Bates Wells Briefing for Charities & Social Enterprises | 13 February

Bates Wells highlights

Charities, Social Enterprise

Our Breakfast Serial event series will once again be taking place this year. Back by popular demand, these morning events will distill the expertise of our sector-leading lawyers into eleven bite-size seminars. Click here to view the full programme of upcoming events and book your place now!

Have you got an unique solution to a social problem? Apply to the Stephen Lloyd Awards. For more details, please scroll down.

At a glance

The International Development Secretary has published an update on DFID’s work on safeguarding.

The Children’s Commissioner for England has published a report on home schooling.

Two trading subsidiaries of a Scottish charity have been unsuccessful in their appeals against OSCR’s refusal to register them as charities.

Charity Commission

Official Warnings

The commission has also issued an official warning to a trustee of housing charity Expectations UK (1152491) (and see commission press release). This warning has been given directly to a single named trustee under section 75A(1)(a) and is very detailed, setting out a number of governance issues the commission is concerned about and a list of six detailed action points the commission now expects the charity’s trustees to take. The commission’s concerns include this trustee failing to cooperate with the commission, failing to comply with two formal Action Plans and a business plan as evidence of the charity’s financial viability and also decision-making around an emergency loan provided by a company whose director is an associate of a former trustee. The commission has noted in the press release that steps have been taken to address its governance concerns, and that five new trustees have recently been appointed to the charity’s board.

Application to High Court to appoint Official Receiver

The commission has announced that it has made an application to the High Court under section 113(3) of the Charities Act 2011 for an order to wind up the charity Thrift Urban Housing Limited (1072534). The commission says that it considers it to be in the public interest for this charity to be wound up. The commission says that it opened a statutory inquiry into the charity in 2014, which has been examining serious regulatory concerns, including concerns about unmanaged conflicts of interest and private benefit. For various operational reasons the commission has not considered it appropriate to formally announce the opening of the inquiry until now. However, information about the inquiry has been in the public domain since a Tribunal application requesting a review of the commission’s decision to open the statutory inquiry and an appeal against a freezing order against the charity’s bank account. The Tribunal upheld the commission’s decisions to open the inquiry and issue the freezing order.


The commission is publicising a new scheme for charities to become registered advisors to EU citizens applying to settle in the UK, which has been launched by the Office of the Immigration Services Commissioner (OISC).


As you have probably seen, NCVO has announced Stuart Etherington is to step down as chief executive of the National Council for Voluntary Organisations later this year.

Small Charity Week takes place this year from 17 to 22 June.



The European Structural and Investment Funds Common Provisions and Common Provision Rules etc (Amendment) (EU Exit) Regulations 2019 have been published. In the event of a no deal exit, this draft instrument is intended to ensure that projects supported by these funds can continue to operate domestically under HM Government’s funding guarantee.

BEIS is urging UK businesses currently benefiting from Horizon 2020 science and research funding to register their details on an online portal for continued funding.


See above under Charity Commission.


The Department for Education has published new guidance for schools and education providers on how to prepare if the UK leaves the EU without a deal in place.

Additional guidance includes:

Public law

The Public Law Project (PLP) is running a project which aims to scrutinise the Statutory Instruments created to facilitate Brexit, to check they conform to public law standards and do not undermine fundamental rights (the “SIFT Project”). As part of the SIFT project, PLP is eager to establish a network of organisations with subject matter expertise who can help to identify additional problems with Statutory Instruments, be they legal or policy problems. PLP is keen to hear from organisations that would like to be involved in the network or who have been independently scrutinising Statutory Instruments. If you think your organisation could be a suitable network member, please contact Alexandra Sinclair at [email protected].


Ahead of the approaching anniversary of the first media stories about the Haiti case, International Development Secretary Penny Mordaunt has published an update on DFID’s work on safeguarding.

