Charging charities won’t solve regulator’s “budget headache”, says DSC

A decision to force charities to pay for the Charity Commission’s services to help plug its current budget gap is “short-sighted” and “counter-productive”, the Directory of Social Change has argued.

The Charity Commission’s budget has been slashed from £40m down to £21m in recent years, triggering a debate around how the regulator should seek to plug the gap.

A number of possibilities have been toyed with, including the idea of introducing a levy on larger charities, which would aim to raise about £7m per year, as well as other payment models, such as charging all charities some form of levy on a sliding scale, charging larger charities only and charging particular services or on the basis of processes.

However, in a letter to Charity Commission chair, Baroness Tina Stowell, DSC trustee, Andrew Purkis has called for a “new approach” to the debate, arguing the introduction of a levy would be a “short-sighted, counter-productive policy”.

DSC has consistently opposed the idea of charging charities for regulation or for other services provided by the Commission, and is currently leading the campaign, Campaign Against Charging Charities.

In Purkis’ letter to the regulator, the former Charity Commissioner explained that charging models are “not the right approach” to solving the regulator’s budgetary issues, and there should instead be an examination of how improved parliamentary oversight could help make the case for adequate exchequer funding.

On publication of the letter, DSC director of policy and research, Jay Kennedy said: “It’s increasingly clear that the Charity Commission is not adequately resourced to meet the regulatory challenges it faces. However, there are serious downsides to any proposal where significant parts of its budget are derived from charities.

“Not least because introducing a levy or charges would be the thin end of the wedge – the more money is raised, the more the Treasury will cut. There are good reasons why the Charity Commission answers to parliament not a minister or the government of the day – because its independence is critical.

“We need to explore ways of giving parliament more of a binding say in how its budget is determined. This could give the Commission more and potentially more stable funding in future.”