The Charity Commission is lobbying the Treasury to allow it to spend £1.5m in reserves that the Commission has accumulated in recent years.

The Commission says that access to these reserves would help to soften the impact of the budget cuts that are sure to come in the spending review, but to date the Treasury has refused to allow the regulator to use the money.

A Commission spokeswoman confirmed: “Under a system known as ‘end of year flexibility’ government departments which have underspent on their budgets can apply to the Treasury to be granted access to these funds to apply them in subsequent years.

“While accessing reserves in end-of-year flexibility has always required departments to submit a business case and has never been automatic, indications now are that the system for granting access by the Treasury is becoming more robust.

“To this end we have not, to date, been able to access £1.5m of our reserves. We are still in discussion with the Treasury about this issue.”

The Commission is facing a real-terms funding reduction of 5 per cent this year and is planning to reduce its total workforce by another 60 employees to 425 by the end of March 2011.

This compares with over 600 staff in 2005 and represents a real-terms funding cut of 16 per cent since then.

A Treasury spokeswoman responded that 'end of year flexibility' claims are discussed with departments over the course of the year and added: "We do not provide a running commentary on this process. Final decisions on end of year flexibility will be set out in the Spring Supplementary Estimates.”