The Regulator for Charities in England and Wales
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Jodi Berg was appointed as the first ICR for the Charity Commission in 2000. She is also ICR for the Audit Commission, the Housing Corporation, Land Registry, The National Archives, and Northern Ireland Land Registers and Youth Justice Agency. She is a solicitor with extensive management experience in both the private and public sectors and a Fellow of the Chartered Institute of Arbitrators. She is not a civil servant or an employee of the Charity Commission or any other public body.
The ICR reviews complaints made by people dissatisfied with the Charity Commission’s own response to their concerns. The service is managerially independent from the Charity Commission and is free to complainants.
Complainants can expect from us:
The ICR is assisted in her work by a small team of staff. Team members are civil servants, seconded from other public bodies, including those for which Jodi Berg is the ICR.
The team members are:
Robin Lockyer
David Davies
Amanda Crosbie
Lesley Duff
Angela Higgins
Independent Complaints Reviewer
New Premier House
150 Southampton Row
London
WC1B 5AL
Tel: 0207 278 6251
Fax: 0207 278 9675
E-mail: enquiries@icr.gsi.gov.uk
Website: www.icrev.org.uk
I am pleased to present my annual report as Independent Complaints Reviewer for the Charity Commission. Since its inception in 1998, the ICR service has expanded to incorporate complaint review about seven public bodies. I was appointed as ICR for the Charity Commission in January 2000.
My role is to consider specific complaints and, where appropriate, to make recommendations to the Charity Commission to secure redress for complainants, or to improve the quality of the service provided to others in the future. The Commission is committed to acting upon my recommendations and has always done so. People turn to me because I can give an unbiased but informed view of the problems that led to their complaints. This does not always result in the outcome they were hoping for, but it always increases their understanding about the service they could have expected from the Commission, and whether it met required standards.
“Any disappointment I feel at your conclusion, which leaves me unsurprised given your remit, is tempered by your exhaustive investigation and the observations you have made together with your insights and the recommendations which you have made... Thank you for your exposition together with your insights and recommendations.”
Complainant.
Often people are seeking a change to the way the Charity Commission approaches its work, and systemic recommendations arising from the review of individual complaints have led to significant improvements in the Commission’s processes and complaint handling. The Commission today is a very different organisation from the one I first encountered. It engages with the charity sector in new and co-operative ways, and the extensive information it publishes promotes understanding of its support and regulatory functions.
Alongside this, the development of a risk-based and proportionate approach to regulation has placed the Commission at the forefront of modern public sector regulators. This new approach, coupled with a tightening of administrative procedures, has had a noticeable impact on what I find when investigating complaints about the Commission’s more recent casework. I am pleased to report a far greater degree of case planning and consistency of action than in the past.
In general, I also find that the Commission has responded well to complaints within its internal procedure, and its Customer Service Managers have tried to see things from a complainant’s viewpoint, even if they cannot always take the action they want. Correspondence is courteous and, where mistakes are made or poor service given, this is acknowledged prior to people referring the problem to me. As a consequence, this year only a small number of investigated cases have been upheld. Nevertheless, this is not always so, and some people have rightly felt aggrieved by what has occurred during their dealings with the Commission.
Whether justified or not, complaints open a window to the way in which the Commission’s service can be better, sometimes through improving the clarity of public communication, and sometimes through improving procedures for staff or their understanding of them. The Commission is open to learning from ICR reviews and recommendations and, in this respect, obtains maximum value from the service.
Independent complaints review cannot be effective without organisational support from the top and I pay tribute to the Commission’s Board, led by its Chair Dame Suzi Leather, and to its Chief Executive, Andrew Hind, and his Executive Group for their commitment to the principles of independent review and for the constructive working relationship between us.
Over the years the ICR office has earned a reputation for fairness and impartiality. We have welcomed independent scrutiny of our service and were one of the first public offices in the UK to be awarded the BSI complaints management standard. As the reporting year closed, we were awarded the new BSI standard ISO 10002. Customer surveys show high levels of satisfaction with our process, even if people are sometimes disappointed with my decisions. The office has a culture dedicated to customer service, where people derive satisfaction from a worthwhile job, well done. My sincere thanks go to all the staff at the ICR office, those with us now and those that moved on during the year, for the diligence and professionalism with which they approach their work.
My report provides information about the ICR office and the work we have done this year. It also highlights some of the ways in which I have been able to add value for the Charity Commission and its complainants. I hope that readers find the report interesting and, as always, the ICR Office will welcome any and all comments.
Jodi Berg
Independent Complaints Reviewer
Seeking a fair resolution.
To provide a free service, which responds to complaint referrals made by individual members of the public or organisations in an objective and impartial way. To achieve a fair and proportionate settlement of complaints, making a positive difference for Charity Commission customers now and in the future.
The ICR reviews complaints that the Charity Commission has acted maladministratively.
Maladministration is a failure to deal with matters properly or fairly and may involve:
The ICR cannot review complaints about Charity Commission decisions, although she can consider complaints about the way in which they have been made. We expect the Commission to be given a chance to resolve matters before complaints are referred to the ICR. However, because memories fade and information is only kept for a certain time period, complaints should be referred within six months of receipt of the Commission’s final response to a complaint.
The Charity Commission publishes leaflets and quality standards against which its service can be judged. If someone is dissatisfied with the service they receive, they can complain initially to the person they are corresponding with at the Commission. If the response they receive does not resolve their complaint, they can make a formal complaint to a Customer Service Manager, who will look into their concerns and consider whether there have been any failings in service.
