Wage bill savings at the Charity Commission have finally outweighed the direct costs of making a third of its staff redundant.  But Tania Mason wonders if it is a false economy.

Last year I wrote this story about the amount of money the Charity Commission had spent making 129 people redundant since 2011 (£4.3m) versus the savings that had accrued by then from making those people redundant (£3.3m).

Some readers took umbrage with the angle I chose, pointing out that severance payments occur only once whereas savings from a lower wage bill build up annually.  I responded that I was merely making the point that the redundancies had not yet delivered any savings to the Commission and as more redundancies were planned, it would be interesting to see at what point the savings outweigh the costs.

I promised at the time that “if and when they do, we shall report that as well”.

Earlier this month the Commission published its latest annual report, which revealed that it has agreed another 34 staff redundancies since December 2013, taking total jobs lost in the last three years to 163.

We asked the Charity Commission whether wage bill savings had yet outweighed the costs of making people redundant.  We found that they have.

A Commission spokeswoman revealed that the cumulative cost of exit packages from January 2011 to 31 March 2014 is £4.3m, while savings in wage and salary bills over the same period has already reached £9.4m.

The spokeswoman added: “It’s worth also pointing out  that the savings of £9.4m relate to staff that have already left, and £1.314m of the exit packages cost relate to staff that had not yet left as at the end of 2013/14 and therefore savings relating to this cost have not yet started.”

So now we know. Shedding roughly a third of the regulator’s staff since the coalition got into power has indeed saved the public purse money. However, complaints against the Commission have increased by a third, and any such loss of manpower must inevitably be accompanied by a loss of skills and expertise – as the embarrassing rewriting of an operational compliance report by the regulator last week showed.  As one governance consultant said to me at the time: “Is there anybody left at the Commission that knows anything about how charities work?” Quite.