The Charity Commission will see its annual funding drop by 27 per cent over the next four years as a result of the government’s comprehensive spending review.

The regulator said it anticipates reducing its workforce by around 140 full-time staff in order to cope with a reduction in its funding to £21.3m by the 2014/15 financial year.

The full breakdown of its planned funding is:

• 2010/11 (current year): £29.3m
• 2011/12                         £26.5m
• 2012/13                         £25.7m
• 2013/14                         £22.0m
• 2014/15                         £21.3m

Its capital funding is also being reduced by 50 per cent to £0.4m each year.

In addition to the reduction in staff, the Commission is to undertake a comprehensive review of its strategy and operating principles, and continue to cut regulation costs with initiatives such as moving more services online and reducing back office administration costs.

It will begin a public consultation on the strategic review in the next few days.

Business as usual “not an option”

Commission chair Dame Suzi Leather called the settlement “extremely challenging” and said naturally the regulator was “disappointed”.

“Clearly a very different approach is now needed - business as usual is simply not an option. We will need to make significant changes to the way in which we engage with charities and the public, the services we offer, and the scope and shape of our regulatory activity.

“This will not be easy, but we are determined to continue to develop the Commission as an innovative, confident and flexible modern regulator, within the resources available.

“We remain committed to maintaining the high levels of public trust and confidence that charities currently enjoy, reducing the administration burden on charities and enabling them to maximise their impact.”