If a complainant is unhappy with the Customer Service Manager’s response, they can take matters a stage further by complaining to the Commission’s Head of Customer Service, who will try to settle the complaint. At either internal review stage, if appropriate, redress may be offered to the complainant. The Commission is required to signpost our service in its final response to a complaint.
The ICR’s leaflet Seeking a Fair Resolution, which has recently been updated,explains the role of the office and contains a complaint referral form. The leaflet is available from all Commission offices or direct from the ICR’s office. It is also available on our website: www.icrev.org.uk.
Our website also contains information about our work and copies of past and current annual reports.
Complainants can contact us by telephone, fax, e-mail, or in writing. We try to respond to people in ways that suit their needs and wishes.
When a complaint is referred to the ICR, we will want to know whether it is about an issue that falls within her remit. If it does not, or if it may do but has not yet been considered by the Charity Commission, we will assist the complainant to access the help they need to take matters forward. Sometimes we can provide immediate information or advice which will help to resolve matters.
“Thank you so much for your prompt, concise and clear reply to our questions. You have put our minds at rest greatly and we appreciate this very much.”
Complainants.
Once we have established that the complaint can be reviewed by the ICR, we will want to know what outcome the complainant is hoping to achieve and what action, if any, they would like the Commission to take to resolve matters. It is important to identify at this early stage whether we can achieve a helpful settlement for them, in light of their aspirations, in order to ensure that people do not expect more from an ICR review than can be delivered.
Initially, our enquiries are focused on discovering whether it will be possible to resolve the complaint by agreement between the person concerned and the Charity Commission. In cases where this appears possible, we try to negotiate a settlement. For example, this may be an agreement by the Commission to take certain steps, to provide information or an explanation, or to offer an apology if things have gone wrong.
In cases where resolution is not possible or appropriate, the summary of complaint issues we agree with the complainant sets the framework for our investigation. A copy of the summary is sent to the Commission, so that it can offer a response to the issues raised. Receipt of the summary by the Commission also triggers the dispatch of all relevant case files.
“I have reviewed the summary that you prepared, and I am impressed at the speed with which you produced the document and the thoroughness and accuracy that you have shown in analysing a large amount of detailed documentation to produce the summary.”
Complainant
We draw up a chronology of what occurred from all of the evidence received and the ICR then decides whether she has sufficient information from which to draw her conclusions and issue her report, or whether further enquiries (such as interviews with complainants or members of Commission staff) are required.
The ICR may make various recommendations within her reports. These may be specific and aimed at resolving an issue for the complainant, such as an apology from the Commission’s Chief Executive, or a consolatory payment in recognition of the anxiety and distress caused by its maladministration. They may also be ‘systemic’, aimed at improving Charity Commission procedures or communication for the future.
In cases where the ICR has made recommendations, the Charity Commission has undertaken to implement them. Only in exceptional circumstances will the Charity Commission refuse to act upon these recommendations and, in this event, it must provide a written explanation for its refusal. Commission senior officers consider all recommendations made by the ICR, and the Customer Service division oversees their implementation in the relevant business area.
Delay and Inaction
A dispute arose within a charity over the use of its recreation ground by a football club, which it was claimed was outside of the charity’s objects. The Council as sole trustee of the charity took seven years to evict the club. The complainant, Mr A, was dissatisfied with the way in which the Charity Commission responded to the concerns raised. The ICR found that the Commission had procrastinated and given the Council conflicting advice, which delayed resolution. Moreover, she noted that the Commission did not take action even when it agreed there had been a breach of trust.
Review recommendations
Responses
The ICR has associate corporate membership of the British and Irish Ombudsman Association (BIOA). We adhere to BIOA values of independence of judgment, fairness and impartiality, effectiveness and accountability. These are reflected in BIOA’s recently published Guide to the Principles of Good Complaint Handling, to which this office is fully committed. These Principles underpin our communication and procedures, and support the achievement of our Mission and Purpose. They are:
Clarity of purpose. A clear statement of the scheme’s role, intent and scope.
Accessibility. A service that is free, open and available to all who need it.
Flexibility. Procedures, which are responsive to the needs of individuals.
Openness and transparency. Public information, which demystifies our service.
Proportionality. Process and resolution that is appropriate to the complaint.
Efficiency. A service that strives to meet challenging standards of good administration.
Quality outcomes. Complaint resolution leading to positive change.
Additionally, the ICR office applies The Principles of Good Administration articulated in the Parliamentary and Health Service Ombudsman’s recent publication, both to our own process and to our consideration of complaints about the Charity Commission. They are:
Getting it right
Being customer focused
Being open and accountable
Acting fairly and proportionately
Putting things right
Seeking continuous improvement
We apply these challenging standards to all our work so that complainants and the Charity Commission can expect us to deal with all referrals in a professional manner. Our procedures and performance are subject to strict quality control.
We are committed to providing a first class service for everyone, regardless of their background or personal situation. We strive to make our public information easy to access and understand. All leaflets, correspondence and reports can be translated on request into languages in common use across England and Wales, and can also be provided in Braille and on audiotape.
Our website is reviewed regularly to ensure that it accords with the guidelines issued by the Web Accessibility Initiative (http://www.w3.org/WAI), which promotes the easy use of websites for all members of the public. This year we have updated the website to make it easier for people to submit application forms and information to us online.
