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House of Lords Select Committee report calls for improvements to funding & regulation changes

House of Lords Select Committee report calls for improvements to funding & regulation changes

The House of Lords Select Committee on Charities has called for more , changes, and stronger for charities in its report published today.

The report, Stronger charities for a stronger society, recognises charities as “the eyes, ears and conscience of society” and voices grave concerns over the reduction in funding from the Treasury for the Commission and by proposals to charge charities an annual registration fee. Additionally, the report voices concerns that the anticipated loss of funding associated with leaving the EU will impact on smaller charities the most.

To be sustainable in the future, the report argues that their contribution must be recognised by the Government, the regulator and by their beneficiaries. The Committee also argues that charities need more funding support to help them meet their core costs, and that grants must play a vital role.

The importance of governance is highlighted in the report. The Committee supports updating the voluntary Governance Code and states in the report that charities must be certain that their governance is strong enough to enable them to face the future. It also recommends greater access to training opportunities amongst other practical measures to strengthen charity governance.

In the report, the Committee also states its concerns that the Government has attempted to inhibit charities’ advocacy role and failed to consult the sector sufficiently on changes that could have a major impact on their activities. It calls on both the Government and the to engage more effectively with the charity sector in future and to ensure that regulations and guidance make clear that these are not intended to restrict charities’ vital campaigning and advocacy roles.

More key findings:

  • Both the Government and the Charity Commission should engage more effectively with the charity sector in future and ensure that regulations and guidance make clear that these are not intended to restrict charities’ campaigning and advocacy roles
  • The report recommends that public bodies recognise the importance of charities enabling innovation and that commissioning arrangements should allow for this, such as through grants to test new ideas and by avoiding ‘overly-prescriptive’ contractual stipulations.
  • The committee also backs extending the statutory duty for reasonable time off work that applies to magistrates and school governors to those who volunteer as charity trustees.

Baroness Pitkeathley, Chairman of the House of Lords Select Committee on Charities, said:

“Charities are the lifeblood of society. They play a fundamental role in our civil life and do so despite facing a multitude of challenges. Yet for them to continue to flourish, it is clear that they must be supported and promoted.

“We found that charities lead the way with innovation, but that this is at risk of being stifled by the ‘contract culture’. And while advocacy is a sign of a healthy democracy, and is a central part of charities’ role, this role has been threatened by Government.

“We hope that charities will be encouraged by this report; that the Government will respect their role; and that in addition it will value the connections charities have with all sections of society, and encourage the vital scrutiny they provide.”


Commenting on the report, the NCVO said that it backed many of its own concerns, including allowing employees statutory time off to act as trustees.

Sir Stuart Etherington, Chief Executive of the National Council for Voluntary Organisations, said:

‘We know the Charity Commission is under financial pressure, and that it is in charities’ interests to have a well-funded regulator. But the Lords have been unambiguous in saying that they do not think the Charity Commission have properly considered their plans to levy fees on charities. The Commission must now consider the questions of principle that the committee have raised before it launches into consultation on the detail of a charging scheme.”

On the subject of trustees, Sir Etherington commented:

“Putting trusteeship on a footing with other public duties by ensuring employers had to make allowances for trustees, as they would for school governors or magistrates, would raise its profile and help broaden the range of people able to contribute by volunteering as a trustee.”

Association of Charitable Foundations’ response

Carol Mack, Chief Executive of the Association of Charitable Foundations, welcomed the “thorough investigation”. She said:

“We are particularly pleased that the evidence given by ACF on the vital work of foundations, the importance of grant-funding and the desirability of supportive, enabling relations between charities, the government and the regulator have been so extensively acknowledged.

“It is also important that the voice of funders themselves were heard. We urge government to consider fully the quoted evidence given by ACF members, as funders and social investors , on issues such as core funding, the pressure on services, the significance of small and medium sized charities and the role of foundations in building leadership.”


Institute of Fundraising’s response

The Institute of Fundraising has published its response to the report. It states:

“There is a huge amount in this detailed report that we support and would like to see put into practice in the near future. In particular the opportunities presented from devolution processes and on improving grants and contracts are key points that should be progressed.

“There is a big opportunity that has been largely overlooked in the report – the potential presented by more and better support to help smaller charities to fundraise. The link between the public and the causes they support goes to the heart of the charity sector. On average, For every £1 invested in fundraising, roughly £4 is received for good causes.  Much of the most innovative and cutting edge practice in the sector is led by charity fundraisers. And yet, some recent surveys show that fewer than one in four local charities and groups feel they have the skills needed to run a successful fundraising campaign.

“So, in addition to the important measures in this report, we would like to see more from government, funding bodies and the charity sector itself to step up support for excellent fundraising to help smaller charities to flourish in the future.”


“£200m loss” to charity sector

The Independent features the Committee’s concerns about likely funding losses to the charity sector as a result of the UK leaving the European Union. It reports that “Brexit will deliver a £200m a year hit to charities unless the Government steps in to plug the gap, a parliamentary committee warns today.”


Melanie May is a journalist and copywriter specialising in writing both for and about the charity and marketing services sectors since 2001. She can be reached via

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