The ICAEW has responded to the Charity Commission’s consultation on charity registration by increasing the pressure on the sector regulator to abandon its Summary Information Return.

Anne Davis, head of charity and voluntary sector at the Institute of Chartered Accountants in England and Wales (ICAEW), wrote a letter to the Commission responding to the sector regulator’s Register of Charities: a review of information collected from charities consultation.

In the letter, which has been published on the ICAEW website, Davis criticises the SIR - an additional part of the Commission’s annual return which must be filled in by all charities with a gross annual income greater than £1m.

“We think that the charity accounts and annual reports, together with information available on the charity website, provide sufficient information to the public about the charity,” she writes. “Therefore, our preference would be for the Summary Information Return (SIR) to be discontinued on the grounds it contains duplicate information which is not subject to external scrutiny.

“The accounts of charities contain vast amounts of information which is looked at by their stakeholders and if appropriate, externally scrutinised. As the accounts are easily accessible on the Charity Commission’s website, there is no reason to require information to be duplicated through other channels such as the SIR.”

Davis goes on to say that any information in the SIR which is not already available in the annual reports and accounts should be included in the trustees’ report – which, unlike the SIR, is subject to external scrutiny.

She adds that ICAEW members who are advisors to charities rarely look at the SIR for sources of information, and instead focus their attention on the annual reports and accounts, the annual review and other information found on the charity’s website.

The Charity Commission has been consulting on its review of the information collected from charities since 29 May 2012, offering the chance for interested parties to fill in a survey and leave their comments. 

Hodgson calls for end to SIRs

Davis’ view echoes that of Lord Hodgson, who recommends in his report to Parliament reviewing the Charities Act 2006 that SIRs be abolished (stated on page 128 of his report, which can be found on the Cabinet Office website).

Earlier in the report (page 68), Lord Hodgson elaborates further, saying that “the SIR… was seen as an unnecessary duplication of information provided elsewhere and thus of questionable value. Many suggested it should be abolished and I see no reason to disagree.”

Last month, the head of policy and public affairs at CFG Jane Tully called the SIR "onerous and unnecessary" and also called for it to be abolished.

The SIR 'has an important role'

The Charity Commission descirbes the purpose of the SIR as to "better inform the public about the good work carried out by the larger charities."

The organisation says on its website that the SIR is designed to provide a "snapshot" of a charity's aims, activities and achievements and that it enables a charity to give an indication of factors that have affected performance during the year.

“We believe the SIR has an important role in giving the public, as interested consumers and taxpayers, more information about how different charities benefit society and what they have achieved,” the Commission states.

The sector regulator introduced the SIR in 2005 “after extensive consultation”, partly following its own research finding a strong public demand for information on how charities use their funds and what benefits ultimately come of it.

Further inspiration came from the government’s strategy unit report Private Action, Public Benefit, which in 2002 recommended that the public "should have access to more relevant, timely and accessible information about the effectiveness, performance and financial position of larger charities".

Charities over £5000 'should register'

Davis makes other recommendations elsewhere in her six-page letter, including writing that it would be “helpful” for the Commission to show if a charity has been established because an unincorporated charity has adopted a company structure.

She also states that all charities over £5,000 income should be required to register – though concedes that the Commission would need to be sufficiently resourced to handle the demand this would create.