All complainants are asked to complete an Equal Opportunities questionnaire, and our Diversity Officer collates responses in order to monitor trends and prompt improvements in accessibility. This questionnaire can also be completed and submitted online. Our Race Equality Scheme underpins our commitment to valuing diversity and can be viewed on our website.
The subject matter of many complaints touches upon personal and sensitive issues and this means that the ICR receives sensitive information from both complainants and the Charity Commission. We want people to feel confident about being frank and open with us, whether making or responding to a complaint referral. We always explain how we will deal with information to ensure that there are no misunderstandings.
As far as possible, we respect a complainant’s wishes and protect information that is sensitive in nature relating to their financial situation, their health or other personal facts that are not directly related to their complaint. However, we do need to exchange some information with the Charity Commission, such as the name of the complainant and what the complaint is about, in order to find out important facts about it.
We are able to see all of the relevant information held by the Charity Commission, including files and other data, and the ICR may refer to the information in her report to outline the background to a complaint and to give an explanation of her findings. Although we have the right of access to this information for the purposes of our investigation, we have no authority to release it to the complainant or any other third party. People requiring copies of information held on the Charity Commission’s files or systems must make a Freedom of Information or Data Access request direct to the Commission. If such a request is made and we are examining relevant material, we return it immediately to allow the Charity Commission to deal with the request. The evidence is returned to us as soon as possible so that our review can proceed.
We do not publish information about complainants or their case, other than in an anonymised form. We do not discuss individual cases with the media or any other third party, although we may refer to the kind of issues it brings to light, in order to encourage better understanding of the causes of complaints and how they can be avoided.
We comply with relevant legislation as far as ICR information is concerned and our Publication Scheme, which is available on our website, tells people what information is readily accessible.
“The report was extremely thorough and I am impressed with the manner in which the complaint has been handled”
Complainant.
We welcome suggestions and comments, whether positive or negative, and encourage this feedback by sending every complainant a quality questionnaire once the report has been issued. We also canvass a cross section of Charity Commission staff to find out whether they are aware of our service and what they think about it.
It is not unusual for people to challenge the ICR’s decisions and the ICR responds personally to issues raised, to clarify the reasons for her decisions. The ICR also has an internal complaints procedure for customers who are unhappy with the service they receive from us. We recognise that complaints make a valuable contribution to our understanding of what people want from our service and how we can improve it. Service complaints are rare and usually reflect dissatisfaction with the outcome of our review. Each complainant receives a written acknowledgement and explanation of our internal procedure within 24 hours, and a full response from the ICR within 5 days.
In cases where the ICR’s report has not resolved a complaint to the customer’s satisfaction, there is a further avenue of complaint available by asking an MP to refer the matter to the Parliamentary and Health Service Ombudsman. Every final report issued by the ICR advises the complainant about the Ombudsman’s Office.
During this year, the PHSO’s office changed its own complaint acceptance criteria, to include consideration of whether complaints raised by MPs (or their constituents) have been considered within appropriate internal and independent review procedures. As a result, we may receive complaint referrals via the PHSO, if issues raised about the Charity Commission have not been subject to previous ICR review.
British and Irish Ombudsman Association members look for opportunities to learn from the experience and expertise of colleagues in other ombudsman and independent complaint handling bodies and we share information with them about improvements to our own service. In this way, we aim to enhance our service for complainants, providing worthwhile outcomes for them and for organisations complained about.
You can find out more about BIOA and its members by visiting its website: www.bioa.org.uk. Our own website also has links to the sites of other complaint handling and ombudsman services.
Dismissing evidence
A dispute arose between two charities. Mrs B, the founder trustee of one charity, complained to the Charity Commission that the trustees of the other charity had misdirected funds specifically donated to her own. The Commission was satisfied that there were no governance concerns requiring its intervention and it therefore took no further action. Further complaints were then made about the charity, raising issues such as its failure to return loaned property to Mrs B’s charity. The Commission also received representations from a local councillor and an MP and were made aware of an ongoing police investigation. Despite a fresh examination of the matter, the Commission decided not to open a formal inquiry. It later conducted a review of this decision, which was upheld.
Mrs B complained to the ICR that the Commission had ignored evidence without adequate explanation, and had misrepresented and demeaned her complaint. She also said that the Commission had breached confidence by revealing that there was an ongoing police investigation to the trustees of the charity being investigated.
The ICR did not uphold any of the complaints. She found that the Commission had been thorough in its consideration of the matter and had acted according to its guidelines. Moreover, it had given the complainant clear explanations of its actions at every stage. She noted that the Commission had no specific guidelines about releasing information about an investigation by another agency, such as the police.
Review recommendation
Response
As Independent Complaints Reviewer, I take an ongoing interest in what is happening both within the Charity Commission and within the charitable sector as a whole, as this is often reflected in issues raised with my office. The reporting year saw significant developments, not least of which was the enactment of the long awaited Charities Act, which became law in November 2006. Since then the Charity Commission has led the debate on the interpretation of public benefit and has continued its internal preparations for the forthcoming establishment of the Charity Tribunal.
The review of many areas of practice and procedure has sat alongside the Commission’s major structural re-organisation, which began with a strategic review in 2005. Changes have been far-reaching and customer focused, not an easy task given the ongoing challenge of reducing the Commission’s overall workforce to meet Government targets.
The Commission is also at the centre of reinvigorated public interest in charities. The new Act has created a climate for challenging preconceived ideas about the place of charities in our national life, the work that they do and their role in shaping the future political landscape. I will reflect on some of these interesting themes in this part of my report.
