NCVO How can charity regulation be made more effective for the voluntary sector? Background For some years charities have been adapting to key changes in the policy environment (eg public sector funding, public service delivery) — but substantive developments gave also been happening with regards to charity regulation, with important consequences for charities and their trustees. ‘Two separate reviews of the effectiveness of the Charities Act, by Lord Hodgson and the Public Administration Select Committee led to recommendations on a number of key issues, such as the role of the Charity Commission charity registration public benefit self-regulation of fundraising charging for regulation. One of the recurring questions, since Government's Comprehensive Spending Review Settlement in 2011 reduced the Charity Commission's budget by 33%, is how the Commission needs to re-priortise its activities and focus on its regulatory functions. This has been further highlighted by the recent report by the National Audit Office on “The Regulatory Effectiveness of the Charity Commission’, which concluded that the Commission is not regulating charities effectively In particular, it concluded that the Commission does not do enough to identify and tackle abuse of charitable status. This has led to the Minister for Civil Society Nick Hurd MP launching a consultation on extending the Charity Commission's powers. The purpose is to examine how the Charity Commission tackles serious abuse and how the range of criminal offences that disqualify people from being a charity trustee could be extended. What are the challenges for the voluntary sector? The past 12 months have brought a number of challenges to the sector, such as: the Cup Trust expose the lobbying bill significant changes to Judicial Review the media criticism of charity chief executive salaries‘+ continuous criticism by some politicians and parts of the media about prosecutions and campaigns run by the RSPCA, ‘© the recent BBC Panorama investigation into charity investments + several consultations carried out by key Government departments without having proper regard to the Compact. Various remarks made by the new Chair of the Charity Commission have also raised concern within the sector. These comments from the recently appointed chair include subjects such as charity chief executive pay (‘Stop 'moaning' and justify your top salaries, William Shawcross tells charities’) and public funding received by some charities (‘Charity Commission chair calls for debate on definition of charity’), Many in the sector’s media have joined the dots together and see all these individual challenges as the sign of an increasingly hostile environment. There is particular concern about a negative attitude in the government towards campaigning, see the Panel on the Independence of the Voluntary Sector, as demonstrated by the support within certain political arenas for the ‘Sock Puppets’ report. How can regulation be made easier for charities and the voluntary sector One of the key goals of the Office for Civil Society's strategy is to make it easier to run a charity, social enterprise or voluntary organisation, as set out in ‘Building a Stronger Civil Society: a long term strategy for voluntary and community groups, charities andsocial enterprises’, As part of this there have been a number of initiatives aimed at removing red tape and improving regulation, such as ‘+ dealing with barriers and bureaucracy identified through the Red Tape Challenge and the ‘Unshackling good neighbours’ report * introducing a new legal structure for charities (the Charitable Incorporated Organisation, CIO) that will make it easier to set up and run a charity putting some of Lord Hodgson's recommendations from his review of the Charities Act 2006 into action. However, some of the suggestions arising from the reviews of charity law and the more recent consultation on the Charity Commission's powers may be unpalatable to the charity sector. Some of the more significant proposals are: + introducing financial penalties for late filing of accounts * widening the types of criminal offences disqualifying individuals from charity trusteeship requiring charities to declare in their annual returns how much of their spending has gone on political and communications work, and on their income sources. Many charities and voluntary organisations recognise that appropriate regulation is both necessary and beneficial: not only does it provide a level of protection to their National Council for Voluntary Organisations Society Building, 8 All Saints Street, London N1 9RL 7:0207713 6161 F:0207713 6300 E: ncva@nevo-volorguk W: wwnunevo-volorg uk company itd by puree Regen Egan Region na. EDA Rete char, 225922Regeted ice asabveorganisation and to their users or beneficiaries; it aso promotes public confidence in the sector. But this support in principle is often matched by frustration with the way regulatory processes work in practice and the impact on their activites. So a good model of regulation must balance the need for orgarisations to be as transparent, accountable and responsible as possible, with the need for proportionality and workability For members We want to hear your ideas for the future ~ answer questions on charity regulation, Our election work will be stronger if we have real examples from our members —if you have experience of the challenges associated with this issue, we would love to hear from you. Send us examples of your experiences to 201 Sproject(@ncvo-volorg.uk National Council for Voluntary Organisations Society Building, 8 All Saints Street, London N1 9RL 7:0207713 6161 F:0207713 6300 E: ncva@nevo-volorguk W: wwnunevo-volorg uk company itd by puree Regen Egan Region na. EDA Rete char, 225922Regeted ice asabve