Bates Wells Briefing for Charities and Social Enterprises | 10 January 2018

Bates Wells Highlights

Charities, Social Enterprise

We hope you had a good break over the festive period and wish you all the best for 2018. This Briefing catches you up on announcements since 11th December.

Bates Wells will be opening a new hub in 2018 that offers charities the opportunity to rent space in its central London offices. Find out more information here.

At a glance

The Information Commissioner’s Office has published a set of FAQs on GDPR specifically aimed at charities.

In December, the Charity Commission issued a regulatory alert about safeguarding.

The Government has published its response to the report of the House of Lords Committee on Charities.

The Gambling Commission has announced new codes for society and local authority lottery operators, and external lottery managers.

The Office for Students has replaced HEFCE as the main regulator of higher education.

An inquiry into Grenfell Tower has been launched by the Equality and Human Rights Commission.

Charity Commission


The Commission issued a regulatory alert on safeguarding and a press release.

BWB has published this update on Safeguarding for charities and Safeguarding in the housing sector.

Annual return consultation

The Commission has published its response to the results of the Annual Return consultation. Following the consultation, most of the proposed questions have been retained, including questions about overseas expenditure.  The question about overseas income is, for now, being amended so it only asks about income from overseas governments or quasi-governmental bodies, charities and NGOs (next year charities will also need to include information about other overseas income).  See here for a detailed Briefing by BWB Partner Thea Longley on the outcome of the consultation.  

Charitable Authorised Investment Funds

Kenneth Dibble has written a blogpost about setting up new CAIFs (Charitable Authorised Investment Funds) and transferring existing Common Investment Funds (CIFs) into CAIFs.

Independent Examiner’s Report template

The Independent Examiner’s Report template has been updated.

Annual Return Reminder

The Commission has issued a reminder for charities with financial years ending 31 March 2017 to submit their annual returns.


In December, the commission announced it had opened an inquiry into the Darren Wright Foundation(1167130), a Bristol-based charity operating to relieve the needs of disabled people, people with life limiting illnesses and their families through the provision of grants and other financial support for life-changing operations. The inquiry follows complaints from the public, including from the families of beneficiaries, raising concerns about difficulties in communicating with the charity and accessing funds that had been raised on behalf of their family members.

The Commission has published its inquiry report into Deen Team (1155560). The charity was registered in 2014 and soon after proactively identified for a monitoring visit by the Commission because it said it was involved in delivering aid overseas, including in Syria. The inquiry concluded that there had been evidence of poor financial management and governance of the charity and of misconduct and mismanagement in the charity’s administration. Among other steps taken, the commission exercised its power under section 79A to remove one of the trustees and also disqualified her from being a charity trustee for four years under section 181A Charities Act 2011. The charity has now been removed from the Register on the basis that it has ceased operating.

Appointment of Kenneth Dibble as Legal Board Member

The commission announced on 21 December that Kenneth Dibble will leave his current legal role at the Commission in March to become one of the Commission’s Legal Board Members.

Conversion of charitable companies to Charitable Incorporated Organisations (CIOs)

On 1 January 2018, new rules came into force allowing charitable companies to convert into charitable incorporated organisations, or CIOs. Charitable companies may now change their legal status to that of a CIO using a relatively straightforward procedure, involving two members’ resolutions and an application to the Charity Commission.  The conversion programme is being staggered, with only charitable companies with income under £12,500 able to convert initially.  Larger charitable companies will be able to convert in stages throughout 2018, according to their annual income.  For more information see this BWB Briefingwhich includes details of how to book on our seminar about converting to a CIO which will take place on 17th April 2018.

Charity law cases

A new appeal has been filed in the First Tier (Charity) Tribunal by David Swettenham.  Third Sector reports it is an appeal by the charity Jole Rider Friends against the freezing of its bank accounts.

Tax and VAT

The Charity Tax Commission set up by NCVO has published its terms of reference.  The main output of the commission will be a comprehensive report setting out recommendations on what changes to the current tax treatment of charities would better generate public benefit and reflect the principles that underpin it.  The commission’s work may also involve interim outputs such as discussion papers and calls for evidence, the findings of which would be built into the final report.