The Charity Commission deals with a high volume of daily enquiries. The introduction of Charity Commission Direct and the Right Now web enquiry system means that simple queries can now be dealt with quickly and effectively. In addition, the Contact Centre has extended its opening hours and last year dealt with 185,000 calls.
These developments released staff to deal with more complex work and to engage with larger charities. New arrangements integrate resources and expertise, so that a more tailored service can be provided. Change of this magnitude rarely takes place without teething problems, and delays experienced in the early part of the year in some areas of the Commission’s service may well reflect this. Although no specific complaints have been referred to the ICR about this, it is a feature we are noticing in more recent referrals.
Other customer service initiatives include online services and simplified accounting requirements. The Simplification Plan, published in December 2006, aims to reduce the administrative burden on charities by 25% by 2010, in line with the new Charities Act provisions and the focus on proportionate regulation.
The Commission has also taken a look at the formulation and presentation of its Inquiry reports to improve the process, the speed of publication and their written style, to provide public reassurance that the right approach is being taken. The Commission’s general written communication style is also being reviewed, through the Stop, Think, Write project, which will culminate in new guidance and training for all operational staff.
During the reporting year, I was pleased to be consulted by the Commission on several proposed service and guidance initiatives, some of which responded to earlier ICR report recommendations. As I write this report, the Commission is continuing its broad review of internal complaint handling, and I welcome the serious approach to this task. I am optimistic that this will lead to improved understanding and consistency.
This year the Charity Commission carried out a number of stakeholder surveys and reviews itself, and responded to several others. These looked into key issues for the sector, such as the role of charities in the delivery of public services and the place of political campaigning. It continues to widen its Customer Network to represent the diversity of the sector.
Last year the Commission continued to improve its understanding of, and connection with, minority and faith charities, through a series of meetings held across the country with over 800 organisations from 11 faiths. As the year came to a close, the Secretary of State for Communities and Local Government announced funding of £600,000 for two years, which will enable the Commission to establish a Faith and Social Cohesion Unit to lead its work in this important area.
Although many of these charities are relatively small, they are disproportionately represented within referrals to me. In many cases, internal disputes within the charity have spilled over into an attempt by those on one side of the argument, or both, to enlist the assistance of the Charity Commission to settle matters in their favour. Given the limitations of the Commission’s remit and its proportionate regulatory approach, people can be disappointed with the response they receive and dissatisfied with the answer to their complaint about this. My review of such cases can provide an insight into how these situations could be handled better.
Internal Dispute and Regulatory stance
A dispute arose within a faith charity over its leadership. The charity was part of an international group and arguments between the international and national leadership resulted in a change of its governance arrangements and Mr C’s dismissal from the management board. He complained that the Charity Commission did not act to prevent what he viewed as a breach of the charity’s rules. He also complained that the Commission had shown bias in favour of those on the other side of the dispute and allowed them to harass him and others.
The ICR noted that the allegation of bias initially arose from a letter the Commission sent offering general advice about the leadership situation, which Mr C’s opponents then used as official confirmation of their status. The ICR found no objective evidence of bias, although the Commission was unwise to comment on a confused and contentious legal situation, before it was aware of all the facts. However, the officer had suggested independent legal advice and explained the limits of the Commission’s role.
The ICR found that considerable time and resource went into the attempt to assist the charity to find a solution to its problems. The Commission continued its involvement in this long-running case, despite advising on many occasions that it could not get involved in the dispute, and recommending mediation.
The ICR commented that it is important for the Commission to avoid stepping in to an internal dispute within a charity unnecessarily, because once it has done so there is a perception that responsibility for settlement of the dispute is lifted from the trustees, and taken on by the Charity Commission. Invariably it is then difficult for the Charity Commission to extricate itself from involvement. It is also more difficult for the Commission to retain the confidence of both sides. Inevitably, the disappointed 'group' will feel that it has been treated unfairly.
The ICR noted the importance of ensuring that the potential consequences of Charity Commission involvement in settling a dispute are properly understood by those involved, as this might not achieve a satisfactory outcome for all parties. She noted that this is a serious step to be taken only when other conciliation methods have failed.
Review recommendation
Response
“I would like to reiterate that the Commission welcomes your recommendation. It comes at a timely moment when the Commission is reviewing its procedures on disputes.”
Charity Commission Chief Executive.
Although most complaints within faith charities relate to people’s disappointment with the Commission’s opinion or action in relation to internal disputes, others also concern customer service issues.
Failure of communication
A dispute arose within a faith charity, with which the Commission became involved. Mr D complained that the Commission changed its case officer without prior discussion and failed to give reasons for this. He said that this altered the direction of the Commission’s approach to the concerns he had raised.
The ICR noted that the Commission is not required to consult customers about staff changes, which occur in the normal course of business. However, she commented that it is good customer service to let people know when a new officer has taken over the care of a long-running case. This is particularly important when dealing with a dispute within a charity, when people need to be confident that those on the ‘other side’ are not getting preferential treatment. The ICR criticised the failure to inform relevant parties of the change in case officer. However, she acknowledged that the Head of Customer Service had apologised for this in responding to the complaint, which she considered appropriate redress in the circumstances. She also noted that the issue had been taken forward within the Commission, to ensure that this situation did not recur.
