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Office of the Scottish Charity Regulator
Corporate Plan 2004-2006
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The Office of the Scottish Charity Regulator (OSCR) is a Scottish Executive Agency and the new regulator of charities in Scotland.
OSCR aims to
Develop a regulatory framework in which the public have confidence and in which charities can grow and flourish, clear in the knowledge of their rights and responsibilities; and
Manage the transition of the organisation from an Executive Agency to a statutory public body following the enactment of the proposed charity legislation.
Further information about OSCR’s activities is available from:
OSCR Argyll House Marketgait Dundee DD1 1QP
Tel: 01382 220 446 Fax: 01382 220 314 www.oscr.org.uk
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Contents
Page
1. Foreword by the Chief Executive 5
2. Introduction to the Plan 7
3. OSCR’s role and powers 8
4. The developing strategic context 9
5. OSCR’s vision and contribution
Vision
Remit
Objectives
Values
12
6. Turning our vision into action
Impact and service
Internal management
14
7. Judging progress and performance 18
Annex 1 Meeting wider objectives
Annex 2 OSCR’s budget
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Glossary of Acronyms
OSCR – The Office of the Scottish Charity Regulator
ECC – English Charity Commission
e-Gif - e- government Information Framework
FSA – Financial Services Authority
ICAS – Institute of Chartered Accountants in Scotland
SCO – Scottish Charities Office
SCVO – Scottish Council for Voluntary Organisations
SORP – Statement of Recommended Practice
OSCR2 – Statutory successor to OSCR
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Foreword by the Chief Executive
The Office of the Scottish Charity Regulator (OSCR) is a Scottish Executive Agency and the new regulator of charities in Scotland. The organisation was formally launched on 16 December 2003.
Charities are an important part of the social fabric of Scotland. There are currently more than 20,000 charities in Scotland. SCVO estimates indicate that charities employ more than 50,000 fulltime staff and are supported by more than 700,000 volunteers.
OSCR has a crucial role to play in the evolution of charities, enabling them to meet modern expectations and obligations. It is essential that we enable charities to operate in a climate of trust and respect by providing firm and fair regulation in which the public can have confidence. OSCR therefore aims to develop a regulatory framework which is not only about intervention and high profile court cases, but which over the longer term establishes standards and promotes good practice across the sector.
OSCR is a relatively small organisation but is designed to deliver real impact over the next 2 years. Since our inception in December 2003 we have press launched OSCR, set up our web-site, begun populating our staff structure and taken the initial steps in developing the sound management arrangements we see as crucial to our successful working. This includes developing OSCR systems including our records management and publications schedule in light of Freedom of Information requirements.
More operationally, we have published the updated Inland Revenue list of active charities. At the same time OSCR staff continue the investigation role of the former Scottish Charities Office (which is now absorbed within OSCR)
The Scottish Executive intends to publish a draft Charity (Scotland) Bill for consultation in the spring of 2004. The Minister for Communities has made it clear that in the new legislation OSCR will transfer from an Executive Agency into an independent statutory organisation, with an enhanced range of powers. An important element of OSCR’s remit is managing the transition to the new statutory organisation, including contributing to the development of legislation.
Because OSCR is working to a unique timescale, we could not await the outcome of a formal consultation process on the Corporate Plan before resolving key priorities and taking operational decisions. We have therefore had brief informal discussions with key stakeholders but not a full formal consultation before obtaining Ministerial approval and publishing this Corporate Plan, We will be able to adopt more conventional planning and consultation cycles for the future and OSCR will be active in consultation, feedback and involvement of all our stakeholders. There will be numerous occasions for different voices and views to be heard, and we will be publishing details of various working groups and programmes and providing regular updates of progress.
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The next 2 years will see a sea change in regulation of charities in Scotland. Not only the Scottish Executive but the charitable sector is rising to the challenge of meeting new expectations and new responsibilities in post devolution Scotland. The publication of this Corporate Plan makes clear the part which OSCR will play in the process of developing regulation which meets the key aspirations and expectations of the public and at the same time creates an environment in which charities can grow and flourish, clear in the knowledge of their rights and responsibilities.
