In recent years the Charity Commission’s caseload has steadily increased. It is now registering more charities than at any point in the recent past and its regulatory activity has stepped up. Last year it saw a 36 per cent increase in compliance cases, year-on-year, to a record 2,269, as well as a record number of applications for registration. There has also been a steady rise in serious incident reports and statutory inquiries.
It appears a positive move from a more proactive regulator. But does the Commission have capacity to take on this increased regulatory workload? And if not, what impact is this having on charities and the people who come into contact with them?
We’ve seen evidence that in some of its lower priority cases the Commission is taking a considerable time to act. The average length of an investigation rose in just two years from 209 days to 380 – over a year. And we are receiving reports that it is taking a long time to even begin to look into issues.
A number of individuals have approached us with concerns that delays have placed charity assets at risk, or that public could be further exploited as poor practice continues.
Sector bodies have voiced concerns about the knock on effect this could have on public trust and urge the government to consider adequate funding for the regulator.
Why is regulation slowing down?
The Commission has historically been told it is not doing enough regulation, and has responded by getting much tougher. But it faces a complex regulatory environment.
Despite beefed up powers in the Charities Act 2016, the Commission is a civil and not a prosecuting authority, meaning that if an investigation includes criminal activity then it needs to work with the police, who are not always well-placed to help.
Compared to many other regulated sectors the charity sector is messy and wide ranging. Diversity of cause and size mean the regulator must address a wide range of issues.
And the Commission’s budget almost halved in real terms over the past decade. It has now received an emergency grant of £5m a year from the Treasury until it can start charging charities for regulation, as well as £8m one-off funding to improve its technology, but these are papering over the cracks.
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