The ICR found that there had been a change in approach to the dispute, but this was based on new legal advice that the Commission’s earlier view had been incorrect. Although the Commission had considered offering an apology, it decided not to do so at the time as negotiations were at a sensitive stage. However, the perception that the new case officer simply decided to change case direction without reason resulted in a complaint being made about that officer. The ICR commented that this would not have happened if the Commission had admitted its mistake as soon as it came to light.
The report highlighted that case decisions or actions taken by case officers are not personal, but are made on behalf of the Commission, based on professional judgement and appropriate advice. In this case, the ICR was satisfied that the case officer was familiar with the case issues before hand-over, and took advice before making decisions about next steps. The ICR did not uphold the complaint.
Review recommendation
Response
Charities have a growing role in the provision of public services, and there is a clear appetite for more. This year the Charity Commission published the first all-charity survey of charities delivering public services, Stand and Deliver: the future for charities delivering public services, alongside new guidance. This highlighted that amongst respondents to the survey, more than 60% of medium sized and large charities are engaged in this work and many receive most of their income from this source. Subsequent debate has centred on the implications of involvement in services traditionally carried out by public bodies for the mission, assets, reputation, and independence of charities. The welcome Public Administration Select Committee Inquiry into Commissioning Public Services from the Third Sector will consider all of these issues.
Announcing the survey results at the NCVO Conference in February, the Commission’s Chair, Dame Suzi Leather, pointed to current and potential challenges for charities engaged in public service delivery. She also said: “Lines of accountability and redress must not be ignored. With almost 40% of charities delivering services lacking any complaints procedure, and with some authorities arguing that they are not responsible for services they contract to charities, there is a risk that vulnerable users could be left to fall between the cracks.”
I wholly endorse these sentiments. The disadvange to the citizen of receiving a service from a charity that he or she cannot complain about to any person or organisation outside of the charity itself, is an issue which I have commented on in previous annual reports. There is an inherent unfairness in this situation, which is particularly marked when similar services, delivered by partners in public bodies, are subject to investigation by the Parliamentary and Health Service Ombudsman or the Local Government Ombudsman. I expressed this view in my own written evidence to the Select Committee, and urged members to take an active interest in the public accountability gap between charities and those public bodies that commission their services.
The whole area of complaints and citizen redress is one that is widely misunderstood and undervalued within the sector. The Charity Commission’s sector survey ‘Cause for Complaint’, demonstrated that this is a highly neglected area, and one which culturally does not sit well with many charities, which mistake the protection of citizen rights with what they see as an increasing regulatory burden. In my view, this cultural difference between the not for profit and the public sector has to be addressed if charities are to continue their involvement in public service delivery with the full confidence of the public.
Meanwhile, much of my casework continues to reflect people’s complaints about charities and their subsequent dissatisfaction with the Charity Commission’s response to these issues.
Mr E, a tenant of a property managed by a charity, complained that the Commission failed to act on concerns he raised about his landlord, which he felt required active intervention by the staff involved. He was disappointed with the Commission’s response and considered that this amounted to a failure to fulfil its statutory duty as the regulator of charities.
The ICR noted that her remit did not extend to investigating Mr E’s concerns about the charity itself, or to giving a view on whether or not more rigorous action was required on the Commission’s part. However, she found that the Commission did not ignore the matters brought to its attention. It had identified and raised concerns with the trustees which fell within its remit, in particular in relation to the charity’s financial record keeping, and had given the trustees advice about improving its procedures. The Commission also reminded the trustees of their responsibility to deal with complaints raised by tenants.
The ICR concluded that the Commission had provided a detailed response to Mr E’s complaint and had clearly explained its role by stating: ‘the Commission is not in a position to seek settlement between a third party and a charity or to intervene between an individual or individuals’.
Whilst the ICR appreciated that Mr E wanted the Commission to adopt a robust approach, she felt that the Commission had explained why it could not become involved in the dispute between tenant and landlord. That said, the ICR also added that it may have been helpful to suggest that Mr E should seek legal advice about potential court proceedings, or seek help from the Housing Ombudsman Scheme. The ICR found no objective evidence of maladministration and did not uphold the complaint.
The area of political campaigning has always been a difficult regulatory issue for the Charity Commission, and recent months have seen much public debate about whether or not the regulatory ‘rules’ remain appropriate in today’s world. However, as things stand, the Commission has a duty to regulate in line with legislative requirements. The question of whether guidelines have been breached is not an easy one to decide in many cases. What amounts to unacceptable political campaigning in one person’s book, is often simply stating an obvious truth for another. Referrals to me have reflected this dichotomy a number of times.
Campaigning issues
A member of the public brought the Charity Commission’s attention to what he asserted was ‘blatantly partisan’ campaign literature published by a charity involved in raising funds for humanitarian aid for refugees. He asserted that the literature did not present a balanced picture of the cause of the situation, and that it amounted to the pursuit of a political objective. He complained that the Commission evaded responding to the specific points he raised about the nature of the publicity material, and that the response to his complaint had continued this approach and had failed to deal with the matters raised within his ‘appeal’. Overall, Mr F said that the Commission failed to give proper consideration to his letters and phone calls.
The ICR noted that Charity Commission guidance stated: “Organisations established for exclusively charitable purposes may carry out campaigning and political activities, provided that the activities pursued are a legitimate means of furthering those purposes.” In this case, the Commission accepted that the leaflet concerned put forward a particular view about the underlying cause of problems faced by refugees. However, the Commission had to consider whether the language employed contravened its guidance. It was a matter of judgement whether the main purpose of the leaflet was to disseminate a political viewpoint or to attract donations to be used to help alleviate the problems faced by the refugee population.