Jane Ryder
Chief Executive, March 2004
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Introduction to the PlanThis Corporate Plan sets out what we intend to do over the period 2004-2006.
At this stage, it is envisaged that OSCR will make a transition from an Executive Agency to a statutory body no later than April 2006. We refer to this as the transition from OSCR1 to OSCR2. The work undertaken by OSCR1 between now and 2006 will underpin the medium to long term success of OSCR2 in delivering the vision for charities in Scotland set out later in the Plan. This is illustrated in the diagram below.
The pages that follow set out:
Our role
The developing context within which we are operating
Our vision, aims, objectives and values
The practical steps we are taking to turn this vision into action
The measures we will use to assess progress and performance.
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OSCR’s vision
OSCR’s establishment
December2003
March2006
OSCR1 OSCR2
OSCR1Corporate and
Operational Plans
OSCR’s role OSCR is an Executive Agency under the terms of the Scotland Act 1998 and is part of the Scottish Executive Development Department. As an Executive Agency, OSCR operates independently and impartially whilst remaining directly accountable to the Scottish Ministers for its performance and use of public funds. The Agency model enables OSCR to work independently of the Scottish Ministers in its day-to-day tasks but within Scottish Ministers’ strategy for Scottish charity law reform and regulation.
The Chief Executive of OSCR has the right of direct access to appropriate Ministers. The Chief Executive is responsible, within the terms of a Framework Document1, for OSCR's management, performance and future development.
OSCR’s primary role is to develop a regulatory framework, operating within the existing legislation. We will be developing a proactive monitoring programme, which will aim to balance the burden of compliance on charities with the need to secure meaningful information. This will enable us not only to take appropriate action in relation to individual charities but to provide guidance and work to improve standards overall.
OSCR has responsibility for the investigation of allegations of misconduct or mismanagement in the administration of charities in Scotland. If there are grounds for concern OSCR will take the matter up with those responsible for the conduct of the charity's affairs. In those cases where OSCR concludes that there has been misconduct or mismanagement in the administration of the charity, or that it is necessary to protect the charity's property and ensure that it is properly used, OSCR may bring court action.
Finally, an important part of OSCR’s remit is to manage the transition to OSCR 2. In doing so, we aim for a seamless transition, providing a continuity of direction and operations. What OSCR1 puts in place should provide a sound platform for OSCR2 in terms of strategic direction, principles, working culture and operations. An important part of the transition is providing effective input into the pre legislative consultation and parliamentary scrutiny of any Bill, to ensure that new functions, powers and obligations are appropriate and realistic.
OSCR will fulfil its function through ongoing formal and informal communications with its key stakeholders. These key stakeholders include the Scottish Executive, the Scottish Parliament, the Charity Commission, other regulatory bodies (such as the Inland Revenue), umbrella bodies (such as the SCVO and the Institute of Fundraising), the public, the media and charities themselves.
1 The Scottish Executive, Office of the Scottish Charity Regulator: Executive Agency Framework Agreement, December 2003
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Understanding the changing contextThere are a number of developments that inform and influence OSCR’s focus and operational working
Expectations of the sectorPublic and broader civil society expectations of charities are evolving. Charities are essential to the fabric of society and the commitment and sheer variety of charitable activity is a valuable aspect of life in Scotland today. However the scale of activity, the amounts of money involved and the emphasis on standards elsewhere have led to increasing expectations of charities. These expectations extend to good governance, financial probity, sound management, employment and ethical concerns for staff and volunteers and of course effectiveness and impact. A modern regulatory framework will take account of all of the aspects, and over the longer term will focus on raising standards and competence as well as on investigation and intervention in individual cases.
There is a legitimate concern lest the burden of compliance fall unfairly on the majority of charities who are well managed and of the utmost probity. But it is essential that charities are seen to be transparent, and that public confidence in charities remains high, with a view to sustaining the level and frequency of donations and the continued willingness of volunteers to support charities’ activities.
Regulation is therefore in everyone’s interests. Sustainable income and volunteering will help charities to fulfil their charitable purposes, and to play a role which is increasingly recognised as the complement to centrally delivered public services. Recognising this, many charities have welcomed the creation of OSCR, and we aim to ensure that this level of support for OSCR principles and activities continues.
