Examination of Witnesses (Questions 640
- 659)
WEDNESDAY 7 JULY 2004
MS GERALDINE
PEACOCK, MS
ROSIE CHAPMAN
AND MR
KENNETH DIBBLE
Q640 Chairman: What difference will
it make?
Ms Peacock: The difference to
the small charities particularly or to all charities?
Q641 Chairman: To small charities.
Ms Peacock: I think it will allow
the Commission not to just focus on the big charities because,
through working with the big charities to be more self-accountable,
we can be less focused on them and more focused on helping them
work with the smaller charities to empower themselves as a network,
large and small, to work together responsibly as a sector. At
the moment, we almost have a sector of two halves: the top 200
and the majority of the others. What you do not see is inward
investment, if you like, in capacity building between the two
and I think that, by having more enlightened legislation and enlightened
regulation on the back of that, you will see a growth of capacity
building between people in the sector which will mean the smaller
charities working better supported and becoming regulation ready
if they want to grow to scale too.
Q642 Chairman: I think that is an
interesting point of view but one which the Committee has heard
reflected from a number of witnesses both in writing and verbally
is the big difference in the sector and the huge diversity in
the sector between the very large, sometimes multinational, sometimes
multimillion-pound organisation employing sometimes thousands
of staff and the vast majority of the sector that is small, doing
good works in the community and making a difference day in and
day out. Do you think that that differentiation should be more
sharply represented in the Bill? In other words, should the way
in which the legislation is framed pay more account to the fact
that smaller charities simply do not have the wherewithal to cope
with a lot of regulation and should that, secondly, be reflected
in the way that the role and remit of the Charity Commission are
prescribed in the Bill?
Ms Peacock: If I can answer in
the general context, perhaps Kenneth and Rosie would like to add
their viewpoint. I think that the more flexibility we have the
better because times are moving fast and small charities do not
perhaps need regulation in the sense that traditionally regulation
has been seen as rather stick rather than carrot, but they do
want a formal association with the regulatory body even if they
are below the levels where they probably have to register as charities.
Q643 Chairman: May I just interrupt
at that point? That is true. The Bill gives you, it seems to me,
a huge amount of flexibility. I suppose my question is not so
much whether we can trust you, although that is an issue that
I think you will want to come to, but the issue is whether or
not the legislation involved should be more prescriptive about
restricting your role vis-a-vis smaller charities. In other
words, the differentiation that you have made seems to me to be
an accurate reflection of where the sector is, a small group of
large charities and then a very large group of small charities.
Should that be more properly reflected in the way that the legislation
is devised?
Ms Peacock: I personally would
prefer for it to remain as it is because I think the definition
of how that should play out in practice should be done in consultation
with the public and with charities themselves rather than prescribed
on the face of the legislation. If you have a communicating commission
and a listening commission which actually takes the views of the
people it is trying to regulate and translates those into action
within a legal framework which allows you to represent the views
of those you are answering to, ie the public and charities, then
that is much better to me than being prescribed because it is
like trying to work with one arm tied behind your back.
Ms Chapman: I just want to say
that it is not that we are not applying risk and proportionality
already at the moment and, in a way, putting an arbitrary limit
on the face of the Bill may not stand the test of time because
I think in some ways it might be better if we are able to perhaps
use the tools we have such as our contact centre and such as our
website which gets about 18 million hits a year to expand and
use those and I think that might be more effective.
Mr Dibble: I would just add that
the Bill actually does set out a raft of measures which will obviate
the need for smaller charities to come to the Commission with
various consents, regulation, changes to objects, powers and things
of that nature. It already moves in that direction.
Q644 Chairman: Yes, but it also sets
out wide-ranging powers, for example, for you to intervene, to
raid premises and to do all manner of things that applies equally
to small as well as large charities.
Mr Dibble: But subject to very
specific controls and regulation by other agencies.
Q645 Chairman: Yes, I understand
that.