The ICR was satisfied that the Commission was consistent in its advice to Mr F about its view of the charity’s activities and found that this could not be construed as being evasive. She accepted that the Commission did not challenge the charity itself about the position adopted in the campaign leaflet, however it had sight of the responses the charity had offered Mr F. She found that the decision about whether regulatory intervention was required, which fell within the discretionary authority of the Commission, was exercised in line with practice and procedure. However, the ICR was critical that, initially, the Commission had not responded to Mr F’s direct question about whether a charity can have blatantly partisan campaign literature and still be within its guidelines.
Mr F was not satisfied that the ICR’s report addressed his serious concerns and his MP referred his complaint to the Parliamentary and Health Service Ombudsman, who reported on it in November 2006. The Ombudsman also criticised the failure to directly address the question put by Mr F. The report commented upon confusion noted in the Commission’s response to the issue and welcomed the fact that the ICR’s report had led to a review of practice. It also welcomed the robustness of the ICR’s correspondence with the Commission on these issues.
Response
In cases I have seen, the Commission’s refusal to take regulatory action is seen as tacit endorsement of political views expressed by a charity and I have stressed to the Commission the importance of ensuring that people understand how it goes about the task of evaluating whether guidelines have been breached. In response, new guidance has been issued which sets out the legal position and the Commission’s regulatory approach.
Opinions differ on whether political campaigning is, in itself, a legitimate function of charity. The publication recently of a report by the Advisory Group on Campaigning has added to this debate. In a recent article, the Group’s Chair, Baroness Helena Kennedy QC, felt that the Commission’s new guidance did not reassure charities, because the rule that their main purpose cannot be political still applies. She commented: “Because there’s such a fuzzy sense of what charities are allowed to do in terms of campaigning, it’s acting as an inhibitor on people’s engagement, which isn’t healthy for a democracy.”
It seems to me that it is not easy to define what amounts to an unacceptable degree of political campaigning on the part of a charity. In these circumstances, the Commission’s guidance is a helpful attempt to tread a proportionate path, whilst recognising its statutory duty.
The question of whether there is a need for any regulation at all is one that sits outside of current process and requires further consideration. Many would consider that it is a fundamental purpose of charities to be engaged in raising awareness about issues of local or national concern, and pressing for change. However, not everyone would agree that overtly political parties and factions should be able to register charities for the specific purpose of shaping public opinion. Referrals to my office demonstrate that this is an increasingly complex area of law, and one on which opinion is clearly divided.
Currently, the 190,000 registered charities have a wide range of objects but all must have charitable ‘purposes’ if they are to attract the considerable reputational and financial rewards of charitable status. The Charities Act 2006 explicitly includes public benefit in the definition of a charitable purpose, thereby creating a symbiotic relationship between public benefit and benefit for the organisation.
The new Act offers the Charity Commission an opportunity to engage with the sector at the start of an exploration of how public benefit can be demonstrated and how the Commission should exercise its statutory responsibilities in this area. The wide consultation undertaken by the Commission will help to ensure that its guidance meets the needs and expectations of charities, within the bounds of the legislation.
The Act has also concentrated the Commission’s efforts on changing its decision review procedure in preparation for the introduction of the Charities Tribunal, planned for early 2008. The Tribunal will provide an opportunity to challenge Commission statutory decisions within an independent and judicial forum, thus providing an answer for many complainants to my office who wish to do so within the ICR process. However, it will also create a challenge for my office to ensure that people are able to raise holistic complaints about decisions, as well as process, and receive a timely and adequate response to both. I am grateful to be included amongst those whose opinions are canvassed in the establishment of the Tribunal and I look forward to forging a constructive relationship with judicial and administrative colleagues.
“Mrs Berg’s report is the first indication we have had that there has been any understanding of the incredible frustration the matter has caused.”
Complainant
“ In the short time since my appointment, it has become clear to me that members of the public assume that the Charity Commission is able to sort out almost any problem connected with the charitable sector. This can be an unrealistic expectation, as it is not the Commission’s role to become involved in every problem or dispute that arises between individuals and charities. As a consequence, people can quite easily be surprised by the Commission’s response or disappointed with the way in which the Commission has acted”. ICR Annual Report 2000-01
An enduring theme of referrals to the ICR is the lack of action by the Charity Commission when the complainant believes there is abundant evidence of malpractice and malfeasance within a charity. Concerns that are serious to a complainant do not always match the Commission’s guidelines and, in recent times, this difference has become more marked as a consequence of the Commission’s risk-based and proportionate regulatory approach.
Charity misconduct
Mr G complained that the Commission did not take regulatory action against the charity despite being given evidence of misconduct. The ICR explained that she was unable to look into alleged misconduct at the charity.
In reviewing the way that the Commission responded to the allegations raised by Mr G, it was clear that the Commission did not agree that there was sufficient cause to invoke its formal regulatory powers. The Commission’s assessment was that issues raised related to the charity’s day-to-day administration in which it could not interfere. The ICR found that the Commission explained its position to Mr G at an early stage, and did not deviate from this throughout its correspondence with him. Furthermore, the Commission had provided detailed answers where it was able to do so. The ICR was satisfied that the Commission reached its decision not to take regulatory action in a reasoned way and in accordance with its policy and procedure. The ICR did not uphold the complaint.
