Our review of the Charity Commission’s governance

I am writing today to explain NCVO’s plan to conduct a review of the Charity Commission’s governance structure and its board appointments process.

It is eight years since the Commission was restructured under the Charities Act 2006, and while that legislation did much to improve charity law, its reforms to the Commission’s governance have created some new problems.

Politics

The revised structure replaced a small board of Commissioners comprised of lawyers and civil servants with a more diverse board, with the intention that the Commission would become more responsive. In doing so, the law opened up the pool of potential Commissioners for the government to select from. Subsequent boards, and particularly chairs, have been subject to the accusation that as appointees of the government of the day they are in some way politically biased. One does not have to accept that these accusations have any merit in order to see that they can be damaging.

If the charity regulator is perceived to be political, it has the effect of casting a shadow over charities more generally. It is damaging to charities’ long-term interests for there to be any doubt about our distance from party politics. We cannot afford for our regulator to be anything other than beyond all suspicion.

The risk of perception of bias is even more important in light of the additional powers for the Commission contained in the new Protection of Charities Bill.

Our aim is to find ways to make sure the regulator can put questions about its political neutrality to rest for good. We want to ensure that the Commission can never again be accused of political bias in its work.

Comparisons

Our review will consider how the Commission’s governance is structured, including its relationship with government, the appointment process for board members, and the respective remits of the board and the executive.

We are particularly keen to compare how other regulators are structured and administered and see what there is to learn from existing alternative models.

Funding, governance, operations – all go hand-in-hand

Questions of governance go hand-in-hand with the issue of the Commission’s funding. Any funding mechanism for the Commission, including the current one, has the potential to raise questions about the Commission’s independence from government or from the charities it regulates. We are hosting a roundtable meeting to discuss all the options for the Commission’s financial future at the end of this month. This will help inform our thinking.

As well as an independent regulator, we need one that has the funds necessary to be effective. Again, it could damage our sector’s reputation if charities are perceived to be ineffectively regulated.

It is clear to me that reforms to the Commission’s financing or governance cannot be made in isolation. Changes to either aspect would affect the other and would need to come as part of a package of measures to strengthen the Commission. I hope we can come up with proposals that would together enhance the Commission’s independence, accountability, and financial security.

Our review will also consider whether any other aspects of the Commission’s work would benefit from further scrutiny – for example its guidance for charities on various issues, or its customer operations – and make further recommendations.

This is not a criticism of the Commission itself

I wish to emphasise that this is in no way a criticism of the Commission’s current board or staff. They are operating under a framework created for them by others. The Commission’s structure is defined by statute and its operations are constrained in many ways by central government, which sets its budget. The board and staff of the Commission are working hard at a time when the attention on them is growing and their budget is shrinking. The strategy the current board are implementing – an assertive approach to malpractice – is the right one.

Campaigning

Separately, we intend also to review the broader environment for campaigning, following the general election. We will consider the consequences of the Lobbying Act, as well as looking at the regulation of campaigning more broadly, drawing on international comparisons. We intend to launch this work following the general election in order to draw fully on the experiences of members during the regulated period of the Lobbying Act.

I would like to hear from you

The review of the Commission’s governance will be conducted by NCVO guided by an advisory panel with relevant expertise and I expect it to conclude in summer 2015.

We will be keen to hear evidence from NCVO members and will be in touch with you soon. If you have questions or thoughts in the meantime, I would be most glad to hear them. You can comment beneath this blog post or email me.