Bates Wells Briefing for Charities & Social Enterprises | 3 July

Bates Wells highlights

Charities, Social Enterprise

The Charity Commission has provided an update on the work of its interim safeguarding taskforce. See today’s Briefing for details.

Save the date for this year’s Annual Charity & Social Enterprise Tea Party, due to take place on Monday 17th September at the Law Society. Further details will be circulated soon.

At a glance

The Information Commissioner’s Office has published the final version of its guidance on Children and the GDPR.

The Department for Culture, Media and Sport has begun the long awaited consultation on changes to the rules relating to society lotteries.

Plans to amend the Social Value Act have been announced.

The Insolvency Service has announced the disqualification as a director of an ex-charity CEO and a director of a professional fundraising company.

On Sunday 1st July, the new Package Travel Regulations came into force.

Charity Commission

Update on work of safeguarding taskforce

The Commission has provided an update on the work of its interim safeguarding task-force which was established in February to manage the increased number of serious incident reports, and undertake a review of historic serious incident and whistleblowing reports on safeguarding issues.

  • The Commission says that reporting of serious safeguarding incidents by charities continues to increase and that it received 620 safeguarding related reports in April and May 2018, compared to 196 during the same period in 2017. In total, since February, the Commission has received 1,152 reports of serious incidents (RSIs) about safeguarding (to end May 2018).
  • In relation to the ‘deep dive’ the taskforce is undertaking of the Commission’s records of serious incident reports on safeguarding matters to identify any gaps in full and frank disclosure by charities, and to establish whether appropriate follow-up actions were taken by charities, the team has now analysed a total of 5,238 serious incidents reported to the Commission between 1 April 2014 and 20 February 2018 (95% of the total identified for review). The Commission says that the analysis so far has not identified any cases where the Commission has serious and urgent concerns that require it to take immediate action, or where it has had to engage with the authorities about any ongoing risk or unreported criminality. The Commission’s analysis has identified only one incident relating to potential criminal behaviour where it was unclear from its records whether it was reported to the authorities at the time; the Commission has now followed this up and verified that this incident was reported appropriately.

Once the work of the task-force has concluded, the Commission will publish a report setting out the key findings and lessons for charities.

Change charity details service

The Commission has published some further information about its upcoming new service for changing a charity’s details (reported last week) which will go live at the same time as the new Annual Return.

Reminders about new annual return and automatic disqualification

The Charity Commission has issued a further news story reminding trustees about the new Annual Return for 2018; the latest version now includes additional information about questions relating to salaries and benefits. See this BWB Briefing from earlier this year which summarises the new questions.

The Commission is also reminding trustees about the changes to the rules on automatic disqualification of charity trustees and senior managers which come into force on 1 August and to apply for a waiver, if relevant.

New inquiry

The Commission has announced that it has opened an inquiry into Fazal Ellahi Charitable Trust a charity for the advancement of education and the advancement of the Muslim religion which was removed from the Register in 2009 when it failed to submit annual accounts and did not respond to the Commission’s correspondence so the Commission concluded it was not operating. The Commission has said that its recent engagement began following the conviction of terrorism offences of the Imam at the mosque run by the charity and that the inquiry will examine the following regulatory concerns:

  • the management and oversight of staff, use of the charity’s premises and safeguarding procedures by the trustees
  • whether the trustees have properly exercised their legal duties and responsibilities under charity law in the administration of the charity
  • the financial management of the charity, particularly in regards to maintaining and preserving accounting records
  • whether there has been misconduct and/or mismanagement by the trustees, including failure to comply with the charity’s own governing document

Case report

The Charity Commission has published a case report about Love Saves the Day Foundation (1161939). The Commission’s engagement with the charity began when concerns were raised in the media, including that the financial information in the charity’ accounts (which showed that there had been no income or expenditure for the year ended 31 May 2016) did not correspond with information on the charity’s website, which apparently referred to significant donations having been made by the charity. One of the reasons that the Commission was concerned was that the charity was expecting a £10,000 grant at the time of registration and it was not clear what had happened to those funds. The trustees explained to the Commission that those funds had not been received by the charity (because the trustees had instructed the donor to transfer the funds directly to another charity with objects that were consistent with the charitable aims of Love Saves The Day Foundation), the charity was no longer operating and the donations referred to on the website were made by a trustee in a personal capacity. The Commission commented that the funds provided by the trustee personally should have been accounted for in the charity’s accounts. The Commission instructed the charity to take its website down as it was misleading; the charity has since been removed from the Register as it is no longer operating.

