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Posted 23 March 2017

Update – ‘to charge, or not to charge’

In our blog ‘To charge, or not to charge – that is the question’, we promised to update readers on the possibility of the Charity Commission levying a charge against charities.

HM Treasury has now given the Commission permission to formally consult on funding options. This will be the first opportunity to formally set out the regulator’s thinking on the subject; they say any delay in holding this consultation would be irresponsible given the urgent need for a properly funded regulator.

The consultation will take place ‘shortly’ despite opposition by the sector including (among others) the Charity Finance Group, ACEVO, NAVCA and the Directory of Social Change who all disagree with the principle of paying for the regulator.

The Commission’s funding has fallen by £8m since 2010 and will be frozen until 2020. Whilst levying a charge will help with ever-increasing operational costs, there is a suspicion that charging will compromise the regulator’s independence from charities and lead to a disparity in treatment between ‘high-value’ and ‘low-value’ charities.  There is also concern that it is an inefficient way of raising money and that the charge will justify further cuts by the Treasury.

A survey conducted by Third Sector indicated that out of 225 respondents only 22% were in favour of the charge. It is clear that William Shawcross et al will face an uphill struggle in months to come. We will keep you posted.

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