Mr Dibble: I would just say generally
on this that the Commission has been given a broad framework with
the '60 Act, the 1993 Act and now hopefully in the new legislation
to regulate charities and, within that framework, it can be up
to the Commission to regulate differentially various sectors and
sub-sectors of the sector in a way which is most appropriate for
the needs of particular sub-sectors within the general charity
community and I think that is the preferred route that the Commission
is seeking.
Q646 Chairman: I can see it from
your point of view because that gives you absolute freedom of
flexibility and that is an absolutely marvellous thing. What we
want to be concerned with is whether or not the freedom and flexibility
for you is going to work for the people. To be honest, that is
what we are really bothered about and we are bothered about the
people in the sector. Your job, it seems to us I think, is to
help the sector rather than hinder it, hence the question! I know
that you and others here have advocated a role in terms of regulation
that is pretty light touch. One witness I think said to us that
we all pray at the altar of light touch regulation. Hear, hear
to that! However, you say in another interview, Geraldine—and,
this time, I do not know if The Times newspaper also misquoted
you and, if so, it is a cause for considerable complaint, I would
have thought, because to err once is human etc—that you
want to transform the Commission into something much larger and
more powerful. That will send a bit of a tremor of concern, I
would have thought, tingling down the spines of every small charity
in the country, will it not?
Ms Peacock: I do not think so
because I think people know me in practice. I have worked in the
sector for many years and I actually feel that, from the letters
of support I have had, people feel it is an unusual move to appoint
someone in the sector to be in charge of regulating the sector
but also hopefully an enlightening move because my way has not
been to jump on people and be powerful, it is to enable people
to work together and that is what I intend to try and do. I think
that the whole answer lies in communication and communication
is about talking to your constituents who are not just charities,
they are the public too who donate the money and we are responsible
and we are responsible to them and to the charities and to the
beneficiaries of the charities, but all of that comes together
in a way which is for best public benefit.
Q647 Chairman: It seems to me that
you are pointing in two different directions at once. You are
on the one hand saying that you recognise that the sector is diverse
and largely small and not capable of dealing with the burdens
of regulation and then you want to be more powerful. What is it?
Ms Peacock: No, I do not think
they are necessarily contradictory. I think I want the sector
to punch at its weight. It is not I who want to be more powerful,
it is that I want the sector to actually deliver what it is capable
of doing and I think that at the moment, because the legislation
is quite constraining, it often punches below its weight. By having
a flexible legal framework, you actually allow people to work
together. Enabling and regulating are two sides of the same coin.
What we have had up until now is a heavy emphasis on regulation
and perhaps not such a heavy emphasis on consultation and enabling.
I would like to see a situation in the future where you perhaps
have self-regulation and peer review as the cornerstone of your
activity which frees up the Commission to actually look at the
focus about what makes a difference for that non-profit activity.
There is a lot of duplication that goes on between regulatory
bodies at the moment and maybe we could work better with other
regulators to actually ensure that we have more time to give to
the rich diversity and wide range of charities that they have,
so that charities are true to themselves, not dominating the world.
Q648 Chairman: If we are going to
have self-regulation and we have too many regulators, who is going
to go out of business?
Ms Peacock: I do not think that
people necessarily have to go out of business. They may have to
be smarter about the way in which they work. There are strategic
alliances rather than mergers necessarily. It depends what is
appropriate in what circumstances.
Q649 Mr Foulkes: Can I just follow
up the Chairman's question. With respect, the Charity Commission
is not just Geraldine Peacock.
Ms Peacock: Absolutely not.
Q650 Mr Foulkes: It is a huge bureaucracy.
Why do you need such a large interventionist bureaucracy in England
when, in Scotland, they are going to manage quite well with a
small organisation, OSCR, and a very light touch? Scotland is
not very different from England. Why can you not manage in England
with a much lighter touch and a much smaller organisation?
Ms Peacock: It is interesting
because I have lived and worked in Scotland for quite some time
too, so I appreciate that it is often easier to get things done
there than it is down here.
Q651 Chairman: Do not play to his
instincts!
