Bates Wells Briefing for Charities & Social Enterprises | 26 June

At a glance

Services
Charity
Type
Update
Bates Wells highlights
In this Briefing, Bates Wells’ solicitors Molly Carew-Jones and Hannah Lyons set out some initial thoughts on the new Code of Fundraising Practice due to come into force in October this year.
We launched our new branding this week and this is the first Briefing in our new brand colours, we hope you enjoy it! Do take 5 mins out of your day to explore our new site

NCVO has launched a new toolkit designed to support micro and small charities implement the Charity Governance Code. 

The 2019 edition of the NCVO UK Civil Society Almanac has been published. 

The National Audit Office has published its latest report on how the UK government is managing and spending UK aid.

The National Cyber Security Centre has developed an online learning tool aimed at educating staff at charities about how to protect themselves from potential cyber attacks.  

Charity Commission

Inquiry report/Official Warning

Name of charityBrief descriptionAnything unusual eg unusual facts or novel/rare use of Commission’s powers
Chesed Leyisruel Trust(1141178)The charity, with objects related to the Jewish religion, was previously included in the “double defaulter” class inquiry and a further statutory inquiry was opened when the trustees failed to comply with their accounting obligations again.The inquiry also considered issues relating to the failure to manage conflicts of interest and failure to keep adequate records.Official Warning issued at the end of the Inquiry to two of the trustees of the charity. See also CC Press release

Memorandum of Understanding

The Charity Commission has published its Memorandum of Understanding with the Office for Students (OfS).

Governance

NCVO has launched a new toolkit designed to support micro and small charities implement the Governance Code’s principles.  The toolkit links directly to the Charity Governance Code. It uses the same principles but describes the kind of practice a micro organisation should aspire to implement. There are also links to lots of free tools and resources which can be used and adapted to implement the principles.  As a rule of thumb, this tool is intended for use by charities with an income of less than £100,000 per year with no paid staff.

General

The 2019 edition of the NCVO UK Civil Society Almanac has been published.  For a summary of the findings see this NCVO blog.  The Almanac reports income growth slowed in the charity sector in 2016/17 while the sector’s net assets stood at a record level of £131.2bn.

Brexit

Charity General

Civil Society have published an article which details that fundraisers will be needed within the sector ‘more than ever’ in anticipation of a no-deal Brexit. The article explains that Brexit has had a significant impact on the economy and in turn an impact on financial support within the sector.

Brexit Civil Society Alliance has published a blog entitled ‘Taking Stock: How Ready Are We For No Deal Brexit’ which refers to the Financial Times revealing a leaked Cabinet document which suggests the government is still a long way off being No-Deal Ready.

Third Sector has published an article by Kate Rogers, head of policy at Cazenove Charities, which examines the data on the economic impact of Brexit on the UK economy so far, drawing on recent analysis by Azad Zangana, Schroders’ senior European economist. In this vein, Civil Society reports that Karl Wilding, the incoming CEO of NCVO, has included Brexit in a list of present problems for charities, warning that well run charities are going under; similarly, the Foundation for Social Improvement’s report on small charities facing closure, reported in Civil Society, also details Brexit as a key risk. Charity Times reports that Brexit is a concern for 54 per cent of charities.

UK Shared Prosperity Fund

Communities in Charge, a campaign led by Co-operatives UK, Locality, and the Plunkett Foundation, have published a paper analysing the future of funding and the UK Shared Prosperity Fund (UKSPF) and making a call for the UKSPF to be localised and targeted at communities most in need.

Health and Social Care

PMLive have released an article which details The Health Foundation and The King’s Fund’s views on the cuts to public health spending in light of Brexit.

State aid after Brexit

The House of Commons Library has released a briefing paper called ‘EU State Aid Rules and WTO Subsidies Agreement’. The paper outlines the rules relating to State aid and subsidies, their motivations and differences, as well as possible changes to the regime after the UK leaves the EU. The authors of the report contend that the absence of the EU State aid framework is unlikely to transform the UK into a country that sees higher levels of direct support to businesses, as successive governments have avoided direct subsidising industries. However, they do acknowledge that the loss of this framework may encourage the government to intervene more regularly. If the UK leaves the EU without a deal, the government intends to have the new UK-wide state aid regime functioning by the exit day.

Local Government

The government has published its Response to the Housing, Communities and Local Government Select Committee report on Brexit and Local Government and presented it to Parliament. The Select Committee’s report was published on 3 April 2019, following its inquiry and ongoing “watching brief” on the effects of Brexit on local government.  The response states that the government can “in spirit and principle” accept the Select Committee’s recommendations. 

