The ACEVO Taskforce on Regulation has released its high level report - Public Impact Centred Regulation for Charities.

As the sector increases in size and complexity, and becomes Government’s focus for encouraging Big Society, more enabling regulation will be vital for charities to meet this growing role effectively.

This report urges the forthcoming BIS/OCS review to create a thriving and more accountable sector through articulating a positive vision of 21st century charity regulation.

The report challenges sector leaders, regulators and other stakeholders to drive forward a more transparent, professional and enterprising sector focussed on public impact.

Formal regulation of the sector has previously focused on form rather than substance. This constrains innovation and conditions organisations to avoid risk rather than actively managing it.

The report takes a wider approach to regulation and its impact on the sector. This, says ACEVO, is vital as much regulation is, in practice, organisational culture effected by internalised regulatory tone.

Experience from other sectors suggests that regulation and the sector work best when there is a broadly shared vision of what regulation is for and a shared responsibility for it.

Regulation and accountability need to be viewed as strategic issues for the sector as a whole and should be used as tools for driving up quality.

The report brings together a wide base of evidence from the taskforce, other sector commentators and literature on more specific regulatory issues into an overarching framework for charity regulation.

It advocates that charity regulation can be achieved most effectively through sturdy policing of the sector’s boundaries alongside a shift within the sector from detailed regulatory prescription to pluralism.

This approach, says ACEVO, will help maximise charitable public impact as well as maintaining external trust in the sector.

As part of this regulatory reframing, the sector needs to become more transparent, professional and enterprising as well as accounting for its impact more effectively.

This will foster a more co-regulatory approach to regulation (that is, through professional standards) and free up resources for frontline organisations and regulators – particularly critical given the financial pressures that both will face.

In unpacking this agenda, there are important roles for regulators, government, funders and other stakeholders to drive it forward.

There are no recommendations that assume new legislation, as the taskforce believes that effective change can be achieved through changing culture and practice within the existing legislative framework.

Stephen Bubb, CEO of ACEVO, stated: "For too long, many of my members have been forced to operate within an outdated regulatory framework. It has placed a straitjacket on the sector and restricted our ability to innovate.

"This report is a strong step towards a more proportionate regulatory regime, with the sector and regulators working together. I know Nick Hurd will find it a valuable tool to help shape the thinking of the upcoming review."

Rupert Evenett, chair of the Taskforce, said: “Regulators have made significant progress over recent years, but there is now a need to start a new conversation. This report reframes the focus of regulation to enable a more flourishing, more innovative, and publicly accountable sector. Particularly given the current economic climate and the scale of public need met by the sector, this is an important time to be addressing these issues”

Key recommendations include:

A strategic use of information filing more suited for the internet age. This will increase accountability, inform funding and lift the strategic capacity of the sector. Better core information will also eliminate reporting duplication.

Greater use of professional co-regulation to increase the quality of regulatory in an age of austerity

A less rigid approach to governance, giving charities the flexibilities they need to enhance their public benefit and meet the big society challenges

Identify and ending wasteful duplication in regulation and reporting

A call to the Charity Commission and the sector to shift from a "risk averse" to a "risk management" culture. The tone set by commission guidance, intended or not, is very risk averse. The Commission should look at reissuing more positive, enabling guidance.

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