The regulatory landscapeThe regulatory landscape is changing. While OSCR has a remit to develop a regulatory framework for charities in Scotland that has not existed before, OSCR is by no means the only regulator. Until the new legislation is passed, the Inland Revenue will continue to recognise charitable status in Scotland. The activities and the governance of many charities are the subject of regulation by other regulators Housing Associations are regulated by Communities Scotland, while care providers are regulated by the Care Commission). In addition, charities operating UK-wide are subject to multiple audit, regulation and tax requirements. For example, English charities regulators such as the Charity Commission and FSA have an element of regulatory responsibility for English-registered charities operating in Scotland.
A priority for OSCR is mapping the current regulatory landscape for charities and developing appropriate working relationships with other regulators, to minimise duplication of effort by regulators and to minimise the burden of compliance for charities. We will also be working with support organisations such as the Institute of Fundraising, ICAS, the Law Society, SCVO and others in developing and refining our regulatory approach.
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Meeting expectations of the Scottish Executive The Scottish Executive has its own developing expectations of charities, both in terms of how they operate and the contribution they make to the quality of life of the people of Scotland. At the same time, it has expectations of how regulators and public bodies more generally plan and manage their activities to meet wider objectives and secure value for money. OSCR’s analysis of how our key processes meet wider objectives is set out in Annex 1
Expectations of regulation and scrutinyFinally, approaches to regulation and scrutiny are evolving with growing expectations that the process adds value to the organisations being regulated.. As a result, the focus across the sectors is widening from probity and stewardship issues to also include examination of broader outputs and outcomes (ie what is delivered and what impact does it have?). For example, Communities Scotland’s Performance Audit approach has recently been revised, placing refined expectations on housing associations in terms of corporate governance and continuous improvement. Furthermore, continued emphasis is being placed by the Accounts Commission and Audit Scotland on the extent to which public sector funding bodies ‘follow the public pound’, ensuring that grant funding is used appropriately and wisely.
Feedback from other regulators confirm that many organisations are already meeting those requirements. In addition, OSCR recognises that many charities and voluntary organisations have been amongst the pioneers in developing their own internal regulation. OSCR aims to adopt a modern approach from the outset, focusing on achieving impact and adding value in our own operations and encouraging this same approach in the regulated constituency, through working with major funders and other regulators and the sector itself.
The challenges for OSCRTaken together, these factors present a number of challenges for OSCR, including:
Ensuring OSCR meets the expectations of:
The Scottish Parliament
The public
The Scottish Executive
Charities across Scotland
The media
Positioning OSCR within the sector, and building relationships with charities, existing regulatory and support bodies and other key partners
Fulfilling OSCR’s contributions to wider Scottish Executive objectives and processes
Ensuring adequate resources for OSCR from the Comprehensive Spending Review process
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Establishing and maintaining links with the team working on the draft Charity (Scotland) Bill
Dealing with issues arising from OSCR’s initial activities
Building public, media and benefactors’ confidence in charities as a whole
In addition, there are a number of internal challenges associated with the creation and implementation of any new organisation. These include:
Building the OSCR team
Identifying key functions and developing associated policies and procedures
Building the appropriate technical infrastructure
Embedding key operational processes
Managing the transition to OSCR2
OSCR’s vision and contributionOSCR’s vision is for:
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A flourishing charities sector in which the public has confidence, underpinned by OSCR’s effective delivery of its regulatory role
Delivery of this vision will not happen overnight. Rather, it will take the concerted effort of a number of different players in the charities sector in the short, medium and long term. OSCR is only one player in this complex environment, although the nature of its role, responsibilities and powers make it a key player. In this context, OSCR aims to
Develop a regulatory framework in which the public have confidence and in which charities can grow and flourish, clear in the knowledge of their rights and responsibilities; and
Manage the transition of the organisation from an Executive Agency to a statutory public body following the enactment of the proposed charity legislation.
