Conclusions and next steps

We have now published the initial conclusions and next steps, following the first stage of our review.

The public and the charity sector warmly endorse the role of the independent regulator in protecting the public interest in charity and holding charities accountable for the privileges of charitable status. They also endorse the Charity Commission’s general approach and recognise our improved effectiveness – there is no support for complete and radical change.

There is however support for a clearer focus on our core regulatory role and responsibilities – this combines with the financial imperatives of our funding reduction of 33% in real terms over the next four years. We will need to concentrate our resource on the activities which only we as independent regulator can carry out.

The Commission’s core purpose as regulator is to protect and serve the public interest in the integrity of charity. We do not exist to act on behalf of charities, although in effectively regulating them we support them and their activities. We deliver against our purpose through our core regulatory activities – registering charities, providing guidance to trustees to enable them to manage their charity effectively, ensuring charities are accountable through us to the public by requiring and publishing information, giving permissions as required in law, and taking action to deal with serious mismanagement or abuse of charity.

In focusing more clearly on our core role and responsibilities, we need to rebalance the relationship between the regulator and the sector: reinforcing the confidence and self-reliance of charities to make their own decisions within the legal boundaries wherever possible, minimising our intervention in individual charities, and promoting the accountability of charities to the public.

You can see the full note of our conclusions and the next steps here.

Next steps

The Board has agreed a number of projects to develop the detailed plans needed to underpin our future strategy. These are:

• Agree a new single risk and proportionality framework to set out our regulatory approach and promote clear and consistent decision-making
• Work with umbrella bodies and charities to develop our signposting and create partnerships which will, in time, enable them to take responsibility for individual advice to charities in most areas (we will also review and agree those limited areas where the Commission must continue to provide individual advice)
• Review the information we require from charities and the ways in which we publish, display, share and use it
• Develop a ‘peer review’ scheme involving experienced people from within the charity sector to help individual charities, and the Commission, identify risks
• Consider opportunities to reduce the regulatory burden of legal permissions and consents, including self-certification and increasing thresholds

These projects will involve further external and internal discussion and consultation. We have already been in touch with some key stakeholders and will be publishing more details for comment in due course.

The Board have also agreed an integrated project, led by the Chief Executive, to devise a new organisational structure for the Commission, identify our accommodation requirements for the future, and undertake a skills audit. These will be the subject of further internal consultation during March and April with the aim of setting out the new structure, formally consulting on it and starting to implement the changes from early May.

Some of the issues identified through the consultation relate to primary legislation and can only be addressed through the forthcoming review of the 2006 Charities Act which the Office of Civil Society is expected to lead some time this year. The Commission will be developing our approach to the review of the Act as part of our own strategic review. We will also continue to consider possible options for the future funding of our work, although it is clear that no change to our funding regime could take effect before 2015/16.

We are deeply grateful to all those who contributed to the review for their time and the quality of their responses, and continue to welcome comments on this blog or emailed to strategicreview@charitycommission.gsi.gov.uk

Results of our consultation

This is a summary of the key themes from across the consultation responses we received.

1) What do you think are the key risks to the impact and effectiveness of the charitable sector over the next 5 years?

• Funding – most commonly mentioned risk is reduced public sector funding but respondents also identify concerns about public giving, investments and depletion of reserves as well as Gift Aid
• Increasing demand for services – drivers mentioned included state withdrawal, economic challenges and the ageing population and many respondents point to the combination of reducing funding alongside increasing demand prompted by the economic situation making this risk particularly acute
• Lack of skills or capacity among trustees, volunteers and staff – a shortage of trustees was frequently cited
• Bureaucracy/legislative burdens – specific areas singled out include CRB checks, employment law, annual returns and administration associated with grant applications but many respondents simply identified the general burden of bureaucracy as a risk
• Fraud/abuse of charity and consequent reputational damage affecting public confidence
• Commission not adequately resourced/ineffective regulation
• Poor governance, often cited as linked to a shortage of trustees or poorly skilled trustees
• Inadequate transparency/accountability
• Mission drift or stretching the definition of charity and consequent damage to public confidence
• Politicisation, loss of independence, charity being exploited by government or charity campaigning damaging relationships with government
• Big Society – concerns raised about whether this concept means less funding and/or less centralised support
• Small charities lose out under financial pressure and difficult contracting environment
• Inflated salaries/administration costs damage public confidence in charity
• Too many charities

2) In light of the key risks you have identified, what are the key expectations you have of the Commission?

• Prevent/investigate abuse or concerns about mismanagement – with fraud frequently mentioned
• Transparency of financial information/ensure compliance with financial information requirements – a number of surveys mention proactive monitoring of accounts
• Registration of charities – many respondents say they expect detailed or stringent checks on charities at registration and others cite the public register as a key expectation of the regulator
• Uphold the charity brand/reputation of charity
• Publish general advice for charities – issues mentioned include responsibilities of trustees, trading, contracts; several respondents mention positively the resources on the Commission website and others highlight the importance of simple, accessible guidance
• Lobby government on charity issues/champion charities – although some respondents actively oppose this role
• Provide information or research on the charity sector
• Specific advice/helpline – this is particularly mentioned as useful for small charities; while some respondents suggest that specific advice is best given by sector bodies, others note the value of advice direct from the regulator
• Encourage trusteeship/volunteering
• Promote charitable giving
• Encourage or require mergers/promote collaboration/reduce the number of charities on the register
• Light touch regulation/minimise bureaucracy/reduce red tape
• Promote effective use of charitable resources/require charities to spend less on administration, salaries & expenses
• Promote self regulation/self assessment
• Measure and monitor the outcomes of charitable activity, promote focus on impact
• Commission should be independent/less political

3) Which of these statements do you most agree with?

