As the spending review and Budget looms, William Shawcross has warned that the Charity Commission would struggle to deliver on even its core function of regulation should it be subject to cuts of 10 or 15 per cent.

The ex-writer and broadcaster yesterday highlighted fighting against further cuts to the cash-strapped Charity Commission's budget as one of his key priorities as chair.

Ten years ago the Commission had double the 309 staff it presently has, and has more recently suffered budget cuts which amount to a real-terms squeeze of a third of its income over three years. As a result, Shawcross warned it cannot absorb any more cuts and still do its job.

"Something will have to give," he said.

Speaking to an audience at the London offices of Farrer & Co law firm yesterday, Shawcross said he hoped that ministers would agree that cuts to the Commission's budget would be counter-productive. 

To some nods of approval from the crowd of charity chief executives and lawyers, Shawcross again mooted the idea that the charity sector consider alternative funding arrangements for the Commission. Asked by civilsociety.co.uk how urgent this discussion had to be, he said that the urgency was partly dependent on the forthcoming spending review.

"If a cut of 5 per cent is imposed, we could probably manage that," he said. "But if it's 10 or 15 per cent, we may have difficulty in maintaining our regulatory function.

"It is a debate we should have about whether the charity sector should take responsibility for its own regulator," he said. "We ought to explore the alternatives."

Asked again by civilsociety.co.uk whether the Commission could foresee a funding arrangement whereby government funds the regulatory function of the Commission, and a charity levy funds the advice and assistance function, Shawcross said that it is not "anywhere near a solution". Ultimately, the funding of the Commission is a matter for government to decide, although the Commission will hope to feed in its own views on the subject.

Sector must improve trustee competence and understanding

As it is presently funded, Shawcross said, the Commission has to focus on its core role: "Regulation, regulation, regulation."

Kenneth Dibble, chief legal adviser to the Charity Commission, said that the charity sector itself must increasingly shoulder the burden of increasing the level of competence and understanding among trustees. He said the Commission would continue to issue guidance, because without doing so it would not be able to hold charities to account.

"Increasingly,  given the pressure on budgets, [the Charity Commission's] personal interaction with trustees - that responsibility might have to pass to the sector itself," he said.  "We do have an interest all the time in that other form of support for the sector, although we might not be able to do it ourselves."

Shawcross priorities

Shawcross was speaking at the lunch on the subject of his chief priorities as chair. Now nearly five months into the post, he spoke with confidence on issues affecting the charity sector.

He said he saw the role of the Commission in relation to the charity sector as lying somewhere between "friendly policeman" and "Robocop".  "Perhaps a firm but friendly policeman," he said.

But while he didn't see the Commission taking a significantly tougher approach on charity regulation, he was clear about its chief stakeholders: "We exist to serve the public, not to serve charities."

Alongside defending the funding for the Commission, Shawcross also identified priorities as explaining complexities of charity law and regulation to the public; to "tell our story".

He said that the full impact of the economic crisis, and indeed the role of Europe in the global balance of fiscal power, is yet to take effect. "This crisis... I don't think has really hit us yet."

Correspondingly, he sees increasing volunteerism as another of his priorities. "I think there will be a need for a lot of that," he said.