Charity regulator welcomes new funding and legislation to strengthen its powers
Funding as well as powers included in the draft legislation will make the Charity Commission a more efficient, effective and agile regulator.
The commission has welcomed today’s announcement of new funding to help it prioritise its monitoring and enforcement work, and the publication of the Draft Protection of Charities Bill. The regulator says the new funding and the powers included in the draft legislation will make it a more efficient, effective and agile regulator.
The commission says it will use the £8 million (see endnote 1) new funding announced by the Treasury to invest in technology and frontline operations, allowing it to streamline lower risk work and redeploy its resources to further improve and strengthen its work to identify abuse and mismanagement in charities. The commission is also being granted an additional £1 million in general funding for 2015-16, also to fund immediate resource needs in investigations, monitoring and enforcement.
Separately, the regulator has long argued that there are underlying weaknesses in its enforcement powers and is pleased that the Draft Bill announced today includes many of its proposals.
The Draft Bill makes significant changes to the ways individuals can be disqualified from acting as a charity trustee. The powers in the Draft Bill will also enable the commission to issue an official warning to charities about which it has concerns. The regulator says that this power, which many other regulators have, will allow it to take swift and proportionate action in situations where more forceful intervention would not be appropriate.
Not all of the measures the commission had proposed are included in the draft legislation. In particular, the regulator is concerned that the Draft Bill does not include its proposal that people who are disqualified from trusteeship should also be banned from taking up other key roles in charities, such as treasurer or finance director. It had also pressed for powers to prevent mismanagement or misconduct or other breaches before they occur, by directing trustees not to take specific actions.
The commission says it remains hopeful that these measures may be included in the draft legislation as it passes through pre-legislative scrutiny.
William Shawcross, Chairman of the Charity Commission, said:
I am delighted about today’s announcements, which are a vote of confidence in the commission’s role as regulator and our strategy for strengthening our work to prevent and tackle serious abuse. The additional funding and the new powers will help us promote public trust in charities and ensure that charities continue to play their vital role in our society.
The commission says it hopes for legislation at the earliest possible opportunity in the next Parliament and will play a full part in the process of pre-legislative scrutiny over coming weeks.
Notes to editors
- The Charity Commission is the independent regulator of charities in England and Wales.
- Our mission is to be the independent registrar and regulator of charities in England and Wales, acting in the public’s interest, to ensure that:
- charities know what they have to do
- the public know what charities do
- charities are held to account
- The commission gave proposals for legislative change to Lord Hodgson’s Review of the Charities Act 2006. It also made proposals to the Prime Minister’s Extremism Task Force which presented the case for changes to enable the commission to act quickly and proportionately to deal with abuse and mismanagement of charities.
- The £8 million invest to save funding will be targeted to:
- establish systems for strategic risk profiling, proactive monitoring and investigations that will consolidate and analyse available information to assess the level of regulatory risk posed and to decide upon the appropriate approach to mitigate the risk
- streamline regulatory processes and digitise services to release capacity for proactive monitoring and enforcement. Low risk transactions will be moved completely online and resources will be focused on proactive regulation
- The new end to end digital services will create efficiencies for charities and for the commission, allowing self-service for simple transactions, more efficient submission of accounts and required information, provide new channels for helping charities understand their legal responsibilities and give greater accountability to the public by making charity financial information available for the first time as open data.
- The commission expects the £8 million investment to generate efficiencies and release capacity which would predominantly be redeployed to high risk work.
- The Treasury has announced that it will grant the commission up to £8 million in investment over three years, available from 2014-15.
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Published: 22 October 2014
From: The Charity Commission