The Shawcross era: Bonfires, transformation and charity scandals 

01 Mar 2018 Voices

William Shawcross completed his term as chair of the Charity Commission last week, Kirsty Weakley looks back at some of his highs and lows. 

William Shawcross, chair of the Charity Commission

Five years is a long time in charity, and over the course of his tenure as chair of the Charity Commission William Shawcross has overseen a raft of changes. 

When he took up the post at the end of 2012 the Commission was still reeling from funding cuts, and was overseen by the Cabinet Office. It lacked the regulatory clout to crack down on serious abuses and it had an apple green logo.

Today it has just been awarded additional funding from the Treasury, with a consultation on introducing a levy for charities on the horizon. It reports to the Department for Digital, Culture, Media and Sport (or as its minister calls it the ‘department for the things that make life worth living) and its logo is a blue crown. 

Change is never easy, and over the course of the last five years Shawcross and the Commission have been on the receiving end of a diverse range of criticisms. 

‘Put the Commission on the bonfire’ 

Little over a year after Shawcross took up the role it was mooted that the Commission be put on a “bonfire”, with MPs deeply concerned that the regulator was not doing enough regulating.

It was a phrase that came to haunt the Commission as it set about being seen to be a tougher and more proactive regulator in the years that were to follow. 

The comments were made in early 2013, in response to the Cup Trust scandal - one of the first times the sector hit the headlines.

A Times investigation had revealed that a charity, the Cup Trust, was at the centre of a Gift Aid scam and prompted a period of intense media scrutiny of the Commission. 

The Commission’s initial response was poor. It said it had been aware of the Cup Trust, but could not do very much because the charity wasn’t breaking any charity law - its objectives were ‘charitable’ and it was for HMRC to police Gift Aid. This wasn’t a particularly satisfactory answer, and it did not go down well with the media, the sector’s umbrella bodies or politicians. 

The Public Accounts Committee took an interest and the National Audit Office was sent in to investigate. Shawcross, and Sam Younger, then chief executive of the Commission, struggled to answer the committee’s questions when they appeared before them.

Margaret Hodge, then chair of the Public Accounts Committee, was so frustrated with the regulator that she suggested the Commission be abolished. David Cameron had just launched the "bonfire of the quangos" in which he removed scores of non-departmental public bodies, and Hodge seemed to wonder whether the charities regulator ought not to be next.

“Why do we need the Charity Commission at all?" she said. "We could put a little quango on the bonfire here.” 

Transformation 

But the Commission was not “put on a bonfire”. It was instead given an additional £8m form the government to carry out its own digital transformation programme. 

This has meant there has been a lot of behind-the-scenes work going on at the Commission to improve its systems, processes and retrain staff so that it can operate more efficiently and identify risks more easily. 

Dan Corry, chief executive of NPC, praises the way the Commission has “got its act together” in terms of gathering data and making it “much more accessible” and also communicating better with trustees. 

Charities are only just beginning to see the results of this work with the Commission in the process of rolling out a suite of new online engagement tools. All potential charities now apply to join the register online, charities submit their annual return and accounts online and the Commission will soon launch a portal to deliver targeted and appropriate messages to trustees. 

But the focus on this transformation programme has also led to greater day-to-day involvement in the regulator’s activities by the board, something that was signed off by the then minister for civil society and extended indefinitely. 

A summer of crisis

The summer of 2015 saw the charity sector come under public scrutiny when Kids Company collapsed and unethical fundraising practices were exposed in the media. 

There were the inevitable questions for the regulator about why it had not spotted these issues or sooner, but the were so many other people to blame for both these issues that the Commission’s own failings were seen as part of a wider problem and the regulator didn’t face the same calls for its abolition as it did in 2013. 

Both scandals led a renewed focus on the importance of governance and leadership, which to its credit the Commission has capitalised on. There have been a raft of changes in the Commission’s guidance for trustees. It also expects more from auditors when it comes to reporting issues at charities, though it appears auditors have been slow to comply with this, as last week the Commission revealed that only a quarter had managed to follow the new rules. 

Looking back over our archive, Shawcross was warning about the public’s attitude to face-to-face fundraisers early on in his tenure. He wasn’t the only one to do so of course, but it is a helpful reminder that it is important for the regulator to have experience from outside of the sector it’s regulating. 

But both Kids Company and the fundraising scandal (and presumably the unfolding scandal around international aid) have demonstrably damaged public trust in charities. The Commission’s own research has shown this, and it is an issue that its next chair, Baroness Stowell, has said is the most pressing thing to deal with. 

Relationship with the sector

Shawcross hasn’t had an easy relationship with the sector’s infrastructure bodies, who have at times found his interventions unhelpful. 

His comments to the national media on high chief executive pay caused a certain level of consternation - comments he stand by, and are in many respects valid arguments, but which handed the right-wing press another stick with which to bash charities. 

Kristiana Wrixon, head of policy at Acevo, says that while Shawcross had professed an ambition to be a  ‘friendly policeman’ to the sector “I am not sure how often people felt the friendly part of that”. And Corry adds that it “a little bit less negative briefing” would have been helpful. 

Things came to a head in 2016 when a number of sector bodies including NCVO, Acevo, CFG and Navca all publicly raised concerns about the regulator’s own governance. 

They were concerned that the board lacked diversity - some had shared connections to right leaning think tanks and the overall impression was of a group of establishment figures. One of its members, Gwythian Prins, had been involved in formulating the Commission’s own guidance on campaigning during the European Referendum while at the same time advocating for Brexit in an essay. 

The next round of board appointments saw a much broader base of people and skills. 

Shawcross' very last outing as chair was to complain in the Times about big charities, umbrella bodies and lawyers obstructing the Commission’s work. 

This prompted a flurry of frustrated tweets from NCVO’s director of policy, Karl Wilding to accuse Shawcross of being “guided more by saying something tough to the press than actually working constructively”. 

Hardly the celebratory bon voyage that he might have hoped for. 

Verdict 

There’s no getting away from the fact that this has been a difficult time for the Commission. But against the odds it is now better resourced and better respected by the media and politicians (even if some still think it is called the Charities Commission). 

For his part Shawcross has spent the last year telling anyone who will listen how much he has enjoyed the job and how rewarding it is, and there is no reason to doubt that. 

And his overarching message as he closed his last annual public meeting in January, that charities need to “live their values” was spot on. 

But at what cost? Charities still feel that in the drive to be seen to be more proactive as a regulator he has focused too much on wrongdoing and not enough on advice and support.

With no sign of things getting any easier in the foreseeable future, and there are some big questions about the regulator’s funding model and its purpose -  let’s hope Baroness Stowell has some of the answers. 

Timeline

 

 

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