House of Lords Committee on Charities

In December, Government published its response to the report of the House of Lords Committee on Charities, “Stronger Charities for a Stronger Society”, which was issued in March 2017.  The report welcomes many of the Committee’s recommendations, but disappointingly does not commit to any specific legislative or policy changes.  The headlines include:

  • Government rejected the Committee’s recommendation of a public consultation on introducing a statutory duty to allow employees time off to perform trustee roles.
  • Responding to the Committee’s call for a diverse Charity Commission board, Government said that in recruiting a new legal board member and chair for the Commission – a process which is nearly complete – it sought to maximise the diversity of applicants.
  • There is support for the Committee’s recommendation that charities should disclose their compliance with the Charity Governance Code in their trustees’ annual report.
  • The response confirms that charities that can evidence their impact and value for money will be in a stronger position to successfully bid for public sector contracts.  The Voluntary, Community and Social Enterprise Sector Crown Representative, when appointed, will address barriers and technical issues for charities seeking to bid for Government contracts and will promote understanding of the full impact achievable from the Public Services (Social Value) Act 2012.
  • The response confirms that central Government continues to follow the principles of the Compact.
  • Any proposals for charging by the Charity Commission should make clear how they would benefit charities and strengthen the sector overall.  The Commission must be transparent about how any extra revenue would be spent.

The Charity Commission has published its response to the Lords’ Select Committee report, which is limited to comments on the six recommendations which require action by the Commission:

Recommendation 6 (that there should be a time limit for individuals serving as trustees, including that the CC’s materials and draft articles should include a suggestion of time limits)

  • The Commission accepted this recommendation in part, saying that it is sympathetic to the principle and endorses the recommended good practice set out in the Charity Governance Code. It will review its draft articles of association to better reflect the Charity Governance Code, when time allows. However the Commission says that it is for charities to develop their own policies on this and believes that a mandatory time limit would be unworkable.

Recommendation 7 (that the Commission seeks to recruit a more diverse Board)

  • The Commission says that it will continue to work with DCMS, which has responsibility for Board appointments.

Recommendation 31 (that the Commission considers what support and guidance it can offer to charities seeking to merge and taking a positive approach to assisting mergers)

  • The Commission accepts this recommendation and has set out the current guidance available on this. It will consider whether further advice on mergers is needed. The Commission does note that it is currently limited as to the advice and support it can provide in this area due to its funding model and it would consider what further work could be done if and when additional funding is secured.

Recommendation 32 (that the Commission includes options for time-limited structures in its model governing documents)

  • The Commission does not accept this recommendation as it is not clear that it is possible under the current legal framework (except possibly for trusts). Amending the model governing documents in this way would also have considerable resource implication for the Commission.

Recommendation 40 (that charity staff and trustees are encouraged to report concerns about their charities to the Commission)

  • The Commission accepts this recommendation and has set out how it operates to facilitate this and the guidance that is available. (It does not seem to be suggesting that additional work will be done in this area).

Recommendation 41 (that the Commission makes clear how charging for regulation would benefit the sector)

  • The Commission accepts this recommendation, sets out some of the issues with the current funding model and says that if it goes ahead with a consultation on charging, it will set out the benefits to the sector of doing this.


The Centre for Voluntary Sector Leadership has provided access to four videos on the theme “Leading through challenging times”.


See Tax and VAT above.

HM Treasury has confirmed that the Spring Statement will be published on Tuesday 13 March 2018.  It has also published a paper on the new Budget timetable and tax policy making process, which makes it clear that the Spring Statement will accompany an updated economic and fiscal forecast from the Office for Budget Responsibility.  There will not be any significant tax or spending announcements at the Spring Statement unless the economic circumstances require it.  


Local Government and funding

On 6 December 2017, the Local Government Association (LGA) issued a press release calling on the government to provide clarity on how it will replace the current EU structural funding regime once the UK has left the EU. In its 2017 election manifesto, the government pledged to create a UK Shared Prosperity Fund to replace money local authorities currently receive from the EU. The LGA has stated that councils are becoming concerned over the lack of clarity over how the government plans to set up such a fund, and meet the potential £8.4bn UK-wide funding gap that would open on leaving the EU, when structural funding would cease. The LGA has given evidence to the Communities and Local Government Select Committee raising these concerns, and has produced a report, Beyond Brexit: future of funding currently sourced from the EU, which examines options for the design and delivery of successor funding arrangements.

