sector’s independence, transparency, and accountability.

2 Responses to The Charity Commission: Power and responsibility

  1. Tom Sant says:

    After 50 years in the voluntary sector I feel the Charity Commission needs more staff and much more stronger powers as some charity groups are just doing whatever they want with no respect for the reason that they exist.

  2. Elizabeth Chamberlain Elizabeth Chamberlain says:

    Dear Tom,
    You may have already seen that Civil Society Media reports that during a debate on the effectiveness of the Charity Commission in the House of Lords grand committee last week, Lord Wallace of Saltaire, told peers that “if the new Charity Commission board can make a strong and positive case for additional resources, the government will look at that very carefully”.
    The full article is here: http://bit.ly/1cujAOD