Chancellor Philip Hammond has been urged to appropriately fund the Charity Commission out of general taxation, rather than pursue a levy system.

Directory of Social Change chief executive Debra Allcock Tyler wrote to the Chancellor this week, setting out arguments against a system in which charities pay a fee to fund their regulation.

Allcock Tyler called for the regulator to be adequately funded, saying budget cuts in recent years have led to the departure of senior and experienced staff and curtailment of help and advice for trustees.

But the letter argued that fees are wrong in principle, as they “siphon off” public donations made towards meeting charitable aims.

Fees would be another unwelcome overhead for charities, Allcock Tyler said, and represent poor value for money due to the administration costs that would accompany a charging system.

A levy could also lead to “bad or distorted” regulation, and leave the commission vulnerable to criticism for being open to influence from larger charities that account for a larger proportion of its budget.

“I strongly urge you to find an adequate settlement for the Charity Commission which does not involve charging charities,” Allcock Tyler wrote. “The commission’s work is critical to the effective functioning of hundreds of thousands of charities across England and Wales. Adequately funding it via general taxation is in the country’s best interest.”

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