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

- Link: https://fundraising.co.uk/2017/03/26/house-lords-select-committee-report-calls-improvements-funding-regulation-changes/
- Published: 2017-03-26T10:09:01+01:00
- Author: Melanie May

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

 

The report, _[Stronger charities for a stronger society](https://www.parliament.uk/business/committees/committees-a-z/lords-select/charities-committee/publications/)_,
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.

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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 Charity Commission 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.”

 

## NCVO response

 

Commenting on the report, the [NCVO](https://www.ncvo.org.uk/) 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](http://www.acf.org.uk),
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](http://www.institute-of-fundraising.org.uk/about-us/news/institute-of-fundraising-response-to-stronger-charities-report/)
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](http://www.independent.co.uk/news/uk/politics/brexit-latest-charities-funding-medical-research-house-of-lords-lose-a7650021.html)
unless the Government steps in to plug the gap, a parliamentary committee warns 
today.”

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