Bates Wells Briefing for Charities and Social Enterprises | 16 August 2017

Bates Wells Highlights

Charities, Social Enterprise

The Charity Commission has published the final version of its guidance on grant funding an organisation that is not a charity.

At a glance

The Fundraising Regulator has published a Rule Book for private site fundraising.

The Government has launched a Consultation on the Package Travel Regulations.

Charity Commission

Guidance on grant funding an organisation that is not a charity

The Commission has published the final version of its guidance on grant funding an organisation that is not a charity. The guidance was originally published in draft in February 2016 and was subject to an informal consultation process. The guidance has been revised in a number of areas since the draft version and is now slightly longer. Improvements include the removal of a statement that non-charities’ “core costs” cannot be met by charities. Some of the more prohibitive statements have also been replaced with more enabling wording.

Civil Society is reporting that the revisions to the original draft are generally being welcomed by sector bodies.

Grenfell Tower funds

The Commission has published a list of financial support available for those affected by the Grenfell Tower fire, and how it can be accessed. It has also published “transparency information” about the funds raised so far and how much has been spent and says that this information will be updated weekly.

Charity trustees

This article “What you need to know to be a charity trustee” written by the Commission’s Head of Guidance and Practice, Jane Hobson, appeared in The Guardian on 3 August.


Great Repeal Bill

A clause in the Brexit bill set to be debated next month would mean that British citizens will no longer be able to sue the Government for breaking the law after Brexit. The Government can currently be sued under The European Court of Justice’s 1991 Francovich ruling. It stipulates that a member state is liable if an individual or business has been damaged because of a failure by the country to implement EU law. However, a clause in the repeal bill says: “There is no right in domestic law on or after exit day to damages in accordance with the rule in Francovich”.  Experts have warned that this could mean the Government escapes liability for past breaches of EU law, when it was a member of the bloc.

Charity sector implications

In the following article, Kirsty Weakley takes a closer look at the arguments around what type of Brexit is best for the charity sector. In particular considers CFG’s recent report which concluded that a clean Brexit is less of a risk than remaining within the single market and customs union for charities, and the media backlash faced.

Elsewhere a survey conducted by Scottish Council for Voluntary Organisations suggests that 86 per cent of charities in Scotland think that leaving the EU will damage the economy and increase demand for charities’ services.


Private site fundraising

The Fundraising Regulator has published a Rule Book for private site fundraising.  The existing Rulebooks for street and door-to-door fundraisers have also been updated to strengthen links between these and the Code of Fundraising Practice. The revised versions distinguish between the Fundraising Regulator’s public-facing role and the operational compliance role carried out by the Institute of Fundraising.   In September, the Standards Committee will undertake a “wider review of the rulebook governance”.

Changes to travel law

The Government has launched a Consultation on the Package Travel Regulations which would introduce new consumer rights around package holidays. This may affect charities running challenge events. The consultation runs for six weeks from 14th August.

Social finance

The government has issued this press release about small businesses which were rejected for loans by some of the UK’s biggest banks but have gained funding from alternative lenders.  The government-backed bank referral scheme requires 9 of the UK’s biggest banks to pass on the details of small businesses they have turned down for loans to three finance platforms – Funding Xchange, Business Finance Compared and Funding Options. These platforms then share their details with alternative finance providers and go on to facilitate a conversation between the business and any provider who expresses an interest in supplying finance to them.

Pioneers Post has this report on “Premiums4Good” – an initiative of QBE, one of the world’s top 20 insurance companies. This initiative offers customers the option to have 25% of their premiums invested in social infrastructure, environmental initiatives and social impact bonds.  

Local authorities

The High Court has held that Wandsworth Borough Council did not have the power to dispose of a building on Wandsworth Common by granting a 15 year lease to a limited company intending to operate a private nursery at the premises.   The court found that the disposal was contrary to the statutory trust arising under section 10 of the Open Spaces Act 1906 (OSA 1906), pursuant to which the common is held on trust for the use and enjoyment of all local inhabitants.

Data protection

Last week we flagged the new Data Protection Bill.  See here for a briefing on the Bill from BWB’s Lawrie SimanowitzMark Abbott and Rachel Norman

The Information Commissioner’s Office (ICO) has reminded NHS staff about the potentially serious consequences of prying into patients’ medical records without a valid reason.  The warning came after a former health care assistant was ordered to pay a total of £1,715 in fines and costs after pleading guilty to offences of unlawfully obtaining and unlawfully disclosing personal data.

The ICO has fined TalkTalk Telecom Group PLC £100,000 after it “failed to look after its customers’ data and risked it falling into the hands of scammers and fraudsters”.  The investigation found the issue lay with a TalkTalk portal through which customer information could be accessed. One of the companies with access to the portal was Wipro, a multinational IT services company in India that resolved high level complaints and addressed network coverage problems on TalkTalk’s behalf.  A specialist investigation by TalkTalk identified three Wipro accounts that had been used to gain unauthorised and unlawful access to the personal data of up to 21,000 customers.  Forty Wipro employees had access to data of between 25,000 and 50,000 TalkTalk customers. Staff were able to:

  • log in to the portal from any internet-enabled device. No controls were put in place to restrict access to devices linked to Wipro.
  • carry out “wildcard” searches – for example, entering “A*” to return all surnames beginning with that letter. This allowed staff to view large numbers of customer records at a time and to export data.
  • view up to 500 customer records at a time.

The ICO found this level of access was unjustifiably wide-ranging and put the data at risk.

Charity accounting

Civil Society Media reports that three working groups have been set up by the charities SORP committee to consider changes to reporting. The first group will look at the possible introduction of simpler reporting for smaller charities. The second will examine changes to the reporting of governance, with the aim of ending “boilerplate” statements and the final group will look at whether charities should present a “key facts summary” in their accounts.

According to Civil Society Media, a report from the Charity Finance Group has shown that there is a significant gap between the needs of small charities and the capacity of those that provide accountancy support. The survey has indicated that the number of accountancy and support service providers has fallen since previous research.

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This information is necessarily of a general nature and doesn’t constitute legal advice. This is not a substitute for formal legal advice, given in the context of full information under an engagement with Bates Wells.

All content on this page is correct as of August 16, 2017.