OSCR has developed a number of key objectives central to delivery of its identified aims. These will be progressed during the life of this Plan:
1 Plan and undertake a graduated regime of proactive monitoring and supervision of Scottish charities.
2 Investigate and take action in case of misconduct or mismanagement, including appropriate legal action.
3 Work with the Inland Revenue and with other regulators to secure an effective regulatory regime.
4 Provide appropriate advice and guidance to Scottish charities.
5 Provide independent advice and information to the Scottish Ministers and the Scottish Parliament on regulatory matters.
6 Provide advice and guidance to the public concerning the regulation of Scottish charities.
7 Maintain an effective and efficient organisation.
8 Promote a culture of excellence within the organisation, including excellence in staff management and development.
9 Manage the transition between OSCR as an Executive Agency and OSCR as a new statutory body.
ValuesOSCR aspires to be respected and valued in the execution of its functions and will ensure that in the performance of our role as Scottish charity regulator we will be:
Independent: we will maintain our operational independence, acting without fear or favour, in the public interest.
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Accountable: we will be proactive in accounting to all our stakeholders, which will include involving others on a continuous and appropriate basis.
Proportionate: our actions, procedures and culture will be proportionate to the burden of regulation on charities of different sizes, to the degree of risk involved and to the potential impact.
Transparent: we will adopt a Freedom of Information culture from the outset.
Consistent: we will act consistently in our decision making and will also aim to act as an exemplar, observing best practice.
Fair: we will exercise our powers and discretion in a way which is consistent, impartial and even handed.
Turning our vision into action
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The detailed actions required to deliver each of our objectives have been developed as part of OSCR’s operational planning arrangements. Detailed targets and associated operational performance measures for each element of our activity have been identified as part of this process.
The actions are grouped under two related headings: impact and service, and internal management.
Impact and serviceAs set out earlier, tangible and sustained impact is likely to be beyond the timescales set out in this Plan. However, our aim between now and 2006 is to ensure that OSCR is perceived to add value to the sector and to the public at large, through attainment of the objectives set out on the previous page and delivered through key service developments:
1 Developing and implementing a monitoring programme is one of OSCR’s key functions. We have established a Monitoring Design team who are consulting with other regulators (including the Charity Commission, Care Commission, Communities Scotland and the Financial Services Authority). The intention is to operate a small pilot in 2004 and publish a draft scheme for consultation in the summer. We will then evaluate the pilot and consultation responses to decide on the scope, content and process of the monitoring programme. OSCR evidence from the development of the monitoring programme will be a key aspect of the interface between OSCR and the development of charity legislation.
Measures/targets:
We will complete a pilot programme and associated consultation by October 2004
Following evaluation of the pilot and consultation responses, we will launch the monitoring programme by March 2005
2 Developing the Charities Index. The index OSCR currently publishes is incomplete as an authoritative record of active charities. Updating the index is a priority for OSCR and we will be exploring the possibilities of co-operation with the Inland Revenue, SCVO and the Companies Office to provide a regularly updated and definitive index.
Measure/target:
We will have completed the next phase in the development of the index by June 2004
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3 Drawing on the results from the first year’s monitoring activity and on the completed index, we will be able to systematically share information on the charities baseline with the sector, with the Scottish Executive and with the public at large.
Measure/target:
We will have provided information drawn from the monitoring programme and the index to the Scottish Executive and the public by April 2006
4 Continuing the investigations activity formerly undertaken by the Scottish Charities Office (SCO). Two SCO investigators have joined OSCR, ensuring that we retain their very considerable expertise. Our investigations activity will be integrated into OSCR through cross-team working, linked to the monitoring programme described above.
Measures/targets:
We will develop an enquiry policy by June 2004
5 Taking responsibility for development of formal Accounting Regulations including participation, alongside the Charity Commission, in the ongoing review of the SORP promoted by the Accounting Standards Board. We have already identified some principles for charity accounting in Scotland, including the need to ensure that smaller charities are not subject to disproportionate requirements, and are beginning to establish and bring to bear views on technical issues. The Charities Bill will include provision for Charity Accounting regulations and OSCR will be providing expert advice to the Bill team on both the Bill itself and any new regulations introduced alongside.