Expansion of the SORP-making body

The Financial Reporting Council (FRC) has approved the addition of the Charity Commission for Northern Ireland and the Charities Regulatory Authority for the Republic of Ireland as joint members of the SORP-making body with the Charity Commission for England and Wales and the Scottish Charity Regulator (OSCR).

This item has also been included as news stories on the websites of OSCR and CCNI.


The Government Equalities Office has published a press release in relation to progress made by FTSE 350 companies in meeting the Hampton-Alexander Review target of having at least 33% of board positions held by women by the end of 2020. They note that, if progress matches the same gains made over the last three years, then FTSE 100 companies are on track to meet the 2020 target. However in relation to FTSE 350 companies, while the number of women on boards has increased to 25.5%, around 40% of all appointments will need to go to women over the next 2 years for the FTSE 350 to meet the 33% target. They also note that there are still 10 FTSE 350 companies with all-male boards.

Also see under Company law below.

Data protection

Processing children’s data

The Information Commissioner’s Office has published the final version of its guidance on Children and the GDPR. It explains what the law requires of data controllers that process children’s personal data.

The ICO has also issued a call for evidence to help it produce an Age Appropriate Design Code.

ICO enforcement and fines

The Information Commissioner’s Office (ICO) has taken enforcement action against two firms for making nuisance telephone calls. Enforcement Notices have been issued to both companies ordering the firms to stop their illegal marketing activity. As well as the notice, Our Vault was also fined £70,000 for making 55,534 unsolicited marketing calls to people who had registered with the Telephone Preference Service (TPS) and had not consented to being contacted by the company.


Consultation re society lotteries

The Department for Culture, Media and Sport is consulting on changes to the rules relating to society lotteries. Currently the amount a society can raise is subject to limits of £4m sales per draw, £10m sales per year and a maximum prize of £400,000. The consultation proposes:

  • allowing a tenfold increase in the amount that a large society lottery can raise per year, bringing the annual limit to £100m.
  • the per draw sales limit would rise to £5m and the maximum prize to £500,000.

The consultation closes on 7th Sept.

Disqualification of director of a fundraising company

A director of CS Fundraising Limited (CSF), a company that acted as a professional fundraiser for charities, has signed a disqualification undertaking banning him from direct or indirect involvement in a company or limited liability partnership for nine and a half years without the permission of the court. At its peak CSF was sending out approximately 150,000 mail donation letters each month, on behalf of charities, for whom it acted as a direct marketing agency. The director admitted misleading the public and holding on to funds collected on behalf of charities, including:

  • Causing CSF to solicit monies from the general public without having in place the necessary agreements under section 59(1) of the Charities Act 1992
  • Causing or allowing CSF to mislead the public in that the solicitation statement used by the company did not comply with the requirements of section 60(1) of the 1992 Act.

He also admitted causing CSF to retain public donations of at least £125,634, which the company had received in its capacity as a professional fundraiser on behalf of a charity.

This is a rare example of non-compliance with the professional fundraiser rules being cited as specific grounds for director disqualification – in this case it seems the Insolvency Service were prompted to act because CSF’s insolvency brought to nine the number of companies to have gone into some form of insolvency where Mr Stoddard had a significant role.

Travel law

On Sunday 1st July, the new Package Travel Regulations came into force. ABTA have published detailed guidance for both consumers and businesses on the updated regulations.


Early years

The Education Secretary has announced a £6.5 million fund to boost social mobility through projects supporting children who need the most help with early language and speech skills. For example, parents who need help teaching their children reading, writing and language skills will get practical help such as home visits and online tools.


