The Charity Commission should have seen that Kids Company was in trouble and intervened earlier, says Sir Stephen Bubb of Acevo.
The Charity Commission’s announcement that it has opened a statutory inquiry into the charity Kids Company is a welcome one. In doing so it recognises the profound impact that the collapse of this charity has had the wider debate and public concern about the governance and regulation of charities.
But this recognition begs the question why only now has the Charity Commission taken action. Where was it before now, did it not have any intelligence or knowledge of just how serious matters were with Kids Company and if not why not? Why, for example, did the charity’s annual returns with perilously low reserve levels not ring any bells?
The Charity Commission receives charities’ accounts and annual returns, which outline reserves levels clearly. So it should be able to spot these problems coming. What is the purpose of sending in accounts if they are not read by anyone?
This is not going to be the only charity failure we will see. We have already seen a number of other large organisations go under recently, including Business Support Services, the British Association of Adopting and Fostering, and Beatbullying last year. And there are often questions around reserves.
Had the Commission been discharging its responsibilities for the pastoral guidance of charities as well as its policing function then the need for investigation may not have arisen if the first place. Earlier triage intervention could well have prevented Kids Company from a fatal collapse of governance.
We recognise that the Commission itself has been subject to funding cuts, hampering its activity and manoeuvrability. However even within this restricted budget, its activities have not engendered confidence that it is currently capable of discharging its mandate effectively.
I feel the regulator has been given a relatively light ride so far. It would seem appropriate that they should have looked more closely at an organisation which is as high profile as Kids Company. It’s clear from what we’ve seen so far that they need to be more proactive in their advisory role.
The Charity Commission has launched an inquiry into the causes and consequences of a fire – what the Commission needed to have done was to undertake the far simpler and cheaper intervention of installing a smoke detector. The Charity Commission itself must learn the lesson that it has a responsibility to support and advice for charities generally.
Sir Stephen Bubb is chief executive of Acevo.