However, there are always occasions when the Commission has stepped in to investigate matters, to the obvious dissatisfaction of an individual caught up in an Inquiry.
Inquiry issues
The Charity Commission was notified that the trustees of a charity had apparently relinquished control of the charity’s assets to an advisor, Mr H. The Commission immediately opened an evaluation, and, after receiving further information, opened an Inquiry under Section 8 of the Charities Act 1993, and froze the charity’s bank accounts.
The advisor complained about the conduct of the Inquiry. He stated that he had not been contacted to respond to serious allegations against him, and was not told the nature of the allegations.
The ICR pointed out that the concerns of the Commission had properly related to the governance of the charity and its potential beneficiaries. The advisor was not the focus of the Inquiry, which was centred on the actions of the trustees and the future well-being of the organisation. The Commission had a duty to take into account the serious nature of the allegations, which brought into question the governance and financial controls of the charity. The Commission’s decision to raise the matter with trustees and to freeze the charity’s bank account was wholly within its remit.
The ICR noted that the complainant was aware of the Inquiry and could have made representations to the Commission as it progressed. However, he had not done so, and the Commission was not under an obligation to seek his views. The ICR was satisfied that the Commission allowed the complainant to voice his concerns and entertained his representations about the draft Inquiry Report. She noted that the final version of the report did not personally implicate him in misconduct.
Mr H also complained that once the Inquiry was concluded, a significant time elapsed before he was informed of its outcome, even though it was clear that the findings were critical of him. The ICR accepted that this was the case. She asked the Commission to acknowledge the need to inform concerned individuals about the outcome of an Inquiry in a timely way.
Response
I am pleased to note that the Commission is conducting a review into the way it responds to whistleblowers and other complainants, in addition to its work on redefining the nature of its engagement with disputes within charities. It is particularly important to get this right at first contact, as well as at disengagement, if people are to accept that actions taken between these two points have been appropriate.
From time to time new complaint issues are raised with me about areas of Commission service with which I am not familiar. In these cases, my first step is to consider relevant legislation and staff guidance, against which I can assess the Commission’s performance. In some instances, the lack of staff guidance appears to have led to inconsistency in the approach adopted by different case officers.
Engagement with a charity commenced several years ago when it contacted the Commission to explain that it was going to use a professional fundraiser and wanted assurance that it was operating within the Commission’s guidelines. The Commission responded by setting out the regulations on fundraising, as stated in the Charities Act 1992, and giving general guidance about agreements with professional fundraisers. The Commission confirmed that the proposed agreement seemed acceptable, although it was stressed that the trustees had a duty to ensure the charity got best value for money.
The Charity Commission later became aware of concerns about the techniques employed by the fundraiser. The charity was informed about the evaluation and expressed its willingness to co-operate. Concerns later emerged relating to the contractual arrangements for the share of proceeds, which the Commission considered to be weighted too heavily in favour of the fundraiser. It then opened a Section 8 Inquiry of the Charities Act 1993 to investigate the matter.
The trustees complained to the ICR that it was inappropriate for the Commission to open an Inquiry, which would have been unnecessary if the evaluation and subsequent monitoring had been conducted properly. The ICR found that the first evaluation was carried out appropriately, but case handling deteriorated after this. The Commission had not raised all its concerns with the charity in a straightforward manner, nor allowed the trustees a suitable opportunity to address its main concern about the low fundraising return for the charity, before it opened an Inquiry. This was inconsistent with its general proportionate approach, given the co-operation the trustees had shown throughout the evaluation and monitoring stages. The ICR upheld the complaint. She noted that there was no specific staff guidance relating to the issue of fundraising share.
Finally, the ICR upheld the trustees’ complaint that there was an excessive delay before the Commission issued the Inquiry report.It had taken over a year to do so, due to an unexplained ‘administrative oversight’. The ICR concluded that the production of the report was simply overlooked. The ICR noted that the Commission had apologised to the trustees for the shortfalls in the standard of service that they received. Nevertheless, her report identified further service failures.
Review recommendation
Response
Another issue which continues to feature in referrals to my office is the way that the Commission responds to internal disputes within a charity. In my experience, trustees on either or both sides of a dispute can ask the Commission to step in too early, before any real attempt has been made to settle matters in other ways, for example through use of mediation. Charity Commission involvement is a last step rather than a first, and the outcome is unlikely to please everyone.
Legally, all trustees are equal and, accordingly, all are responsible for enabling the governing body to carry out its important function. However, in most organisations, particularly those within the public sector, this responsibility falls most heavily on the trustees’ Chair, who is the first amongst equals.
The Chair’s role is to ensure sound governance and the smooth running of the charity for the benefit of its beneficiaries. They do this by virtue of their leadership skills, which should mean that they treat and represent all of their trustee colleagues equally, and lead them in being the public face of the organisation. Being a Chair of a charity is a privilege that carries a status within the charity itself, and resulting standing in the community.
In some cases referred to me, the Commission’s correspondence and contact with a number of trustees has itself proved detrimental to dispute settlement, as the different parties vie to achieve its approval for their cause. In these circumstances, recognition of the role of the Chair in the settlement of any concerns or disputes affecting the governing body, could lead to a more focused approach.
It is important to acknowledge that referrals to me are not representative of the major part of the Commission’s work, which is delivered to the satisfaction of charities and those interested in them. The Commission’s staff are highly trained and professional and make a positive difference for the charities and the public they serve.