The Department for Education has reissued its guidance on gender separation in schools. This non-statutory guidance is for mixed schools (maintained, academies and other independent). This follows the Court of Appeal’s judgment in HM Chief Inspector of Education, Children’s Services and Skills v the Interim Executive Board of Al-Hijrah School.

Further Education

An “innovative multi-million pound fund to boost the quality of education offered across the further education sector” has been launched by Skills Minister. Colleges that need support to improve will be able to apply for a grant to work with a stronger ‘partnering’ college and together they will create an action plan to tackle the issues they face.

Higher education

The Universities Minister has announced a new package of measures on student mental health including:

  • The development of a University Mental Health Charter which will set new standards to promote student and staff mental health and wellbeing.
  • The set-up of a Department for Education-led working group into the transition students face when going to university, to ensure they have the right support, particularly in the critical in their first year transition.
  • Exploring whether an opt-in requirement for universities could be considered, so they could have permission to share information on student mental health with parents or a trusted person.

Health and social care

Last month a range of organisations co-signed a letter to Baroness Stowell, Chair of the Charity Commission, asking her to raise the issue of sleep-ins back payment with government.

The government has announced £215 million investment in NHS health research and an additional £3 million for a new research leader programme for nurses and midwives.

The House of Commons Housing Communities and Local Government and Health and Social Care Select Committees (committees) have published a joint report  calling for the introduction of a “social care premium” (imposed on all adults above the age of 40), as a sustainable funding solution for adult social care. The Local Government Association in its response  to the report, has welcomed the committees’ findings stating that all funding options should be up for discussion.

A new NHS app (due to be available in December) will give patients safe and secure access to their GP record. Patients will be able to use it to:

  • make GP appointments
  • order repeat prescriptions
  • manage long-term conditions
  • access 111 online for urgent medical queries.

Patients will also be able to use the app to state their preferences relating to:

  • data-sharing
  • organ donation
  • end-of-life care.

Social Value Act

Civil Society Media reports that during a speech by David Lidington, Minister for the Cabinet Office and Chancellor of the Duchy of Lancaster, at the Reform think tank, he announced plans to amend the Social Value Act so that all major procurements will now have to “explicitly evaluate” social value benefits.

Mutuals/employee owned

The Employee Ownership Association is calling on the government to invest in growing employee ownership in the UK economy with the aim of having 3 million employee owners by 2030. The call came on the back of the launch of “Ownership Dividend”, the recently published evidence report of the Ownership Effect Inquiry.


The government has announced around 23,000 new affordable homes will be delivered through a £1.67 billion government investment deal. This will include at least 12,500 social rent homes in high cost areas in a move to support families struggling to pay their rent.


See under Scotland below.

Company law

The CEO (and director) of an insolvent charitable company Broken Rainbow LGBT Domestic Violence Service (UK) Limited (Broken Rainbow) has been disqualified from acting as a company director for three-and-a-half years after giving a disqualification undertaking to the Insolvency Service. The CEO accepted she had paid herself salary and paid other creditors while at the same time failing to pay the charity’s PAYE debt.

See above under Fundraising for disqualification of a director of a professional fundraising company.

Bribery Act

The House of Lords Select Committee on the Bribery Act 2010 (BA 2010) has issued its call for evidence. Although the committee is keen to receive submissions on any issues relating to the operation of the Bribery Act 2010, it particularly welcomes submissions on the nine questions set out in the call which include:

  • Whether the Bribery Act 2010 is deterring bribery in the UK and abroad and being adequately enforced without unintended consequences.
  • Is the statutory guidance on the Bribery Act 2010 sufficient, clear and well-understood by all those who have to deal with it and should alternative approaches be considered?
  • whether lessons could be learned from anti-corruption legislation in other countries and the particular impact of the Bribery Act 2010 on small and medium enterprises.

The deadline for responses is Tuesday 31 July 2018.


The Scottish government has published a consultation which proposes removing business rates relief from most independent schools from April 2020, and also to restrict rates relief for community sports clubs to ‘affordable’ clubs. The consultation closes on 17 September.

Also see final item under Charity Commission above.

Northern Ireland

See final item under Charity Commission above.



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 July 3, 2018.