Bates Wells Briefing for Charities & Social Enterprises | 11 September

Bates Wells highlights

Charities, Social Enterprise

The recent inaugural meetings of the Bates Wells Safeguarding Best Practice Group explored the tension between the tightening of requirements on data management on the one hand, and the requirements for information sharing in connection with safeguarding and the management of staff misconduct on the other. See today’s Briefing for details of the issues discussed and a summary of reflections following the meetings.

At a glance

Charity Finance Group has published a “Cost Benefit Analysis of Brexit for Charities”.

The Fundraising Regulator has announced a consultation on a revised version of the Code.

The government has announced 22 projects which will be funded through a Social Impact Bond, via the Life Chances Fund.

The Electoral Commission is conducting a survey on its guidance for non-party campaigners.

Charity Commission

CC enquiry form

In order to use the Commission’s general enquiry form for a registered charity, you now have to upload a copy of the charity’s governing document before you can proceed to complete the enquiry form.

Notice of winding up

The Commission has issued public notice of its intention to wind up the charity Console Suicide Prevention Limited (1153096) under section 84B Charities Act 2011. The charity has been under statutory inquiry since July 2016 due to the charity’s link with a charity established in the Republic of Ireland which was subject to High Court action to appoint a liquidator following allegations of financial mismanagement. The Commission says that in July 2017 the trustees of the charity advised the Commission of their decision to wind up the charity; however the Commission is not satisfied that they have taken sufficient steps to do so, so has now stepped in with the notice of its intention to wind up the charity.

Inquiry reports

1st Knight Military Charity

The Commission has published the results of its inquiry into 1st Knight Military Charity (1158071) (and see also the press release). The charity was placed under statutory inquiry in November 2016 following a television programme which showed undercover footage of the sale of offensive merchandise from the charity’s shop, as well as anti-Islamic comments from a trustee and a volunteer. In February 2018, the Commission issued an order, exercising its legal powers to direct the trustees to wind up and dissolve the charity. This order directed the Trustees to transfer any remaining property to a charity with the same or similar purposes. The Commission identified such a registered charity which was willing and able to apply residual funds to provide support to wounded veterans and their loved ones, via evidence-based physical and psychological recovery programmes.

The Veterans Charity

The Commission has also published its inquiry report into The Veterans Charity (1123149) (see also the press release). The Commission concluded that the trustees of the charity at the time the inquiry opened were responsible for mismanagement in the administration of the charity; this included poor governance, the failure to implement effective financial controls or maintain adequate financial records and failure to exercise reasonable care and prudence in relation to some of the charity’s fundraising activities which exposed the charity to undue risks. However, the inquiry was also satisfied that the charity was undertaking vital specialist work to provide urgent short term support for veterans in need. It therefore sought volunteers from the charity sector to assist in the charity’s reconstruction alongside the original trustees, rather than looking to remove and disqualify those original trustees.

The charity’s governance and administration was successfully regularised by the new board – this included the amendment of the charity’s governing document, drafting new governance and fundraising policies and procedures and the implementation of strategies to enable the charity to continue operating. The Commission says that this collaborative model with sector professionals is something it would like to see further developed to assist the reconstruction of certain charities which are in difficulty.

Case report – trustee decision making

The Commission has published a case report about Imamia Mission London (UK) (269886) a charity operating a place of worship and community centre for Shia Muslims. The Commission received complaints (including a protest outside the Commission’s London office) from those opposed to the charity disposing of its property in Newham and replacing it with a new property in Ilford, about 4 miles away. The Commission found that the charity did have the power to dispose of its property and replace it with one in a different geographical location and that there was no evidence of financial irregularities. However, the Commission did criticise the decision making process by the trustees. Although the decision to move to a new property did not fall beyond the range of decisions a trustee body could reasonably make, the Commission was concerned that because the trustees had failed to properly communicate and consult with members of the charity or beneficiaries about the relocation, they may not have complied with the principles of (i) making sure they were sufficiently informed and (ii) taking account of all relevant factors (one of which should have been the views of the charity’s members and beneficiaries). The Commission issued the trustees with regulatory advice in the form of an Action Plan.

