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 ...Red Tape

Many of the proposals, including those on company law, employment regulations and health and safety, should touch at least some charities, and two of the plans – by the Charity Commission and the Cabinet Office – are focused on the third sector. These two alone promise savings to the sector of about £20 million a year.

Introducing the plans, Cabinet Minister Pat McFadden admitted that some would feel they had heard it all before, but promised the proposals constituted “not a new pledge but a detailed and specific plan of action”.

That is, in fact, true: much of it is not new. While the initiatives are welcome, many of them have been heard before – a good chunk of both plans detail savings from measures either already announced or in place.

Most of the £14.3 million savings identified in the Commission’s plan relate to changes to accounting and reporting, and almost £4 million to measures resulting from the 2006 Act or measures already in place. While the greatest impact is likely to come from a future review of financial reporting thresholds, this again was a commitment written into the Act. About half the savings to the sector identified in the Cabinet Office plan can be put down to the Charities Act.

This needn’t necessarily bother charities. The Commission says it’s legitimate to include these measures because the calculation of the total regulatory burden it puts on the sector was taken in May 2005, pre-dating the Act. And, according to the Commission’s chief executive Andrew Hind, charities are likely to be more concerned with the impact the changes have than their origin. For instance, one proposal, to increase the threshold for submitting an annual return from £10,000 to £25,000, would save 22,500 smaller charities a total of £3.4 million a year. Meanwhile, the threshold for independent examination for charities’ accounts could be raised from £10,000 to £25,000, saving another £1.2 million a year for 37,350 charities.

Similarly, the government’s response to the report of the Better Regulation Task Force has also been generally well received. Most of the report’s recommendations have been accepted, and work has already begun in some areas. The Charity Commission, for instance, is being more careful to distinguish between regulatory requirements and best practice in its guidance, while the Home Office funded Volunteering England to produce its guide to volunteers and the law and hold workshops on the topic throughout the country last year.

Meanwhile, the creation of the Office of the Third Sector in the Cabinet Office has helped give the sector a central voice in the department that’s leading on the drive for better regulation. Ω