Ms Peacock: I had positive experiences
in Scotland! I think we are watching with interest what is happening
in Scotland. We were looking at the move to put criteria together
as is happening in Scotland at the moment vis-a-vis public
benefit for instance. I think that is where we are at the moment.
I do not think that the Charity Commission wants to enlarge. I
am not suggesting it needs to be any bigger. In fact, I think
there are two elements here. One is the legislatory framework
in which it tries to operate and the other is the managerial efficacy
of it as an organisation in its own right and that indeed needs
to be looked at.
Q652 Mr Foulkes: In this interview,
you said that you have set your sights on transforming it into
something much larger and more powerful. In Scotland, OSCR is
being set up in the present and, in the past, they have managed
in Scotland with just the Inland Revenue with a very, very small
unit in the Inland Revenue to keep an eye on charities, many of
which are very similar. I used to be the Director of Age Concern
Scotland. In Scotland, it was much easier to deal with the Inland
Revenue than my counterparts in England dealing with a powerful
charity. Why does it need to be so large and powerful?
Ms Peacock: I do not think that
size matters, to use the old quote. I think it needs to be fit
for purpose, that is what we are talking about. By powerful, if
I am quoted as saying "powerful", what I meant is effective
and efficient and that does not necessarily mean being bigger,
it means working differently. I think the culture of the Charity
Commission has to be one that understands and responds to its
best purpose. If I can give you an example: if you have a charity
where its income primarily comes from local authority contracts
for instance, then maybe there is sense in having some kind of
call-off arrangement with the Audit Committee who do a lot of
the regulating of public services and the Charity Commission,
instead of duplicating activity, just looks at that bit of activity
of the charity which is the added value of the non-profit aspect
of what it does. So, I am talking about proliferation of regulators
and less proliferation in duplication of regulation which seems
to me to go on at the moment. Instead of being the Chief Executive
of a charity as I was, it felt as if I was being done to death
by different regulatory systems.
Chairman: I think that the Committee
would have a great deal of sympathy with your idea of proportion
of regulation if you could suggest which regulators went out of
business as a consequence of greater integration and the light
touch approach that you advocate. So, if you would like to make
a submission to us suggesting which of your colleagues cease to
exist, I am sure we would be delighted to hear it. If we are going
to go down that light touch route, then the accountability of
the Commission will be absolutely critical.
Q653 Baroness McIntosh of Hudnall: Can
I first of all offer my apologies in advance because I am going
off shortly to chair a board of a charitable trust, so I am going
to try and cram a number of issues in under one umbrella question
around accountability. I would like to pick up the question of
the difference between regulation and advice going back to an
earlier point that you made because it has been put to us, as
I am sure you know, by a number of people that particularly smaller
charities suffer from a difficulty, shall we put it like that,
in distinguishing between statutory regulatory pronouncements
and advice and very often treat advice as if it were mandatory.
Is there anything that the Bill could do which it does not currently
do that could sufficiently clearly distinguish between the Charity
Commission's role as a regulator and its role as a giver of advice
and this does, I think, tie in with your point about support and
consultation? So, I wonder if you were able to tell us either
now or later how you see that being reflected in the Bill but
also in practice. I have a couple of other things. It has been
put to us that the accountability of the Charity Commission itself
may be put within the Bill in an ambiguous way, that is to say
it is suggested that it operates on behalf of the Crown and it
has certainly been suggested in evidence to this Committee that
that is inappropriate. I would be quite interested to know what
your views are about that. You are about to embark on a significant
restructuring of the Charity Commission itself. The difference
between executive and non-executive function appears to be very
much more clearly defined within the way that you intend to conduct
yourselves in future. Can you tell us, firstly, how you think
your new structures will improve the relationship between the
Charity Commission and the sector that it regulates and, secondly,
how it will enhance public confidence in the charitable sector
as a whole?
Ms Peacock: I will try. Mr Foulkes,
if you would like more information about what we are doing with
Scotland, we are quite happy to do that[29].