Charity sector implications and funding

NCVO has produced a brief Brexit end of year review which covers the major Brexit developments in 2017, what to expect in 2018, and what this might mean for the voluntary sector.

The following Guardian article written by Daniel Ferrell-Schweppenstedde from Directory of Social Change highlights some of the broader sector concerns surrounding funding post Brexit. The article notes that in England, the bulk of funding goes to three areas: charities working in international development and humanitarian aid (£125m in 2015), research (£59m) and natural and historical conservation (£35m).

Data protection

Current law

The Information Commissioner’s Office has published this update on its investigation into data analytics for political purposes.

In a preliminary ruling in relation to an Irish case, the ECJ has confirmed an Advocate General opinion that handwritten exam scripts submitted at a professional examination and any examiner comments constitute a candidate’s personal data to which the candidate has a right of data subject access. This decision will now be handed back down to the Irish Supreme Court and may provide a method for students to gain access to this information under Irish data protection legislation. See Nowak v Data Protection Commissioner (Case C-434/16) EU:C:2017:994 (20 December 2017).

The High Court has found that an employer, Wm Morrisons Supermarkets PLC, was vicariously liable for the deliberate and criminal disclosure by a rogue employee of personal data belonging to co-workers.   The judge gave Morrisons leave to appeal to the Court of Appeal and Morrisons has indicated that it will do so.  See Various claimants v Wm Morrisons Supermarket PLC [2017] EWHC3113 (QB) (1 December 2017

Recent ICO fines

A firm of loss adjusters has been fined £50,000 for unlawfully disclosing personal data which had been obtained illegally by senior employees and rogue private investigators.  A director and a senior member of staff have also been sentenced to record financial penalties, along with the private investigators involved.

The director of an accident claims company has been fined £335 for inventing a crash in order to trace the owner of a private number plate he wanted to buy.  He was also ordered to pay £364.08 costs and a victim surcharge of £33.


The Information Commissioner’s Office has published a set of FAQs on GDPR which are aimed specifically at charities.  

It has also published a series of documents for the education, health and local government sectors on GDPR and how it will affect them and their day-to-day operations:

  • Local government. This includes specific guidance on getting ready for the GDPR and examples of good practice. The document also provides information on producing publication schemes and the results of the Local Government Information Governance survey undertaken by the ICO at the end of 2016.
  • Education sector. This covers issues surrounding fundraising and marketing in education organisations and surveillance technology. The document also includes a webinar on data protection for those in the education sector.
  • Health sector. This covers registering with the ICO and looking after information held about patients (including deceased persons’ medical records). The document also lists recent enforcement action taken against individuals in the health sector following data breaches

The ICO has begun a consultation on draft guidance on children and the GDPR.  The consultation closes on 28 February 2018.  See this blog by the Information Commissioner for the background.   Children’s information rights are also likely to be given added protection in the Government’s Data Protection Bill, currently proceeding through Parliament and which will complement the GDPR.

In November 2017, the Article 29 Working Party published its guidelines on consent under the General Data Protection Regulation ((EU) 2016/679) (GDPR) (WP259). The guidelines include the following areas relating to the giving of consent in relation to personal data processing:

  • Elements of valid consent
  • Obtaining explicit consent
  • Specific areas of concern in the GDPR (such as in relation to children and scientific research)

The guidelines are currently under consultation and the consultation closes on 23 January 2018. Responses should be sent to [email protected] and [email protected].  The final part of the guidelines includes a frequently asked questions section but this will be completed after the conclusion of the consultation period.

The Article 29 Working Party has also published for consultation its adopted guidelines (WP260) on transparency under the General Data Protection Regulation ((EU) 2016/679). The guidelines cover the following areas in relation to transparency under the GDPR including:

  • Clarification of the terms “free of charge”, “clear and plain language” and “concise, transparent, intelligible and easily accessible”.
  • Information that should be provided to data subjects, including information related to further processing and exceptions to this obligation. The guidelines also include a Schedule listing the information that should be provided to a data subject under Articles 13 or 14 in tabular form.
  • Visualisation tools, such as icons and certification mechanisms.