Measure/target:
We will contribute to the development of formal standards and accounting regulations and practice, responding as required to timescales set by the Accounting Standards Board and/or the Bill team
6 Developing guidance drawing on experience from monitoring programme and investigations. This is a longer-term objective that we will aim to achieve by working closely with other regulators, particularly the Charity Commission, with key advisers such as ICAS and the Law Society and with the charitable sector itself.
Measure/target:
We will develop guidance in response to the key messages arising from our monitoring and other functions . Much of this will be beyond the timescales set out in the Plan. As such, it will mainly fall to OSCR2.
7 Developing participation arrangements to allow formal and informal consultation and communications between OSCR and its main stakeholders. This will help us to shape our activities and gauge
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satisfaction with our progress to date. We view this not only as a feature of OSCR’s governance but as a key service area.
Measures/targets:
We will ensure that formal participation structures are in place with our key stakeholder groups by June 2004
We will assess stakeholder views of our impact and compliance with OSCR values by April 2006
Internal management (including managing the transition to OSCR2)There are a number of crucial building blocks which will embed sound internal management within OSCR, thus ensuring ongoing effectiveness and value for money, and helping to manage the transition to OSCR2. These include:
8. Developing and promoting OSCR and its activities, including:
Identifying and articulating OSCR’s role and responsibilities
Effective reputation management, including crisis management and contingency planning arrangements
Identifying key functions and designing an appropriate response through our policies, procedures and operational planning arrangements
Measures/targets:
We will have established our key operational strategies, policies and procedures by June 2004
9. Development of technical infrastructure and information management: OSCR needs to invest in appropriate Information technology to enable the capture and management of information from over 20,000 charities. We will be commissioning a database to form the basis of our monitoring and reporting. We will take account of the Government’s e targets and aim in the longer term to incorporate interactive features such as on line filing and public interrogation of selected information. We will also consider the possibilities of linking with other regulators and information providers such as the Care Commission and Companies Office as part of our approach to Information management.
Measure/target:We will have the first phase technical infrastructure in place by December 2004
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10.Managing the development of OSCR, with a view to achieving Investors in People (IiP) accreditation. Our activity will include:
Recruiting staff
Building skills and competencies in the new team
Developing appropriate behaviours and operational arrangements
Developing an organisational culture underpinned by the ethos and behaviours associated with both public service and customer service.
Measures/targets:
We will have achieved Investors in People (IiP) accreditation by April 2006
11.Ensuring a seamless transition from OSCR1 to OSCR2. This will involve identification and implementation of the appropriate systems and processes for OSCR’s new status, functions and powers. Some systems will need to be in place as soon as OSCR2 assumes new functions eg. a process for recognition of new charities. This will require considerable forward planning and development.
Measures/targets:
We will outline key business processes for OSCR2 functions and powers by April 2005.
We will identify and develop governance arrangements for OSCR2 from March 2005
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Judging progress and performanceOSCR’s effectiveness will be based on:
the effective use of inputs and resources
the efficient operation of our process
the provision of planned outputs/activities
the delivery of intended outcomes (in terms of impact)
compliance with OSCR’s stated organisational values
While the focus over time will increasingly be on outputs and outcomes, these will be fundamentally shaped by what OSCR1 puts in place over the coming months in terms of structures, budgets, information, technology and processes. The initial measures and targets set out in the previous chapter will indicate the extent to which OSCR1 is performing over the life of this Plan.
