Sir Stephen Bubb, the chief executive of Acevo, has criticised the Charity Commission’s handling of the Kids Company collapse, saying it should have intervened earlier to help the charity build reserves.
In an opinion piece published today by Civil Society News, Bubb questions why the Commission has only now taken action, and says the “charity’s annual returns with perilously low reserve levels” should have set alarm bells ringing.
He says that "earlier triage intervention", by the Commission “could well have prevented Kids Company from a fatal collapse of governance” which has had a “profound impact” on public concerns about good governance in the voluntary sector.
He says he recognises the fact that the “Charity Commission has been subject to funding cuts, hampering its activity and manoeuvrability”, but that even with these financial restrictions “its activities have not engendered confidence that it is currently capable of discharging its mandate effectively”.
"The Charity Commission has launched an inquiry into the causes and consequences of a fire," he says. "What the Charity Commission needed to have done was to undertake the far simpler and cheaper intervention of installing a smoke detector.
“The Charity Commission itself must learn the lesson that it has a responsibility to support and advice for charities generally”.
Bubb also said he feels the Commission has “been given a relatively light ride," over its handling of Kids Compny.
"You would have thought they would have looked more closely at an organisation which is as high-profile as Kids Company," he wrote. "It’s clear from what we’ve seen so far that they need to be more proactive in their advisory role."
The buck "always stops" with charities, says Shawcross
However William Shawcross, chair of the Charity Commission, defended the Commission's handling of the affair in an article for the Financial Times.
Shawcross said it was not the job of the regulator to save failing charities and that the responsibility lay with the trustees.
He said that “trustees need to be able to read the balance sheet and to hold the executive to account”.
Shawcross also said that, due to the Commission’s budget being slashed by a third since 2010, the Commission simply does not have “either the authority or the resources to scrutinise the activities or accounts of all 160,000 charities registered with us”.
The Financial Times quotes Shawcross as saying that “the harsh reality” of the sector is that charities are effectively competing for the same “limited funds” and that some organisations “may not be able to survive”.