The consultation closes on 23 January 2018 and responses should be sent to [email protected] and [email protected].

This is an interesting article about refreshing consent mechanisms ahead of GDPR, with an example of how Manchester United has approached things.

Also see under Public procurement below.


The government has announced up to £330 million from dormant bank and building society accounts will be used to help the homeless, disadvantaged young people, local charities and other good causes in the UK over the next four years.  Of this, up to £135 million will be used by Big Society Capital (BSC) to fund stable and long-term accommodation for vulnerable groups such as homeless people and those suffering with mental health issues, as well as to provide support for local charities and social enterprises. This allocation meets existing funding commitments to Big Society Capital, who will use it to leverage substantial private co-investment, to maximise the impact of these funds.  Around £90 million will also be invested in support of projects that help disadvantaged young people into employment. The remaining £55 million is set to be awarded to financial inclusion and capability initiatives which will tackle issues such as problem debt, as well as improving access to financial products and services for those on lower incomes.  See here for comment from Social Enterprise UK. 

Civil Society reports that Tracey Crouch MP has clarified that charities can use grants from the Tampon Tax Fund for awareness-raising, so long as the intention is not to change government policy or attract more funding.

New Philanthropy Capital and Lloyds Bank Foundation for England and Wales have published three reports exploring funding practices around the globe and asking grant funders to look at the various different ways in which they can support the voluntary sector:


Fundraising Regulator

The Fundraising Regulator has announced a revised approach to its complaints report, which will see the Regulator adopt a new, more qualitative method in 2019/20.

In an effort to better engage with and support smaller charities, the Fundraising Regulator will be holding a roundtable event at its office in London on 31st January 2018 with organisations that have an annual fundraising spend between £50,000 and £150,000, to discuss:

  • How the Fundraising Regulator can better engage with smaller charities and how they prefer to hear about its work
  • The main regulatory challenges affecting smaller charities and what the Fundraising Regulator can do better to support compliance and help smaller charities understand their regulatory responsibilities
  • The incentives/barriers for smaller charities to register with the FR
  • How the FR can ensure that smaller fundraising charities know about and act upon their responsibilities regarding the Fundraising Preference Service

The deadline for applications to attend was 20th December and it is not clear if any spaces are still available.


On 12 December 2017 the Gambling Commission announced new codes for society and local authority lottery operators, and external lottery managers, designed to improve transparency for players.   From 4 April 2018 all lotteries will have to:

  • make it clear to consumers before they buy a lottery ticket exactly which society or charity the lottery proceeds are going to
  • publish what proportion of money raised from lottery ticket sales in the previous year was returned directly for the purposes of the society.

These changes follow a consultation on the new codes between July and September 2017: the commission’s response to the consultation is available here.


See here for a Legacies Roundup published by BWB’s Legacies team.

Fundraising Magazine has published an article about improving diversity in fundraising departments.  Complete this short survey to access a copy.


Schools and colleges

The Department for Education is seeking views on proposed changes to the 2016 statutory guidance, Keeping Children Safe in Education, and new non-statutory advice from the department covering sexual violence and sexual harassment between children in schools and colleges. The DfE is consulting on:

  • A variety of proposed changes to the statutory guidance to help schools and colleges better understand what they are required to do by law and what the DfE strongly advises they should do in order to safeguard and promote the welfare of children.
  • A new departmental non-statutory advice document, covering sexual violence and sexual harassment between children in schools and colleges.

Responses to the consultation, which closes on 22 February 2018, should be emailed to [email protected].

The Department for Education has also launched a consultation on Relationships and Sex Education (RSE) in schools in England.  The DfE intends to issue updated guidance that will cover new areas including mental wellbeing, staying safe online, and LGBT issues, as part of its programme of reform of RSE.  Responses to the consultation should be submitted through the online survey by 12 February 2018.

The Department for Education is also launching a new service designed to give more vulnerable children the chance to attend some of the country’s highest quality independent and state boarding schools.  The Boarding School Partnerships Information Service will link local authorities up with children’s charities and boarding schools so they can work together to identify more young people on the edge of care who can be put forward for bursaries and scholarships at boarding schools. 

