Charity regulation needs a radical 'rebalancing' to make it appropriate to the demands of the present day, according to a report published yesterday by chief executives body ACEVO.

Public Impact Centred Regulation for Charities, produced by ACEVO's Taskforce on Better Regulation, calls for regulation to be founded on enterprise, professionalism and increasing charity transparency and accountability.

The report claims that regulation of charities is too top-down and that much regulation is duplicated.

The taskforce, led by Rupert Evenett, chair of volunteering charity BTCV, calls on the Charity Commission to encourage in its guidance new ways of providing capital investment so that third sector organisations can become less risk-averse.

It also calls for more peer review among charities rather than governance from above, a commission to identify unnecessary regulation and the removal of the new 'fit and proper persons' test, which gives HM Revenue & Customs power to remove tax breaks from charities if it does not approve of their trustees or senior employees. It recommends more research into how charities can measure the impact of their work, a standardised method for reporting this and regulatory data being made available in a searchable data form.

"Consideration of charity regulation has been constrained by excessive attention directed at the micro level and, at times, a sense of ownership by certain bodies in the sector," the report says. There needs to be a change in the way that regulation is viewed and for the reasons for regulation to be reconsidered, it says. "This means a rebalancing of regulation from form to substance and from detailed prescription to effective pluralism," it says.

Source: David Ainsworth, Third Sector Online, 17 June 2010