The burden of regulation on the charity sector is stifling innovation and wasting resources, and changes are needed if organisations are to design and deliver more imaginative, effective approaches to society’s problems.

This was the message of the Better Regulation Taskforce today as it launched the results from its study Better Regulation for Civil Society: Making life easier for those who help others.

The report found that while regulation is necessary to protect the public and to uphold standards, voluntary and community organisations face a disproportionate amount of red tape. Focusing on three priorities: volunteers; social innovation; and meeting need, eleven recommendations for change were made that the Taskforce believe will help level the playing field for the sector. These include:

• reforming voluntary and community sector (VCS)-specific regulation such as that from the Charity Commission and HRMC. For example, the taskforce recommends amalgamating the two separate reports charities have to provide both the commission and Guidestar;
• reforming general regulation, such as Schedule 1 of the Housing Act, which prohibits housing associations from granting non-contractual payments or benefits to staff, board members or their families. The report says that while this has good intentions, it has become a “bureaucratic exercise for both associations and the Housing Corporation and is ripe for reform”; and
• reforming quasi-regulation with regards funding opportunities. One example given is that the government works with bodies such as local authorities, Primary Care Trusts and the Learning and Skills Council to reduce the administrative burdens arising from voluntary sector contracts.

Sukhvinder Stubbs, chair of the taskforce’s sub-group, said: “Some regulation is needed to prevent bad people doing bad things, but this should be proportionate and should not impair the work being done. We hope our recommendations will help regulation support not stifle grass roots organisations, and change public service contracts for the better.

“This is an opportunity for quite radical change. However, for the recommendations to be implemented, the sector needs to get behind the report and lobby government, otherwise nothing will change,” she added.

The government is due to comment on the findings in 60 days, however, Paul Goggins the charities minister, has already expressed his support. Speaking at the launch, he said: “I am concerned about the regulatory burden on charities and want to create a step change in the role VCS organisations play within public service delivery. I will be looking at the recommendations to see if we can include them in the work we are doing in this area.”

The Better Regulation Executive has launched an online service for stakeholders to submit proposals to government, and the sector is being urged to give its views on any unnecessary regulatory burdens that could be simplified or eliminated. Visit www.betterregulation.gov.uk for details.