Charities fear they will have to fund the work undertaken by the Charity Commission after the regulator had its budget frozen until 2020.
Chancellor George Osborne announced the move in last week’s spending review. The current funding is £20.3m.
Jay Kennedy, director of policy and research at the training and publishing charity the Department for Social Change, said the “the threat of charging charities for their own regulation” was very real.
“The Chancellor could have very easily found £8 million or so to bring the commission’s budget back to its 2010 level, but he didn’t,” he said.
“Maintaining the current direction of travel means the charging discussion isn’t going away – and charities will have to continue to fight the idea.
“The truth is that any significant further degradation of the commission’s budget would call into question its viability as a regulator.”
Andrew O’Brien, head of Policy & Public Affairs at the Charity Finance Group, admitted “it is likely that a consultation on how to fund the commission will be launched shortly.”
Karl Wilding, director of public policy of the national Council for Voluntary Organisations (NCVO), worked out that the freeze would amount to an 8.5 per cent cut in real terms over the five years in question, if growth predications made by the Office for Budget Responsibility were correct.
But William Shawcross, chair of the Charity Commission, said the fact there wasn’t a cut in its budget was testament to “the importance of the commission’s work.”
He said: “The recent high-profile charity crises and the damage these have done to trust in charities shows the importance of an effective charity regulator.
“The freeze will put more pressure on our staff. But we will continue to concentrate on increasing public trust and confidence in charities through being a strong and effective regulator.”
He said there was “little the regulator could do” to make further cost savings without affecting its regulatory work.
Mr Shawcross has previously supported the option for charities to be charged for regulation.
The Charity Commission has seen its funding cut from £40m to £20m in real terms in the last few years. Staff numbers have also been affected, being cut from 600 down to fewer than 300 over the past 10 years.
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