Every few days the e-news from the Charity Commission appears in my in box offering a range of information. Sometimes it relates to reports on charities that have gone off the rails and are being investigated, sometimes they provide a reminder of things that Trustees or charities as a whole must do, and why. Occasionally it provides an update on the Charity Commission itself. One of these appeared on Tuesday and it informed readers of some agreements that had been reached between the Charity Commission and three other statutory agencies. These are the Information Commissioner, Oxford City Council, Broxbourne Borough Council and a body I had never heard of before, Kent Intelligence Network which is perhaps the most disturbing of all. It is a shared, primarily software based agency between the various District, Borough and County Council and its role is to ‘achieve savings by identifying fraud through data matching in council tax, business rates, social housing and procurement for all partners’.
The agreements between these organisations and the Charity Commission is referred to as Memorandum of Understandings. As as far as the public information goes the purpose of these MoU is:
This memorandum of understanding (MoU) provides a framework for closer working between the Commission and ………… to assist in their respective regulatory functions.
It is intended to:
- promote a common understanding of the Commission and …………. responsibilities, working procedures, legal powers and constraints
- promote co-operation between the Commission and …………… staff at a strategic and operation level
- facilitate effective investigation with the objective of prevention, detection, and remedy of misconduct or mismanagement in the administration of charities or charitable funds and/or abuse of a tax relief against …………
- ensure the effective disclosure of information in compliance with all relevant legislation
- ensure appropriate consultation on matters of relevant and significant policy initiatives to ensure that charities fully comply with their legal obligations and adopt best practice in governance and accountability
The Charity Commission has gone through a number of changes over the last two decades. At one point it was deemed to be as much a support for charities who are obliged to register with it, as it was a regulator with investigatory powers, although it was not always very effective. I recall a meeting with the Commission in 1999 over a dispute with another charity that related to an agreement that had been entered into by the previous Trustees who had then left the charity. As a new Trustee who had been elected as the Chair I was hoping the Commission would assist in bringing the two charities together so the dispute which had both legal and financial ramifications could be resolved without obliging the charity to resort exclusively to paid advisers. However the only advice we received from the Commission was ‘to take professional advice’. Yet this advice was given after all of the papers had been submitted to the Commission and the representative had sat through an hour long meeting as we explained the issues. They could have sent us that advice at the outset and avoided wasting everyone’s time.
The current culture and purpose of the Commission is now much closer to a body that challenges and investigates charities rather than a more extensive and wider remit for support and advice that acted as the second half of the agency. This came about as a result of the austerity measures introduced by the coalition and also by a tactical decision to move the Commission into the mainstream of the Government rather than it being treated as an Arms Length agency. The current Chair of the Commission, William Shawcross was a deeply political appointment by his friend David Cameron, even though Shawcross had almost no knowledge or experience of the work of charities outside of the Art History genre.
These MoU’s are matters that should concern all charities. The Commission itself is already linked to party politics like all government agencies, unlike the old format of the agency which was at arms length from whichever government was in power. However by establishing a MoU with local councils, the new arrangement runs the risk of politicising the work of charities at a local level. If there was a way of restricting the exchange of data and other information to matters that simply related to law breaking or false accounting then that would be perfectly acceptable. However there is a risk that local councils will utilise the relationship created through the MoU to ensure that their funding only goes to charities which they support politically as well as socially. There is a good reason for charities to stay at arms length from councils and governments. However by triangulating the understanding of charities between councils and the Commission in this way, the freedom of charities is potentially being placed at grave risk.