“Our clients fully appreciate the hard work that you and your colleagues undertook at an unprecedented level to ensure that some settlement could be achieved by way of mediation, thus saving the charity a lot of money and time which volunteers give to run its activities.”
Compliment to Charity Commission staff
During the year the Charity Commission’s Customer Services team dealt with 49 Stage 1, and 20 Stage 2 reviews. Of the 147 issues complained about in 2006-07, 9 were upheld and 19 partially upheld.
Encouragingly there were considerably more (unsolicited) compliments received this year than last, reflecting people’s satisfaction with the service they receive. Recording compliments allows all Commission staff to recognise that the work they do is appreciated. The prospective launch of the Commission’s Customers Count initiative, will try to raise the profile of excellent customer service, starting at the operational front-line.
The ICR received 41 complaint referrals in the reporting year and completed 15 reviews. We investigated 60 allegations of maladministration, covering a wide range of issues. As always, the main issues raised by complainants related to how the Commission exercised its regulatory authority.
Comparison with the previous year reveals a welcome reduction in complaints about communication and practice, perhaps demonstrating the Commission’s renewed focus on the way it engages with respondents.
|
Issues reviewed by the ICR detailed by category |
2006-2007 |
2005-2006 |
|
Advice |
2 |
4 |
|
Bias |
7 |
3 |
|
Communication |
6 |
12 |
|
Complaints Handling |
7 |
10 |
|
Cost |
0 |
2 |
|
Delay |
5 |
9 |
|
Discourtesy |
2 |
3 |
|
Discrimination |
1 |
2 |
|
Mistakes |
1 |
1 |
|
Other |
0 |
11 |
|
Practice and Procedure |
21 |
43 |
|
Responsiveness |
8 |
4 |
|
Total number of issues reviewed |
60 |
104 |
During the year we also considered 32 approaches where a review was not necessary or appropriate. These cases ranged from customers that had come to us with a complaint too early, because they had not yet received the Commission’s final response, to customers that came to us too late, well over six months from receipt of this response. In addition, a number of people contacted us to complain about charities – as opposed to the Charity Commission – and we advised them how to take matters forward.
We set challenging speed of service targets. We audit our performance and try to learn from failures to meet deadlines. Although we try to act as quickly as possible, some investigations can take a long time, depending on the issues raised and the amount of information to be considered.
|
Aspect of service |
Target |
|
Telephone calls |
1 day |
|
Acknowledgement |
1 week |
|
General correspondence |
3 days |
|
Complete review |
36 weeks |
This year, overall we exceeded our case completion target and our average case completion was 40 weeks. This is regrettable and was the result both of staff changes and absences, coupled with the highly complex and contentious nature of a number of cases, in which investigations were carried out in the public spotlight. There were also some cases where the review process had to be interrupted, for example where a complainant had made an FOI request to the Charity Commission.
Whilst we recognise that unnecessary delay adds further inconvenience and stress for a complainant, our experience is that a thorough approach is of paramount concern to most people. However, understandably not everyone takes this view and we have taken steps to ensure that we meet our completion target this year.
“A thorough and carefully considered review, but the length of time taken was unacceptable.”
Complainant
During the reporting year, across our work for all 7 public bodies, we received only four complaints about our service. Two of these were from Charity Commission customers. The first was an allegation of discourtesy received from someone whose complaint had not yet been accepted for review. The second alleged delay in completing our review, although in this particular case we had done so within our published target. Following investigation, neither was upheld. However, we identified two learning points regarding the frequency of updating complainants about any delay, and the clarity of arrangements for covering staff leave and unplanned absence.
The Parliamentary and Health Service Ombudsman responded to 1 complaint referral from a Charity Commission complainant who had previously received an ICR report. The Ombudsman found no cause to criticise the ICR investigation. Further details about this case can be found earlier in this report (see Political Campaigning)
|
Details of Costs |
2006-07 |
2005-06 |
|
Total cost of the ICR service to the Commission, including the ICR’s fee, staff salary and contribution to the office running costs |
£72,432 |
£73,960 |
In response to the ICR’s survey of a cross-section of Commission staff, we are pleased to record that this year 100% of respondents knew about the ICR’s role and 80% of these felt able to advise customers about our service. Nearly everyone understood that the ICR is independent of the Charity Commission.
Everyone who had seen our leaflet Seeking a Fair Resolution felt that it was helpful and easy to understand but less than 50% of respondents had seen last year’s Annual Report. We will try to provide wider access to the Report this year.
ICR visits to Charity Commission Offices were welcomed by 85% of respondents, who felt that they were helpful in raising awareness about her office. The ICR will continue her visits to Commission offices this year.
The Charity Commission is the independent regulator for charitable activity in England and Wales. It promotes public trust and confidence in charities by:
The Commission employs approximately 490 staff in London, Taunton, Liverpool and Newport.
Charities range from small groups meeting local needs, to large national and international organisations providing services to millions of people. An essential requirement of charities is that they are accountable, independent and operate for the public good. At the end of March 2007, there were 190,000 charities on the Register with a combined income of £42 billion.
Many charities are very small organisations and the financial wealth of registered charities, measured by their annual income, is concentrated in a few very large charities. This is demonstrated in the following figures:
More information about the Charity Commission together with a range of guidance for charities can be found on its website, or by contacting Charity Commission Direct:
Telephone: 0845 300 0218
Typetalk: 0845 300 0219
By Post:
Charity Commission Direct
PO Box 1227
Liverpool
L69 3UG