We must debate charging for regulation, says Charity Commission chief

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In a blog, Helen Stephenson says that pressure on the regulator’s funding means that, though the debate will be heated, it must happen

The Charity Commission is expected to propose asking the largest 2,000 charities in England and Wales to contribute a total of about £7m a year to boost the regulator’s resources and help it increase the support it provides to trustees, its chief executive has indicated.

In a blog post published by the commission today, Helen Stephenson says that although she expects the debate with the sector over charging charities to be a heated one, it must be had.

The commission’s suggestion that it would charge charities for its services have already been opposed by some charity umbrella bodies, with the charity leaders body Acevo, the Charity Finance Group, the Small Charities Coalition and the local infrastructure body Navca setting out their opposition to what they called a “charity tax” in a letter to the Treasury last month.

Stephenson says in her blog today that in the three months since she started as chief executive of the regulator the pressure on its finances are one of two main areas she wants to address in the years ahead – the other being improving its services for trustees.

She says the commission’s budget – which is frozen at £20.3m a year until 2020 – has halved in real terms since 2007, while applications for charity registrations have increased by 40 per cent over the past four years.

If the regulator is to continue to prioritise the issues and cases presenting the highest risks to charities and to public trust, then its ability to deal with lower-risk work will decline and the service it provides to charities could become slower, says Stephenson.

She says she is making the case to government for transitional funding to help it bridge the gap between the regulator’s funding and the “significant increase in demand on our services”.

But she says that the context of continued pressure on public finances and the regulator’s desire to provide more support for trustees has led her to conclude that the commission “must start a sensible, open debate about larger charities making a modest contribution to the cost of parts of their regulation”.

Stephenson says work on charging proposals is at an early stage, “but our current thinking is that in order to improve our existing services and develop new services for trustees, we would need to raise in the region of £7m annually from the largest 2,000 charities on our register”, which is likely to be on a sliding scale according to each charity’s annual income.

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The regulator has previously indicated that charities with annual incomes of £100,000 or more might be asked to pay between £75 and £1,750 a year, depending on the outcome of the consultation.

Stephenson says she is realistic about the timescales involved in developing a charging system, which would require legislation to be pushed through an already crowded parliamentary calendar dominated by Brexit.

She says the regulator needs more resources so it can develop and improve its services to trustees.

“It must continue to become easier to do business with us,” she writes. “We must be more available and accessible with advice and guidance for individual trustees.

“Charity trustees are, after all, overwhelmingly volunteers who are well-intentioned and passionate about the causes they espouse for the public benefit.

“The public needs a regulator that can call out bad practice, but to secure the continued success of the charity sector we also need a regulator that is able to help trustees get it right. We need to recognise trusteeship as a national treasure that we must look after, grow, enable into the future.”

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