Charities working internationally

The Commission has posted a blog about the responses it received to the survey it ran in the spring asking international charities if its guidance met their needs. The Commission says it will use the feedback to update the Compliance Toolkit, which contains guidance on most of the risks faced by these organisations. In addition, there are plans to develop new resources formats which are brief, clear and efficient in their style such as short briefing documents, ‘key questions to ask’, ‘top 10 tips’ regulatory alerts and model templates.

Interim manager appointment

The Commission has announced the appointment of an interim manager of Hope House School Limited, to the exclusion of the trustees. The Commission states that the appointment is due to continued concerns about the governance, management and administration of the charity, which runs an independent school for autistic children. It also says that part of the IM’s duties will be to establish the viability of the charity and determine the most appropriate option regarding its future.

Charity law cases

In the First Tier Charity Tribunal Mr Hopkiss, trustee of the Human Organ Preservation Research Trust, has successfully appealed against a 2017 order of the Charity Commission removing HOPRT from the Register. The Commission had removed HOPRT on the grounds that it had been entered on the Register in 1991 by mistake – there being in the Commission’s view insufficient evidence that it was established for exclusively charitable purposes. The Tribunal disagreed and has now ordered the Commission to rectify the register by restoring HOPRT to it. The Tribunal has remitted to the Commission:

  • Considering whether any regulatory advice is needed in relation to HOPRT’s activities; and
  • Whether it would be permissible for HOPRT to adopt amended objects.


The recent inaugural meeting of the BWB Safeguarding Best Practice Group explored the tension between two key developments facing the charity sector today. Namely, the tightening of requirements on data management on the one hand, and the requirements for information sharing in connection with safeguarding and the management of staff misconduct on the other. The key themes explored were:

  • internal information flows: governance and mechanisms to ensure that that required information reaches the trustees;
  • transparency generally;
  • sharing safeguarding-related information with other organisations;
  • reporting externally to authorities;
  • references; and
  • data retention.

The meetings of the group were held under Chatham House rules, but it was agreed that reflections following the meetings would be compiled and shared for reference.

Click here to download the full reflections document.


Charity Finance Group has published a “Cost Benefit Analysis of Brexit for Charities”. See this summary by Civil Society Media.

Data protection

ICO fines

The Information Commissioner’s Office (ICO) has fined Everything DM Ltd (EDML), based in Stevenage, £60,000 for sending 1.42 million emails without consent.


Consultation on revised Code of Fundraising Practice

The Fundraising Regulator has announced a consultation on a revised version of the Code. The consultation focuses on the style, presentation, clarity and accessibility of the Code. The consultation does not propose to make fundamental changes to the standards within the Code, except where a standard may be identified as an unnecessary repetition or contradiction of a rule elsewhere in the Code, where the meaning is unclear or where it is found to be inaccurate in relation to UK law.

The new draft which includes a new table of contents and a simpler ordering of the Code’s content, which:

Identifies two key parts to the Code: “rules relevant to all fundraising” and “rules relevant to specific fundraising practices”. The new draft also combines the twenty sections of the Code, fourteen legal appendices and three rulebooks and simplifies these into three sections– “General Rules”, “Working with Others” and “Fundraising Methods”.

Responses can be made by completing an online survey or by email. The consultation closes on Friday 16 November 2018.


See here for a summary of the Institute of Fundraising’s response to the recent society lotteries consultation.


Early years

On 31 August 2018, the Department for Education published a revised version of its statutory guidance on disqualification under the Childcare Act 2006. The guidance has been updated to reflect the new legislative regime under the Childcare (Disqualification) and Childcare (Early Years Provision Free of Charge) (Extended Entitlement) (Amendment) Regulations 2018 (SI 2018/794), which came into force on 31 August 2018. The revised guidance now includes:

  • Details of the changes to the childcare disqualification arrangements made by the new regulations (Annex A).
  • An explanation of how Ofsted waiver applications prior to 31 August 2018 should be considered (Annex B).