Q654 Chairman: I think what we would
like to know specifically is, if this Bill goes through and if
the Scottish Bill goes through, how you can ensure that if there
are differences in interpretation between Scottish legislation
and English and Welsh legislation the sector does not suffer as
a consequence and critically, therefore, how the Regulators would
plan to work together to ensure that is not to the disadvantage
of the sector. A short paper on that point would be very helpful.
Ms Peacock: Certainly. I think
the first question you asked was whether I felt that on the face
of the Bill there was sufficient strength in defining the relationship
between the advisory and the regulatory role or could it be strengthened
or clarified better. I think some of your previous witnesses have
suggested there might be something that could strengthen that.
Indeed, we would not be against clarification being put in stronger
terms on the face of the Bill, if that would help. We will have
to learn to communicate better about what is advice and what people
are going to be held to account for. I kind of resent the implication
sometimes from some of the evidence that I have read that the
Charity Commission is suddenly going to turn into some big training
agency. I do not see it as our role to bring in skills and techniques.
I see our advice role as really being about knowledge management.
We have an awful lot of fantastic information that I have found
since I have been a Commissioner that I never knew existed when
I was a practitioner of a charity, but it exists as information
rather than as knowledge which is useable for charities to be
on a continuous improvement agenda. So I suppose I see the advice
role in the main for charities—except in special circumstances
which Kenneth might like to example for you—being one of
transforming our information into knowledge which will then signpost
charities to other agencies where they can get the skills they
need to build on that knowledge and develop their own capacity.
That is my interpretation of advice. I do not think you can be
a responsible Regulator if you are not trying to help people make
themselves competent, otherwise you are a dictator, are you not,
and it does not bear any relevance to reality. I want to have
much more of a dialogue.
Q655 Baroness McIntosh of Hudnall: Could
you just say whether or not you think the Bill, as drafted, expresses
what you have just outlined to us adequately or whether it could
better expressed on some of those points?
Ms Peacock: I think the clause
that you are referring to is fine, I feel I can work with that,
but if it helps to put people's minds at rest to have things strengthened,
I have no objection to that either.
Mr Dibble: We knew that the issue
of the Commission having power to give advice and guidance was
an issue where there was concern within the sector and the Commission's
current power is drawn in too wide terms for a variety of reasons.
We have worked with the Home Office to try and devise a formula
which will confine the power to give advice within acceptable
parameters and it has proved to be extremely difficult to do so.
The way it stands at the moment is that the Commission will give
specific advice in relation to trustees exercising their duties
and responsibilities which is very important if trustees are to
have the confidence to do certain things without being held to
account later down the road. There is a secondary area of advice
and guidance in which the Commission has now been given a specific
power and this will enable the Commission both directly and through
working with the sector to have a lower level of advice and guidance
which moves on from the specific duties and responsibilities of
trustees but goes to help and assist and support charities in
furthering their objectives, but it is not the Commission's intention
to get involved in giving advice and guidance in areas which are
a matter for internal charities, for the sector and those sorts
of areas, that is beyond the Commission's competence. The general
advice and guidance we are visioning is specifically related to
the Commission's overall statutory functions and objectives which
we set down in the legislation. So that is their limitation. The
way it will work is that the Commission will use that power proportionately
to assist the sector and to work through sector bodies, particularly
bodies which know best about the internal regulation of charities
and their sub-sector.
Q656 Chairman: Where ideally would
you like to see the Bill amended?
Ms Peacock: I am quite happy with
the Bill as it is in terms of this particular facet.
Q657 Chairman: So there are no specifics
that you are worried about at all?
Ms Peacock: No.
Q658 Chairman: You are perfectly
happy. You have been well consulted, have you?
Ms Peacock: Yes.
Q659 Chairman: You say in your interview
from The Guardian this morning that you are not afraid
"to assert the Commission's independence. The advantage of
the Charity Commission is that it is a non-ministerial government
department—so we are not governed by the Home Office."
In that case, you are entirely happy with what the Home Office
has come up with, are you, you would not alter it one iota?
Ms Peacock: I am of the philosophy
that for a ha'p'orth of tar, etcetera.
29 Ev 223 (DCH 299) Back
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