Is the charity commission too passive?

The Charity Commission is ‘too passive’ and failing to monitor voluntary sector organisations effectively, spending watchdog the National Audit Office (NAO) has today reported to LG News.

In a damning study, the NAO condemns the Commission’s performance as a regulator for not delivering value for money and for failure to identify and tackle abuse of charitable status.

‘The Charity Commission uses its information poorly to assess risk and often relies solely on trustees’ assurances,’ the authors stated.

Although the Commission has experienced a 40% real terms budget cut to £22.7m between 2007/08 and 2013/14, the number of main registered charities remained has remained static at around 160,000, the NAO found.

But the auditors said the Commission fails to exploit its enforcement powers and in 2012/13 suspended only two trustees and removed none.

‘The Charity Commission has responsibility for protecting the good name of the charity sector as a whole, as well as other specific duties,’ said Amyas Morse, head of the NAO.

‘It is too passive in pursuing this objective and in making the case for the resources to allow it to do so effectively.’

Margaret Hodge, chair of the influential Public Accounts Committee said a related NAO report which also came out today, into the abuse of Gift Aid status by The Cup Trust, suggested the Commission is not fit for purpose.

‘People in this country are hugely generous in giving to charities but the failure of the Charity Commission to detect and tackle abuse effectively risks undermining public trust in the whole sector,’ said Ms Hodge.

‘The Charity Commission will appear before the PAC later this month and will have some tough questions to answer.’

Charity Commission chief executive, Sam Younger, endorsed the NAO’s call for improvements.

‘The challenge before us is to identify which areas of activity should be reduced further to free up the extra resources to meet the NAO’s recommendations on registrations and investigations,’ Mr Younger said. ‘I would also welcome a wider debate about the implications of the report for the Commission’s priorities and approach,’ he added.