These include:

  • Maintaining existing channels of communication between central and local government, including regular EU Exit Local Government Delivery Board meetings.
  • Committing to publishing its plans for any further devolution of powers to local authorities after Brexit. The government declined, however, to commit to doing so within a month of Brexit. It has also stated that it does not intend to introduce a further English Devolution Bill, partly given the effects of the Cities and Local Government Devolution Act 2016, but may later explore the possibility of further legislative development.

The government’s response may be broadly encouraging to local authorities that support the Select Committee’s recommendations, but makes few (if any) substantive commitments at this stage.

European Commission

The European Commission has adopted a fifth Communication taking stock of preparation for a no-deal Brexit. The Communication summarises the no-deal Brexit preparedness measures taken by the Commission since December 2017 and highlights areas where it says there needs to be continued and particular vigilance. For more details, see the European Commission’s press release here.

International Trade

The House of Commons Library has published its briefing paper, ‘World Trade in 2019: the US and the World Trade Organization (WTO)‘.The final part of the report addresses the WTO and the UK after Brexit and perceived challenges to the UK approach to rolling over existing EU trade agreements to the UK. There are also concerns about enforcing the UK’s WTO rights at the WTO due to the absence of a fully functional dispute settlement system.

Data protection

The Information Commissioner’s Office has published a report into how personal data is used in real time bidding (RTB) in programmatic advertising. See here for an accompanying blog.

Bates Wells’ Partner Victoria Horden comments “The Update Report won’t go far enough for those challenging the very essence of real time bidding (RTB) in the adtech world since the ICO doesn’t specifically rule this activity out as unlawful. However, the ICO considers the adtech industry is immature in its understanding of data protection requirements and underlines that the industry is not able to clearly demonstrate compliance with the GDPR requirements of lawfulness, transparency and carrying out Data Protection Impact Assessments as well as compliance with the e-privacy rules on use of cookies. Organisations using RTB platforms like Facebook Exchange should note that the ICO is committed to continued scrutiny of RTB especially for use of special category data and complex data supply chains. Further information-gathering is promised by the ICO and potential enforcement cannot be excluded.’

Fundraising

New Code of Fundraising Practice

We flagged a few weeks’ ago that the Fundraising Regulator has published the new Code of Fundraising Practice that will come into force in October 2019.  Bates Wells’ solicitors Molly Carew-Jones and Hannah Lyons set out some initial thoughts on the new Code in this briefing

Lotteries

The latest from DCMS on the reform of society lotteries is that it hopes to respond to the consultation before the summer recess; and the response will include a discussion of the key points raised by stakeholders including Camelot (the National Lottery operator).

Super size grants

Billionaire makes £150m donation to Oxford University. The gift from the American Stephen Schwarzman is believed to be the largest individual gift made to a British academic institution. The university said that the donation from Stephen Schwarzman would be used to create a centre named after the donor and dedicated to humanities, including a new institute for ethics in artificial intelligence.

Philanthropy

See here for an interview with Michael Alberg-Seberich and Filiz Bikmen on Beyond Philanthropy’s new report on European philanthropy infrastructure. 

Education

See under Charity Commission above.

Schools

Education Secretary Damian Hinds has announced further support for vulnerable children, including that:

the schools admission code be changed so that “the most vulnerable children, such as those fleeing domestic abuse” can access a school place more quickly and Improve the sharing of information between councils and schools social workers are informed when a child is excluded from school.

Traineeships

The government has published this press release about traineeships. 

Also see under Environment below.

Health and social care

The NHS Counter Fraud Authority (NHSCFA) has published its priority areas of focus for 2019-20:

  • Pharmaceutical contractor fraud.
  • Procurement and commissioning fraud.
  • Fraud in relation to general practice contractors.
  • Improving fraud outcomes in the NHS.

Social finance

Big Society Capital has released its Annual Review for 2018, revealing £90 million of new commitments were made over the year. Alongside other investors, BSC has also made £1.7 billion available for social enterprises and charities. The landing page for the report provides some commentary

Shifting product: Making social impact investment better. Nesta’s reflections on what characterises useful social impact investment products.

Big Society Capital has published the latest data on social investments made in charities and social enterprises up to the end of 2018. Access highlights three striking stats which show how blended finance is transforming social investment.

2019 Annual Impact Investor Survey published by GIIN provides data and insights on impact investors’ motivations, activities, and perspectives on market progress and remaining challenges.

