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New register a goldmine for the tabloid press, warns MP

Finance | Vibeka Mair | 13 Oct 2008

The Charity Commission’s new online register could fuel sensationalist reporting on charities’ spending, a Labour MP warned at a public administration select committee (PASC) hearing on the Charity Commission’s recent work.

The Commission’s online register was praised by the PASC as innovative and a positive development, but Labour MP Paul Flynn (pictured) warned that it would now be very easy for newspapers to rank charities by the amount they spend on administration.

Commission chief executive Andrew Hind said this type of reporting had been around for the past 20 years and the Commission planned to produce guidance on reading charity accounts for the public to avoid misunderstanding.

"We are very conscious about explaining to the public that you can’t just look at the figures without understanding the background to a charity," he said.

Register may highlight single-donor charities

The Charity Commission also said it would consider using the online register to highlight charities that are "overwhelmingly funded from one source", after Flynn raised concerns about some charities being used as a "mouthpiece for the pharmaceutical companies that funded them”.

Kenneth Dibble, the Charity Commission's executive director of legal compliance, admitted that "captive charities" was a difficult area for the Commission as charities were allowed to campaign on issues on behalf of their beneficiaries.

The PASC also praised the Charity Commission's annual report for showing "progress and achievement", however Conservative MP David Burrowes complained about the slow completion of investigations undertaken by the Commission.

"We set tough targets," admitted Hind, "and we accept that we need to improve."

Inquiry targets being missed

The Commission is meeting its target of completing investigations with no statutory powers within six months, but failing to hit its target of completing investigation with statutory powers in nine months.

"In some complex cases other authorities such as the police are engaged," Hind explained. "And we can’t close the case until the police are finished."

"We are in discussion with the Treasury to stop the clock in cases where another authority is engaged and restart it again when we come back."

Worrying funding outlook

Hind also said he had concerns about the funding outlook for the Charity Commission. The Commission’s funding will decrease by 5 per cent each year in real terms until 2011, when a new funding arrangement will be agreed with the Treasury.

"Our core statutory responsibilities like investigations into compliance are not affected by the drop in income streams," he said. "But it has had an adverse affect on activity in added-value areas such as advice and guidance for charities."

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