Charity regulator must catch up


The Charity Commission, the regulator of the charitable sector in England and Wales, is best viewed as a ceremonial body. Yes, he has powers. Yes, he has statutory responsibilities. Yes, he has £ 29million in annual income and 443 employees.

But classify it in your mind as an ancient constitutional feature. One of those curiosities, like Her Majesty’s right to take possession of the sturgeon, landed in Britain. They are to other regulators what Beefeaters are to the British Army. You would be hard pressed to find an impact on the world.

Hopefully that will change: a new candidate for the regulator’s presidency, announced last week, seems well placed for the job. Martin Thomas has a background in finance, insurance and the voluntary sector. Charities are extremely diverse, but united by the need for a strong and effective regulator within them to lead them.

The third sector often has more confusing incentives than business: there are no shareholders to demand value. Donors can be active and effective. But they can also be long dead. Charities are compelled to follow their stated goals, but those can be strange to begin with, and even good goals can become unnecessary. Oh, and someone has to verify that they actually do it.

Other things go wrong in the land of charity: it is a struggle to find trustees with time, inclination and capacity. And the positive reaction from a lot of people – “Oh, good for you!” – about charitable leaders can lead to a lack of focus on results. Many organizations are expected to be amalgamated or restructured.

The commission should help on all of these fronts, offering advice and assisting in individual cases. But, at the moment, he has a bad relationship with the industry. It is also too small to do much beyond publishing general rules and maintaining the list of charities. He has trouble keeping up.

Last week, he released the results of his inquest into the circumstances surrounding the death of Sophie Bennett, a 19-year-old who committed suicide in May 2016. According to a jury at a coroner’s court, the negligence of a charity contributed to his death. She was cared for by the Richmond Psychosocial Foundation International (RPFI), which operated homes for people with severe mental health needs.

In its decision, the jury noted how the charity replaced trained staff with unqualified staff – and therapy for residents with what Bennett called a “boot camp” diet. The Charity Commission revealed last week that the two surviving directors who oversaw this pledged never to be directors of a charity again. (RPFI, which still runs a house, now has new management.)

The coroner, who reported in 2019, also raised concerns about the role of the charity’s founder, then 80. According to the coroner, she had made “important decisions” which staff implemented despite their lack of a formal role in charity or direct knowledge of residents.

It’s bad enough, but an outgoing chairman of the charity’s trustees raised concerns about it in 2015 to the Charity Commission. Lyn Dade said this was causing “serious” governance problems, which she said means the charity could be insolvent. In a statement, the commission said “there is no evidence to suggest that the Commission overlooked or misinterpreted any information. . . this could have indicated that the standards of care at RPFI were threatened ”.

In such cases, other regulators are sometimes involved. The RPFI, for example, was also regulated by the health sector regulator. But these other regulators often rely on the Charity Commission to ensure that the finances and management of institutions are in good shape. Even when he acts, he often does so cautiously, fearing to impose himself forcefully on charities.

In recent years he has also been distracted by concerns about how history is presented on the plaques of stately homes. He was made to wonder if charities were not pursuing their missions by explaining the riches derived from slavery.

The charitable regulator must be bigger, stronger, and genuinely willing to act on messy internal issues. It needs more staff and more power. The industry needs better than Beefeaters.

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