Bates Wells’ Impact Economy Brief is our fortnightly update, presenting a selection of articles, podcasts and materials, with the latest analysis and developments in the Impact Economy. If you’d like to know more, you can sign-up to the Brief. You may also like to take a look at our Impact Economy Glossary.

Measuring impact

NCVO reports two new guides have been published in the last month to help measure effectiveness in specific subsectors:

  • The Centre for expertise on child sexual abuse have recently published a practical guide on ‘measuring your effectiveness’ for organisations who provide intervention or recovery services for children at risk of or affected by sexual abuse. It provides accessible, step-by-step guidance for organisations including downloadable templates and worksheets.
  • The Center for evaluation innovation have also recently launched a report on evaluation in policy advocacy services. The report proposes six ways to reorient advocacy monitoring and evaluation to be more credible, reliable and useful. Download the report.

International development

The National Audit Office has published its latest report on how the UK government is managing and spending UK aid, also known as Official Development Assistance (ODA).  See here for comment from BOND. 

The World Bank, University of Cambridge and UK tech companies are to partner with DFID to help improve education technology in developing countries by creating an EdTech hub.  The hub aims to create the largest global body of research that looks at how education technology is being used and how this can be improved.

Culture and creative

Philanthropy Impact reports Arts Council England has published the Private Investment in Culture Survey. The survey, commissioned from research consultancy MTM, investigates the role individual giving, business investment and trusts and foundations play in funding arts and culture in England.

Faith based organisations

The Upper Tribunal (Land Chamber) has ruled that a family based in New Zealand has rights over a burial vault beneath a now disused church which was given to the Church of England by their ancestor in 1837. The Diocese had argued – unsuccessfully –  that the family’s rights had been lost due to adverse possession. The Tribunal encouraged the parties to engage constructively with each other to avoid an outcome which might result in destruction of the building, which is Grade II listed.  King & Anor v The Benefice of Newburn in the Diocese of Newcastle (Land Registration – Adverse possession) [2019] UKUT 176 (LC)

The Government has announced that compensation payments made to Jewish individuals transported from Germany on the Kindertransport under a new German government scheme will not be subject to UK inheritance tax, under proposals to be contained in the Finance Bill 2019-2020. 

See under Environment below.

Sport

See under Environment below.

Rehabilitation of offenders

The government has announced new plans designed to boost rehabilitation and reduce re-offending. Through new pilot schemes, more offenders will be diverted towards community sentences in where they will receive treatment for mental health, drug or alcohol issues.  Pilots have already seen an almost 250% increase in those referred for mental health treatment within 18 months and a higher rate of compliance with the terms of an order, just 8% failed to comply with their requirements. The approach will now be rolled out to new sites in London and Greater Manchester.

new report by Lord Michael Farmer on the value of prisoners’ family ties has found that healthy relationships are a ‘must have’ when it comes to preventing women from reoffending.

New Philanthropy Capital has published a new report “Independent, Effective, Humane: The case for funding charities in the prison system”.  

Environment

Rural sports clubs, schools and churches are being encouraged to power their buildings with clean electricity, cut their bills and reduce emissions by applying for grants from the Rural Community Energy Fund (RCEF), a £10 million government fund. Applications for the new scheme will be managed by 5 regional Local Energy hubs across the UK and hosted by a local authority in each area.

Cybersecurity

The National Cyber Security Centre has developed an online learning tool to give workers the skills they need to protect themselves from potential cyber attacks. Aimed at small to medium enterprises, charities and the voluntary sector, the targeted 30-minute programme ‘Stay Safe Online: Top Tips for Staff’ educates users about how attacks happen, where vulnerabilities lie and how to defend themselves.   

Late payment issues

The government has published its response to its call for evidence to tackle late payment issues. The government proposes:

  • to consult on the merits of increasing the Small Business Commissioner’s powers to compel large businesses to disclose information, and to impose fines and binding payment plans on late-paying large businesses.
  • reform of the Prompt Payment Code. 
  • increasing board level responsibility for payment practices, bringing greater transparency to reporting on supply chain finance, and the launch of a new fund aimed at encouraging small businesses to use technology to simplify invoicing and credit management.

Charity property

See under Faith based organisations above.

Scotland

OSCR has published a blogpost about the notifiable events regime (similar to the serious incident reporting regime in England and Wales). The notifiable events regime was introduced by OSCR in April 2016 and since then OSCR has received 320 reports from Scottish charities. The blogpost notes that OSCR is pleased with the way that Scottish charities have responded to the regime and made reports.


All content on this page is correct as of June 26, 2019.