The measures and targets for the life of this plan (set out in the previous section) are summarised in the timeline below/on the following page
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Inputs Processes Outputs Outcomes
Measure Target
Complete the next phase in the development of the index of charities
By May 2004
Develop an OSCR enquiry policy By June 2004
Ensure that formal participation structures are in place with key stakeholder groups
By June 2004
Establish our key operational strategies, policies and procedures
By June 2004
Complete a pilot programme and associated consultation
By October 2004
Establish/refine key business processes for OSCR2 functions, powers and sanctions
By December 2004
First phase technical infrastructure in place By December 2004
Identify and develop the shadow governance arrangements for OSCR2
From January 2005
Following evaluation of the pilot and consultation responses, launch the monitoring programme by March 2005
By March 2005
Identify shadow governance arrangements for OSCR2 From March 2005
Outline key business systems and processes for OSCR2 and update functions as appropriate
By April 2005
Develop guidance in response to the key messages arising from our monitoring and other functions
Ongoing
Contribute to the development of formal standards and accounting regulations and practice,
To meet external targets
Provide information drawn from the monitoring programme and the index to the Scottish Executive and the public
By April 2006
Assess stakeholder views of our impact and compliance with OSCR values
By April 2006
Achieve Investors in People (IiP) accreditation By April 2006
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Annex 1: Meeting Wider Objectives via key processes
OBJECTIVE Stakeholder consultation
Active participation structures
Use of ICT Joint ventures and partnership working
Commitment to continuous improvement
Risk assessment
Best Value Important element of OSCR wider accountability and transparency; key BV principle
Important element of OSCR wider accountability and transparency: key BV principle
OSCR committed to effective use of ICT: maximises impact with limited resources
OSCR philosophy of regulation is to work with a wide range of partners, rather than undertake all functions in house
Essential to OSCR functions of development and transition
Overall, key to establishing OSCR credibility and confidence: individual projects will include risk assessment in terms of value for money, delivery and all BV principles
Freedom of Information
Required for publication scheme
Feedback will allow continuous improvement of OSCR publications in all formats
OSR already publishes Index of charities on web site: will maintain web site as primary means of general communication
OSCR will work with Inland Revenue, Companies Office and SCVO in order to maintain the index and to develop the monitoring programme which will allow reporting on the sector
OSCR adopted FoI culture in advance of implementation: will aim to maintain that approach
OSCR has identified confidentiality of investigations as key risk factor in FoI compliance: also interface of FoI with Data Protection
E gif Effective use of ICT enables wider stakeholder consultation
ICT enables stakeholder participation, irrespective location
OSR aims to meet Executive commitment to e delivery of services wherever possible, and as soon as realistically possible
As above OSCR aims to be in advance of mandatory requirements
OSCR recognises that ICT projects are notoriously high risk and will take this into account in project planning and implementation
Long term sustainable development
Ensuring confidence of stakeholders through consultation ensures long term sustainability and impact of OSCR operations, including seamless transition to OSCR 2
Ensuring confidence through active participation structures ensures long term sustainability and impact of OSCR operations, including seamless transition to OSCR 2
OSCR will take safe path through ICT , including outsourcing, to ensure operations are sustainable while securing most effective use of limited resources
Work with partners including advisers is effective use of OSCR limited resources and also builds sector capacity
Managing the transition to OSCR 2 is a key function of OSCR
Improving quality of life
Purpose of regulation is to enable charities to operate effectively and thereby improve quality of life in Scotland and elsewhere
Different participation structures help to create sector capacity
Part of the broader drive to an e enabled society
Helps create social capital and capacity
OSCR as an organisation is committed to continuous improvement while regulating charities whose purpose is to improve the quality of life in Scotland and elsewhere
Importance of managing reputation risk in order to establish confidence in OSCR and the sector which it regulates
Honouring the Voluntary Sector compact
Wider voluntary sector includes charities: : OSCR should consult on principles and implementation and do so in terms consistent with the compact
Important element of wider and proactive accountability
Enables dialogue with the regulated constituency
OSCR will be looking to partnership working, particularly with voluntary sector intermediaries eg SCVO
Promoting equal opportunities
Stakeholder consultation enables OSCR to embed equal opportunities in planning and implementation
Offers different opportunities for different interests
Can assist those with a range of abilities and interests to access OSCR information and guidance
Offers different opportunities for a rage of partners and interest groups
Promoting Equal Opportunities is a hallmark of continuous improvement for OSCR as an organisation; consistent with our commitment to Investors in People
OSCR should embed consideration of Equal Opportunities in planning and implementation
Annex 2: OSCR Budget Breakdown 2004/05
Operational Costs2
£
Rental and services210,000
Salaries, training and recruitment775,000
Specialist legal and agency support190,000
Operating costs295,000
Set-up costs
Initial costs, including updating index and research150,000
2 For 2005/06, assume 2004/05 budget for OSCR1 only
Monitoring set-up including consultation 240,000
Database design and implementation300,000
TOTAL2,160,000