Now is not the right time to consult on charging for the Charities Commission, says Andrew Purkis.

The recent research by Populus into public trust and confidence in the Charity Commission raises interesting questions about the Commission’s intention to consult on charging larger charities for aspects of regulation.

In her blog to accompany the research, the Commission’s Sarah Atkinson confirms that charging is indeed the plan, alongside continuing discussions with the Treasury about the requirement for public funding. 

I see strong arguments on both sides of this debate, which I have previously summarised.

But for many decades it has been accepted by parliament that it is in the public interest (not just charities’) to have an independent regulator of the sector. Beware of putting too much weight on comparisons with other sectors where this historical assumption has not been there.

The charity sector, unlike the others, is also among other things a missionary and campaigning sector. Suggest a fresh tax on the advancement of religion (about one sixth of the whole sector) and expect a new generation of Thomas Cranmers, John Bunyans and William Wilberforces - and their equivalents in other faiths - to arise and campaign against it. Suggest a fresh tax on environmental protection and conservation, on the arts, on cancer care... Please believe me, there will be the mother and father of a row.

I have pondered whether the Charity Commission might actually welcome such a row in order to convince the Treasury that they must increase public funding of the Commission, but I am not sure that chair William Shawcross and his board are that cynical. I think they, like all of us, want a careful, sensible debate.

That is what we shall not get if a consultation is launched any time soon.

In a hung parliament, how many ministers or politicians will welcome such a brouhaha or be impervious to impassioned campaigns by angry constituents? It takes a strong government, at least, to face down many angry charities.

If the government could find a billion for Northern Ireland, will go the cry, it is wrong, even absurd, for the Treasury to fuss about a relative bagatelle such as an extra few million for the Charity Commission.

Moreover, the charging of larger charities to pay for the Fundraising Regulator has not been a smooth ride, despite the far stronger case for charging in the wake of the Olive Cooke and allied fundraising scandals. Many of them have gone along with it reluctantly for strategic reasons to do with the risk of reputational damage. Not a great time to try another charge on them for regulation by the Charity Commission?

Not right for the Commission

The timing in relation to the Commission itself is also all wrong. According to Populus: “Most stakeholders (many of whom also rate the Commission positively overall and commend its work) also express concerns that the organisation has at times appeared politically driven and subjective in its treatment of particular high profile incidents”.

Hmm. If you were a trustee of a large charity, would you want to pay for that? Would it not be better to wait for a new chair and chief executive to create a more reassuring climate?

If charities look at the outgoing regime, many will have doubts, not least about its destabilising approaches to regulating political activity and the failure to provide an authoritative and independent voice in public debate about charities (as distinct from finger-wagging in response to newspaper headlines). If they look at the forthcoming regime, they also have doubts because they don’t yet know what sort of regime it will be. So why now? 

The Commission’s own recent report into trust and confidence points the same way. Populus’s charity respondents doubt whether the Commission has yet restored a good balance between compliance and support. This suggests that the time is not ripe for consultation.

Stakeholders (a different group) were asked by Populus about charging charities for part of the costs of the Commission’s work. These are relatively detached, sophisticated observers, unlikely to be swept up in emotional reactions to a raid on charitable resources for regulation. Yet only about a quarter were in favour, mainly on the basis that the Commission would have more resources to do its job better. The large majority were split between opposition and doubt.

Independence from government

Stakeholders’ responses suggests to me that both those pro and anti-charging do not give enough weight to the pressure the government can exert under the current system.

This is partly through the appointment system, which is open to party political influence by ministers. (Remember that twice the relevant select committee approved the appointment of William Shawcross as chair only by splitting on party lines, Conservatives in favour, the rest against. Not a great basis for confidence in neutral regulation.)

But it is also because the Commission is dependent on ministers for its budget, and knows that if it steps out of line with what ministers want, it is at risk of further cuts. In the run up to each public expenditure round – i.e. most of the time – ministers have the Commission by the short and curlies.

Some parts of the charity sector and some of the stakeholders in the Populus survey see the matter of independence primarily in terms of the threat that, over time, the Commission might be influenced by the perspectives of the larger charities that would be paying the Commission’s bills.

That is a real issue, but it seems wrong to ignore the major potential threat to independence posed by the tight hold of Government over the financial lifeblood of the Commission under the present system. We need much more balanced and careful thinking about that within the sector and beyond. Yet right now, we shall not get it.

Full charging is coming

 The current chair has made clear that in his view funding by the sector is the future, and this undermines trust that partial funding by the sector is what is really intended in the long term.  The slippery slope to full charging of the sector is in full view. The argument that sector funding is “necessary” because of continuing Treasury public expenditure constraints invites a vigorous campaigning response to pile political pressure on ministers to come up with relatively tiny sums of taxpayers’ money at a time when there is a hung parliament. I sense that many influential people in the sector who might in other circumstances be willing to see both sides of the argument (not least about independence from government) will line up behind the “NO!” campaign.

Better to leave it a while, under a new Charity Commission chief executive and a new chair, settle things down and show that the Shawcross era is well and truly over. Then we are more likely to get a balanced debate.

As Napoleon put it to his mistress: “Not tonight, Josephine!”