UK Charities to Pay for Regulation

In order to ensure the charity sector continues to be effectively policed, charities may soon have to face annual fees for their own regulation. Currently, the Charity Commission is funded entirely through the UK Government, yet with excessive cuts in funding William Shawcross, the Charity Commission’s chair, believes it is now ‘inevitable’ that charities will soon be charged for regulation.

With endless discussions taking place on whether UK charities should have to pay for their sector’s regulation, research was conducted to uncover different viewpoints on the change. The results indicate that the public are in favour for the charity watchdog to charge the sector for regulation as opposed to it being funded by general tax. 69% of the public fully or partially supported the sector to pay for their own regulation, with only 23% of charities supporting the change. Unsurprisingly, 68% of charities preferred for charity regulation to be fully funded through tax, with only 25% of the public in favour of this.

However, Shawcross stated, “I think it’s inevitable that the sector will have to assume much more of the responsibility for funding the regulator”. The chair of the commission went further on to say that many sectors pay for regulation and that the charity sector should not be excluded from this if they want effective decision making.

The issue arose from the cuts in funding by the treasurer: In 2007/2008, the sector’s budget was set at £31.7m, in the 2010/2011 financial year, the Charity Commissions funding was £29.3m, however with cuts made each year; this has fallen to £20.4m, a total of £8.9m in the last 5 years. As a result, Shawcross expressed that it would be difficult for the Charity Commission to remain effective in the future if continuous cuts in the budget are to be made. It was therefore his responsibility to ensure that the sector was on board with the possible change.

On 17 September 2015, it was stated at the annual public meeting that the commission will resolve the issue in the next 12 months. The Charity Commission are in favour of an annual fee to be made by charities that have an annual income of over £100,000, but are still exploring other options. David Jones, the director of corporate services at the Charity Commission, expressed that the only alternative would be for the commission to “get slightly smaller, slimmer and leaner and work a lot harder”. Labour MP Frank Field suggests that charities paying for regulation would be a “sign that charities aren’t just an add-on to society, they play a crucial role”.

Further discussion on the commission proposal will take place in winter and early 2016.