The Commission should protect the reputation of the charitable sector by being rigorous and questioning before accepting registrations – 77.6%
The Commission should encourage charitable activity through a light touch registration process – 22.4%

The Commission should rely principally on transparency to meet its regulatory remit – 38.6%
The Commission should play a pro-active regulatory role as a deterrent to abuse of charitable status – 61.4%

The Commission should investigate individual organisations only rarely and in cases where large amounts of charitable funds are at risk – 25.7%
The Commission has a responsibility to investigate any case where there is prima facie evidence of a registered charity breaking charity law – 74.3%

Charity trustees should be left to make their own decisions on issues such as trustee payments or selling land – 53.6%
Proposals by charities, such as selling land or making payments to trustees, should be carefully considered by the Commission and be subject to its approval – 46.4%

The Commission should be a key ‘enabler’ through the regulatory advice it provides to individual charities – 68.2%
The Commission should put its guidance on the website and not give any advice on a one-to-one basis to individual charities – 31.8%

The Commission should focus primarily on helping charities to understand the legal requirements and to run themselves effectively – 67.3%
The Commission should focus primarily on dealing firmly with non-compliance with charity law – 32.7%

The Commission should focus on the public information it gives about the charity sector – 50%
The Commission should encourage others to do more to provide information to the public – 50%

The Commission should get involved in investigating only issues or organisations of national significance – 23.6%
Issues of significance for local communities should be addressed by the Commission just as actively as issues of national significance – 76.4%

4) Other bodies which could take on functions currently carried out by the Commission

30.9% of survey respondents thought another body could take on CC functions: the most commonly mentioned examples are NCVO, CVSs and other umbrella bodies, HMRC, Companies House, the Charity Tribunal, the police and the courts. Some respondents commented that funding constraints within the public and charitable sectors might make other bodies unable or unwilling to take on responsibility for new functions. Other respondents used this section to advocate that the Commission should seek to work in partnership more often or to suggest charging for services.

Click the links to see the full list of meetings we held, copies of all the written responses we received, full results from the completed surveys, and a copy of the report from the public focus groups Ipsos MORI ran for us.

Formal consultation has closed - but the blog stays open

The formal consultation period for the first stage of our strategic review has now closed - thank you for all your responses. As well as the comments posted on this blog we have had more than 200 completed surveys and over 100 emailed responses, along with interesting and productive meetings with a large number of different stakeholders.

We expect to be able to say something about the initial conclusions and next steps for our review some time in February, along with publishing a summary of responses we received.

Meanwhile we will continue with the second stage of our review, where we will be looking into the ‘nitty-gritty’ of the Commission’s structure and activities – and into resource allocation.

We will keep the blog updated as our strategic review continues, posting specific questions and publishing suggestions for feedback, so please feel free to continue to comment publicly or email us at strategicreview@charitycommission.gsi.gov.uk with your thoughts.

What role should public information have?

This is an open question for discussion - which of the following views do you tend to agree with more, and why?

a) The Commission should focus on the public information it gives about the charity sector

OR

b) The Commission should encourage others to do more to provide information to the public

Guardian Q&A with Sam Younger

Sam Younger took part in a live Q&A on the future of the Charity Commission on the Guardian website on 10 January - you can see it here

Should we focus on explaining the law or enforcing it?

This is an open question for discussion - which of the following views do you tend to agree with more, and why?

a) The Commission should focus primarily on helping charities to understand the legal requirements and to run themselves effectively

OR

b) The Commission should focus primarily on dealing firmly with non-compliance with charity law

Should we give one to one advice to charities?

This is an open question for discussion - which of the following views do you tend to agree with more, and why?

a) The Commission should be a key ‘enabler’ through the regulatory advice it provides to individual charities

OR

b) The Commission should put its guidance on the website and not give any advice on a one-to-one basis to individual charities

Should charities have to seek permission from the Charity Commission for their decisions?

This is an open question for discussion - which of the following views do you tend to agree with more, and why?

a) Charity trustees should be left to make their own decisions on issues such as trustee payments or selling land

OR

b) Proposals by charities, such as selling land or making payments to trustees, should be carefully considered by the Charity Commission and be subject to its approval

Should we investigate every single case of breach of charity law?

This is an open question for discussion - which of the following views do you tend to agree with more, and why?

a) The Commission should investigate individual organisations only rarely and in cases where large amounts of charitable funds are at risk

OR

b) The Commission has a responsibility to investigate any case where there is prima facie evidence of a registered charity breaking charity law

How should we balance transparency and proactivity?

This is an open question for discussion - which of the following views do you tend to agree with more, and why?

a) The Charity Commission should rely principally on transparency to meet its regulatory remit

b) The Charity Commission should play a proactive regulatory role to deter abuse of charitable status

What should our approach be to registering charities?

This is an open question for discussion - Which of the following views do you tend to agree with more, and why?

a) The Charity Commission should protect the reputation of the charitable sector by being rigorous and questioning before accepting registrations, even if that means registration takes longer and fewer charities can be registered

or

b) The Charity Commission should encourage charitable activity through a swift, light touch registration process, even if that means very few checks on charities before they are registered

Should another body take on any of the Commission's functions?

This is an open question for discussion - Is there another body or bodies that could, or should, take on any of the functions currently carried out by the Charity Commission?

Third Sector article on the strategic review

Charity Commission goes for a fundamental review - read Third Sector's article on our strategic review here

Guardian interview with Sam Younger on the strategic review

Charity Commission enters a new phase - read the Guardian's interview with Charity Commission chief executive Sam Younger on the strategic review here

What are your expectations of the regulator?

This is an open question for discussion - what are the key expectations you have of the Charity Commission, and why?