Charity Commission found to be improving its effectiveness

22 Jan 15

The Charity Commission is improving its regulatory regime following criticism of its effectiveness, the National Audit Office has found.

The NAO warned in December 2013 that not enough was being done to identify and tackle abuses of charitable status and the Public Accounts Committee subsequently concluded that the regulator was not fit for purpose.

But a follow-up report published today said a ‘credible change programme’ was now in place.

The NAO said the commission had developed a new business model that focused more of its resources on high-risk cases and aims to automate low-risk transactions. Under its new chief executive Paula Sussex, it had also put in place a plan to become more rigorous and proactive, boosting its investigations through £8m in one-off funding from the Treasury.

The commission was already making more effective use of its powers, the Follow-up on the Charity Commission report stated. In 2013/14 it opened 64 statutory inquiries, compared to 15 the year before, and it used its information gathering powers 652 times, compared to 200 times in 2012/13.

In addition, its enforcement powers were used 56 times in 2013/14, compared to just three times in the previous year. Use of these powers had protected £31.3m of charitable assets, including the recovery through litigation of £1m for charities.

Better use was also being made of data, for example by matching data against the National Fraud Database, as well as cross-checking registered charities with charities claiming gift aid. Follow-up checks of what trustees tell it have also improved, although auditors said the commission still does not follow up on all the issues it might be expect it to. Cases were found where the watchdog had not checked before closing the cases whether trustees had complied with its instructions.

Auditor general Amyas Morse said the commission was working to address the recent recommendations of the NAO and PAC reports.

‘It has clearly stated its intent to become a robust regulator. It now needs to deliver on its intent, and there is still much to do,’ he added.

‘This includes building on its positive first steps to regulate more actively, as well as developing a better understanding of its future costs and the resources it needs from the Treasury.

‘Furthermore, the commission needs to show stakeholders how its new approach is enabling it to regulate the sector more effectively, and to make clear what the sector and the public can expect from it.’

Commission chair William Shawcross said the NAO’s findings amounted to a ‘vote of confidence’ in reform plans.

‘This report is testament to the unprecedented progress we have made over the past 18 months,’ he said.

‘I am delighted that the NAO has recognised our ability and determination to transform the commission into the robust, effective regulator the public and charities expect.

‘The NAO’s findings will spur us on to maintain the momentum of change. We have much hard work ahead of us and we are not complacent about the effort and the skills that are still needed to achieve our goals.’

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