NCVO chief executive Sir Stuart Etherington will use a speech today to criticise the leadership of the Charity Commission and warn that it has lost the respect of the sector over the Cup Trust scandal.
And in response to a question from civilsociety.co.uk about whether the regulator can overcome its current problems without a change of leadership, he said: "They have a lot of work to do if they are to regain the trust of the sector."
In a no-holds-barred keynote to the Association of Charitable Organisations’ annual conference, Sir Stuart will say that he felt outrage at the actions of those who perpetuated the Cup Trust gift aid scam. But he will add that most of the frustration that he has heard from charities about the case is directed at the Charity Commission for its failure to take appropriate action against the Trust and for the inadequate performance of its leaders, chair William Shawcross and CEO Sam Younger, in front of the Public Accounts Committee.
“The Commission’s credibility as an effective regulator has been seriously undermined, and I fear it has lost the respect of the sector, with many reviving accusations that it is a paper tiger – not so much a light-touch regulator as a no-touch regulator,” he will say.
“The complete lack of intervention by the Commission in this whole affair has also brought damage and disrepute to the sector as a whole, putting us at serious risk of losing the trust and confidence of the public.”
A narrow legalistic approach to the case superseded common sense, so that decisions were made according to the letter rather than the spirit of the law.
Sir Stuart will say that last week’s announcement that the Commission has finally opened a statutory inquiry into the case has only made matters worse: “While the investigation is obviously necessary, to say that it’s shutting the stable door after the horse has bolted doesn’t quite do it justice.”
Commission 'still the best organisation to regulate sector'
Sir Stuart will insist that the Commission remains the best organisation to regulate charities: “There is no appetite whatsoever to transfer the Commission’s functions elsewhere” – but he will say there are fundamental questions to be answered about its leadership and strategy.
“Many of us in the sector sense that there is currently a lack of direction within the Commission, as if it is struggling to commit to its compliance role, following years of being much more customer-focused.
“Then we look at various recent situations, and I’m not only thinking about the Cup Trust, when the Commission has shown a disappointing lack of bravery to defend charity, and a certain unwillingness to take a stronger position if this would risk using any political capital.”
Broader cultural problems
Sir Stuart will even query whether there is a “broader cultural issue” within the Commission nowadays: “After the significant cuts they have faced, the staff churn that followed, and the loss of institutional memory, I wonder how much those who have remained are feeling adrift.”
Sir Stuart will conclude that he has some sympathy for the regulator, especially in light of its treatment over recent years as a “political football” by elements of Parliament and the media, but that it must rebuild its credibility with the sector and with government, as a matter of urgency.
Commission 'will get through rough patch'
He will end his speech by saying: "I am confident that the Commission will get through this rough patch and will establish itself once again as the proper custodian of confidence in charities."
Asked by civilsociety.co.uk whether he is confident the Commission can achieve this with its current leadership, Sir Stuart said: "They have a lot of work to do if they are to regain the trust of the sector."
