The National Audit Office, in a follow-up to its December 2013 report on the regulatory effectiveness of the Charity Commission, has today found that the Commission has made good, early progress in addressing all NAO and Public Accounts Committee recommendations and developed a credible change programme. However, much hard work and significant challenges lie ahead.
This early review of the Commission’s progress found it has developed a new business model which focuses more of its resources on high-risk cases and aims to automate low-risk transactions. Under its new Chief Executive, the Commission has also begun a three-year ‘change programme’ which aims to transform it into a rigorous and proactive regulator, underpinned by £8 million of additional one-off funding from the Treasury. The programme is in its early stages although key aspects of good programme management are in place.
Today’s report found the Commission is making more effective use of its powers. In 2013-14 it opened 64 statutory inquiries (its most serious form of regulatory action) compared to 15 the year before. These inquiries have led to £47 million of charitable funds being accounted for. The Commission used its information gathering powers 652 times in 2013-14, compared to 200 times in 2012-13, and its enforcement powers 56 times in 2013-14, compared to 3 times in the previous year. Use of these powers in investigations completed in 2013-14 has protected £31.3m of charitable assets, including the recovery through litigation of £1 million for charities.
The Commission is making better use of data, for example by matching its data against the National Fraud Database. It also plans to cross-check registered charities with charities claiming gift aid. However, the Commission shares twice as much information with other public authorities as it receives. The NAO recommends that the Commission persuade public authorities to share more information with it.
The Commission is updating its approach to assessing regulatory risk, and is building its skills and capability through the recruitment of senior staff and board members with experience in fields such as fraud prevention, counter-terrorism and operations, although it currently lacks a board member with expertise in IT.
According to today’s report, the Commission has more to do to understand the unit costs of its new regulatory model, and it has not yet quantified the relative benefits of different activities, limiting its ability to take informed decisions about where best to direct its resources.
It has improved its follow-up checks of what trustees tell it, although the Commission still does not follow up on all the issues the NAO might expect it to. The NAO found cases where
the Commission had not checked before closing the cases whether trustees had complied with its instructions.
The NAO also notes that the Commission is taking longer to register charities, resulting in the build-up of a backlog of applications. The Commission aims to clear the backlog by the end of January.