Data protection

Fine for failure to comply with subject access request

Housing developer Magnacrest Ltd has been fined by Westminster Magistrates for failing to provide information to an individual in response to a subject access request. The individual complained to the ICO and the ICO served an enforcement notice on the company ordering it to comply with the law and provide the requested information. When the company failed to obey the notice, the ICO brought a criminal prosecution under s47 (1) of the Data Protection Act 1998. Magnacrest pleaded guilty and was fined £300, with a £30 victim surcharge, and was ordered to pay £1,133.75 towards prosecution costs.

Freedom of information

The Information Commissioner has, in a report to Parliament, recommended extending the access to information regimes under the Freedom of Information Act 2000 (FOIA) and Environmental Information Regulations 2004 (EIR) to a range of entities to which these currently do not apply: private companies including social enterprises, charities, housing associations and self-regulatory bodies. For more see this Briefing from BWB’s Melanie Carter.



Last week we mentioned the Courts service is consulting on replacing the Smee and Ford legacy notification service. See this briefing from BWB’s Leticia Jennings and Jaqui Symcox for more.


Home schooling

The Children’s Commissioner for England has published Skipping School: Invisible Children: How children disappear from England’s schools which examines the implications of home schooling. The report concludes that while many parents elect, for philosophical reasons, to home educate their children, many others are doing so for other reasons and are struggling to cope. Further, it states that there needs to be a cultural shift away from “pressurised, hot-housing schools” which might be encouraging home education when this is not in a family’s interests and against its wishes.


Schools’ Minister Lord Agnew has written to chairs of 28 academy trusts to ask for more details on the pay of executives earning six-figure salaries.

Social finance

The Department for Digital, Culture, Media and Sport (DCMS) has partnered with Social Tech Trust to create a fund for up to £30m of equity investment in ventures that use technology for social good, with the aim of encouraging greater access to capital for such ventures to scale. The DCMS will also support Social Tech Trust’s technical assistance programme, offering non-financial support (access to skills and expertise) to help the ventures establish long-term growth and sustainability.

Bob Thust, member of the Bevy Management Committee, writes for Pioneers Post on the power dynamics and relationships behind good governance in social businesses.


See under Sport below.

Faith based organisations

The government has announced a new Faith Leader Training programme which will “empower faith leaders with the confidence and knowledge to meet the changing needs of their congregations”.

The Divisional Court has held that it was lawful under the Equality Act 2010 for a small, charitable Orthodox Jewish housing association to operate a housing allocation system which had the effect of restricting tenancies of its properties to members of the Orthodox Jewish Community. R (Z and others) v (1) Hackney LBC and (2) Agudas Israel Housing Association [2019] EWHC 139 (Admin) For more see here.


See under Faith based organisations above.

Rehabilitation of offenders

New Philanthropy Capital has launched its new discussion paper: How are charities influencing change in the prison system? This paper shares early findings from conversations across the sector with policymakers, parliamentarians, charities and funders. It also proposes a framework for thinking about how charities bring about change.


Two trading subsidiaries of a charity have been unsuccessful in their appeals against OSCR’s refusal to register them as charities. The First Tier Tribunal for Scotland agreed with OSCR that even though both organisations have charitable objects, neither delivered public benefit – the activities of both organisations were significant trading activities which were not in furtherance of the charitable purposes. Having said that, the Tribunal was concerned to point out that it was possible for a trading subsidiary which made a profit to be registered as a charity, it would depend on its activities. For more see New Larnark Trading Ltd and New Lanark Hotels Ltd.

Stephen Lloyd Awards

Applications are opening on 14 February for the 2019 Stephen Lloyd Awards in search of entrants with an early stage project addressing a social problem in an innovative manner. Anyone with a novel project with a vision for systemic change, are encouraged to apply before 5 April. The Awards provides emerging innovations with the vital encouragement needed to cultivate their ideas and spread their impact. Winners will receive funding of up to £20,000, along with valuable pro bono support from experts in the social enterprise sector.

For full details on the application process and how to apply, please visit or email Mona Rahman at [email protected].

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 February 13, 2019.