BWB’s Education Team has published this Briefing on the new careers obligations on schools which came into force at the beginning of this year. 

Higher education

On 1st January 2018, the Office for Students came into force.  This is a new regulator designed to “champion the interests of students, promote choice and help to ensure that students are receiving a good deal for their investment in higher education”.  The OfS replaces HEFCE as the main regulator of higher education, and it will hold universities to account for the quality of teaching they provide.

Also see the second item under Data protection and the second item under Scotland below. 

Health and social care

In December 2017, the Government announced that it will not be taking forward the previous government’s plans to implement a £72,000 cap on care costs in 2020.  The Government will be consulting on a Green Paper on adult social care which will still consider proposals to place a limit on the care costs that individuals face, but just not tied to the previously announced £72,000 figure.  The government has also confirmed that although the Green Paper will focus primarily on the reform of care for older people, it will also consider elements of the adult care system that are common to all recipients of social care.

The Competition and Markets Authority has published a blog post on its website in relation to its completed market study into the supply of care home services for the elderly in the UK (which we mentioned in our last BWB Briefing). 

Social finance

The government has begun legislating to clarify that no business borrowing through a peer-to-peer platform needs to be regulated as a ‘deposit taker’ (often referred to as a ‘banking licence’) unless that is their core business.  

On 18 December 2017, the European Commission published this public consultation on how to make it easier for small and medium-sized enterprises to access public markets. Through the consultation, the Commission is first seeking general views on the main reasons behind the weakness of the EU public markets for SMEs. The consultation then requests for information on the benefits and impacts of possible changes to EU legislation. Responses are requested by 26 February 2018.

Asian Venture Philanthropy Network (AVPN) has launched its latest research report to understand and document the existing and emerging landscape for social investing in 14 social economies. The report is a product of qualitative research examining the essential characteristics of the social economy. It provides key insights into various aspects of the sector. According to Martina Lemiere from Philanthropy Impact, the report may help investors deploy capital toward the UN’s Sustainable Development Goals.

Third Sector reports on the government’s indication that it is open to the possibility of regulatory changes to make it easier for pension funds to consider social impact when making investments. In response to the Law Commission’s report called “Pension Funds and Social Investment”, the government states that it recognises that regulatory clarity on what fund’s trustees must consider before making a social investment would be helpful to trustees. The government plans to consult on the issue.

blog post by Big Society Capital’s (BSC) Evita Zanuso (Financial Sector & Investor Engagement Director) and Karen NG (Investment Associate) provides information on BSC’s Donor Advised Fund Advisory Council and its report, A Practitioners Guide to Social Impact Investing.

Social enterprise

The government has launched the Small Business Commissioner (SBC) complaints scheme, giving small businesses (broadly, those with under 50 staff) an extra means of holding larger businesses to account if there are problems about getting paid. The detail of the complaints scheme is set out in the Small Business Commissioner (Scope and Scheme) Regulations 2017 (SI 2017/1273). Broadly, a complaint must be brought by an eligible business within 12 months of the incident complained of, although the SBC is empowered to extend this time limit. Before complaining to the SBC, complainants must communicate the substance of their complaint to the person against whom it is made, unless the SBC considers that there is sufficient information that such communication would have a detrimental effect on the commercial interests of the complainant. The Regulations also set out the requirement as to the form of the complaint and the SBC’s right to dismiss it. They also include a list of the factors that the SBC must take into account when deciding whether to identify the respondent in any report published made under section 6 of the Enterprise Act 2016.  The SBC website is now live, providing information on how to deal with an unpaid invoice, how to complain to the SBC about an unpaid invoice and gives information about the role of the SBC.

Social impact

new report launched in December 2017 by national charity Re-Solv and Bates Wells Braithwaite’s social impact unit, entitled “The Social Impact of Solvent Abuse”, underlines the potential extent of solvent abuse across England and Wales today.

Responsible business

Patrick Nash has written this blog for NCVO about “Why corporate social responsibility in the charity supply chain matters”.

Culture and creative

Grants of up to £300,000 from the DCMS/ Wolfson Museums and Galleries Improvement Fund will be available for eligible museums to apply for from spring 2018.

Faith based

The Department for Communities and Local Government has published a report “CATHEDRALS AND THEIR COMMUNITIES – A report on the diverse roles of cathedrals in modern England”.