The Department for Education has also updated:

According to a government press release, new statistics show that sponsored academies are helping drive up standards in primary schools.

Last month Kent County Council was fined £200,000 for a health and safety breach at a school. On 6 November 2014, an environmental health officer noticed what looked like asbestos rope hanging from the ceiling of a primary school. An investigation by the Health and Safety Executive (HSE) found that the asbestos flue and rope had been attached to a steriliser unit that had been disturbed when the steriliser unit was removed by the caretaker some 18 months previously. The HSE found that the council failed to effectively prevent exposure and failed to provide suitable training to those liable to be exposed to asbestos. Neither the caretaker nor the head teacher had any asbestos management or awareness training.

Adult education

The government’s integrated communities English language programme, set to begin next April, aims to tackle one of the key causes of poor integration, a lack of English language skills. Councils, charities and other providers will have the opportunity to bid for funding to run new programmes which offer creative ways of teaching English to local residents.

Youth services

Minister for Civil Society Tracey Crouch has announced a new £5 million fund will increase places in uniformed youth groups to reach vulnerable young people and allow for expansion in deprived areas. An estimated 5,500 spaces will be created in groups such as police cadets, Scouts, Guides and faith-based organisations to help reduce waiting lists.

Social finance

The government has announced 22 projects will receive a proportion of the £48 million Life Chances Fund. Each project will be funded through a Social Impact Bond. See here for a full list of successful applicants.

The government has also announced changes to help small businesses raise finance. Currently a small supplier’s contract with a larger company may prevent it from securing invoice finance from providers such as banks and other investors. Under proposed new laws, any such contractual restrictions entered into after 31 December 2018, with certain exceptions, would have no effect and could be disregarded by small businesses and finance providers.

Graham MacKay (CEO, Bond) and Tim Boyes-Watson (Global Director, Humentum) reveal the piloting of a new model for DFID grant funding to ensure charities receive full cost recovery on their activities. The new model intends to calculate Non-Project Attributable Costs (NPAC), exclude inapplicable costs from NPAC, allow organisations to include adjustments to the historic cost structure, and apportion NPAC based on a fair share of project expenditure. This will result in DFID agreeing a lump-sum of the NPAC payable for each year of the grant.

Gareth Jones (Editor, Charity Finance, Civil Society) notes the importance of funders within the charity marketplace and identifies specific issues faced by charities in relation to their funding needs. This includes, for example, the funding of core costs.

Melanie Mills (Social Sector Engagement Director, Big Society Capital (BSC)) writes for BSC’s blog about Let’s Talk Good Finance – events organised by BSC to learn and talk about social investment in your region. This blog post also includes seven lessons learned by those who have already done it. This includes, for example, that social investment is not benevolent money. Melanie also provides further information on Good Finance – a website which provides social enterprises with information about who offers what and where.

Impact Entrepreneur Center and Rockefeller Philanthropy Advisors have produced a report on their recent international leadership summit, Philanthropy Transforming Finance: Building an Impact Economy. The summit drew four dozen individuals from three continents who are leaders across the themes of systems thinking, philanthropy, impact investing and “new economy” models. You can request a free copy here.

Charity Finance has published an article by BWB’s David Hunter focusing on recent changes to the Public Services Act and how they impact on charities and social enterprises. David’s article is currently only available in hard copy.

International development

See under Social Finance above.

BOND has summarised four funding announcements from the Prime Minister’s recent trip to Africa.


The Electoral Commission is conducting a survey on its guidance for non-party campaigners. The survey is to inform new guidance for non-party campaigners being prepared by the Electoral Commission.

The Government has published its response to its Call for Evidence on how disabled people experience registering to vote and voting, setting out a list of 17 recommended “actions”.

Isle of Man

The Isle of Man government is consulting on changes  to its charity legislation. The consultation closes on 5 October 2018.

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 September 11, 2018.