NAO report on the Charity Commission and the Cup Trust

Sir Stuart Etherington, chief executive of the National Council for Voluntary Organisations – the representative body for charities, said:

‘This report reflects what we have said for years. In order to maintain public trust, charities want a vigilant and effective regulator which takes prompt action in the rare instances of abuse. While it’s important the Commission doesn’t throw the book at charities that have made a simple mistake, for too long it has veered the other way, taking a soft-touch approach in even the most serious cases.

‘In the case of the Cup Trust, the Commission became paralysed by a narrow, legalistic view which demonstrated a real lack of common sense.

‘The Commissioners seem to have realised the error of their ways and there is some evidence of progress. The Commission is now making greater use of the legal powers it has to investigate charities, for example. But there is a long way to go. In particular there needs to be cultural change throughout the Commission to take it from a period in which it was expected to be a friend to charities to one in which it must be an effective regulator, focusing on compliance with charity law. The NAO should review progress against its recommendations in 2015.’

Notes

In a speech in May this year, Sir Stuart said the Cup Trust affair had seriously undermined the Commission’s credibility as an effective regulator and damaged the charity sector.

NCVO’s 2011 report, Managing Risk – A new approach to the fit and proper regulation of charities (PDF), called for better information sharing between HMRC and the Charity Commission in cases of potential abuse – a call echoed in the NAO’s report today. It also called for stronger powers for the Commission to disbar trustees who are convicted of offences such as fraud.

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