Organisations working internationally 

The House of Commons International Trade Committee has launched an inquiry into the UK’s future trade relationships with developing countries, particularly those in the Commonwealth. Issues that the Committee is considering include:

  • The trade preferences to be given to least developed countries and developing countries after Brexit.
  • Whether economic partnership agreements are effective from both a trade and development perspective.
  • How the government can best support UK foreign direct investment in developing countries.

The deadline for written submissions is 16 February 2016.

DFID and the Home Office published the UK Anti-corruption Strategy 2017-2022 on 11 December 2017.  This provides the framework which guides Government’s anti-corruption policies and actions. The strategy identifies six priorities, including promoting integrity across the public and private sectors, reducing corruption in public procurement and grants, and working with other countries to combat corruption.


The Government is to look at “bold options to improve consumer redress across the housing sector”.  This may include proposals for a new Housing Ombudsman.  CLAS reports that in his speech announcing this, the Communities Secretary included reference to tenants of charities, whose current regulator in the case of any property issues is the Charity Commission. He noted that housing was a highly specialised area and that it fell well outside the Commission’s usual remit, leaving both the Commission and charity tenants unable to properly deal with complaints.

Also see under Scotland below.


The inquiry, Following Grenfell, which has been launched by the Equality and Human Rights Commission (EHRC), will specifically focus on the equality and human rights implications of the events at Grenfell Tower and include the following key areas:

  • The duty to investigate: in relation to the State’s duty to investigate incidents of deaths or inhumane and degrading treatment where they may be implicated and ensure proper accountability, the inquiry will examine how the State is investigating Grenfell and whether current arrangements meet its obligations.
  • The right to life: the inquiry will consider whether the State ensured the safety of residents in Grenfell Tower.
  • Inhumane and degrading treatment: whether the harm suffered by those who survived or witnessed the fire may constitute “inhumane and degrading treatment” and the experience of those after the fire may have increased the harm they endured.

The inquiry will also focus on whether the State complied with its duty to provide adequate and safe housing to the residents of Grenfell Tower, with particular emphasis on the needs of children, disabled and older residents. It will also consider whether victims have had access to justice and whether there were policies in place that disadvantaged any particular groups, such as disabled people or the elderly, and if the State met the requirement of the public sector equality duty (PSED). The work of the inquiry is expected to continue until April 2018.

Freedom of information

See under Scotland below.


See under Charity Commission above. 

Campaigning, lobbying and elections

See second item under Tax and VAT above and first item under Data protection.

In December 2017, the Committee on Standards in Public Life published its report “Intimidation in Public Life”. 

Last month the government launched the first ever Democratic Engagement Plan to tackle democratic exclusion and outline how it will increase participation among under registered groups.

See final item under Scotland below.


The Office of the Scottish Charity Register (OSCR) has published new guidance for Scottish Charities on drafting Trustees’ Annual Reports.

Civil Society is reporting that the Scottish Government has stripped Scottish independent schools of the right to claim business rate relief. We haven’t yet been able to find confirmation of this in the draft Scottish budget.  

The Scottish Government has published a consultation on a draft order that will extend coverage of the Freedom of Information (Scotland) Act 2002 (FI(S)A 2002) to registered social landlords (RSLs) and their subsidiaries. The consultation closes on 7 March 2018.

Following the introduction in April last year of the Lobbying (Scotland) Act 2016, the Scottish Parliament was given the duty to develop and implement the systems and guidance to operate the new Lobbying Register and committed to do so within 2 years of the Act being passed.  In a blog for OSCR, Dougie Wands, Acting Lobbying Registrar, has summarised what to expect for those charities involved in face-to-face lobbying of MSPs, members of the Scottish Government, junior Ministers, Special Advisers or Permanent Secretary.

Northern Ireland

The Charity Commission for Northern Ireland (CCNI) has published a blog on the subject of Making the most of your Trustees’ annual report.

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Disclaimer – The information contained in this update is not intended to be a comprehensive update – it is our selection of the website announcements made in the week up to last Friday which we think will be of interest to charities and social enterprises. The content is necessarily of a general nature – specific advice should always be sought for specific situations.

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 January 10, 2018.