The Charity Commission has accepted most of the recommendations made by a committee of MPs following the collapse of Kids Company, but has rejected a recommendation that it write to every complainant.

The Public Administration and Constitutional Affairs Committee recently published the Charity Commission’s response to its inquiry report into the collapse of Kids Company.
The Commission broadly accepted the recommendations of the committee and said it is working towards improving its guidance for trustees.
The recommendations it accepted were:

• Do more to make the trustees aware of their responsibilities when it comes to reserves 
• Revise its guidance for auditors
• Emphsise the importance of trustees having relevant experience
• Do more to make the public aware of the Commission and its role 

MPs had criticised the Charity Commission for not keeping a record of its involvement in a dispute between a dissatisfied donor and the charity. During the oral evidence session MPs heard different accounts about how the complaint was handled from the charity and the regulator and recommended that the Commission should communicate in writing with everyone who registers a complaint, in order to avoid confusion. 

But the Commission said it does not accept that recommendation.

The Commission said it received more than 100,000 emails, calls and letters last year and “does not currently have the resources or technology to keep detailed written copies”. 

The Commission added that while it will respond to complainants when the complaint “raises a regulatory issue” it “cannot however enter into prolonged correspondence with all complainants”.  

It also said that when it “simply direct a donor or charity to online guidance, we cannot make or keep written records of this, because of the limitations of our technology and the significant resource such recording would require”.

Commission to consult on updated financial guidance

MPs had also urged the Commission to do more to make trustees and auditors aware of their responsibilities. The regulator pointed to updated interim guidance on reserves, resilience and managing a charity’s finance that were published in January. 

In 2015 it published an updated version of its core guidance for trustees “to use a clearer, simpler style”.

It said it will “reviewing all our financial guidance to reflect our new approach” and that it will consult later this year. 

The Commission is also contributing to a piece of research being done by Cass Business School Centre for Charity Effectiveness and the Cranfield Trust on trustee awareness and capability. 

The Commission also said it could not revert to referring to all board members as ‘commissioners’, as the committee had suggested, because of the way the regulator is constituted under the Charities Act. But it said it would consider the issue with the Cabinet Office. 

PACAC had also criticised the charity itself, auditors and government for the collapse of Kids Company. The government has already responded, and said that there will be more scrutiny before grants are made to charities.

The Charity Commission opened a statutory inquiry into Kids Company shortly before it collapsed. It told MPs that this inquiry is “ongoing” and it will publish a report “once the inquiry has concluded, which will not be before the autumn”.