Bates Wells Briefing for Charities & Social Enterprises | 9 July

Bates Wells highlights

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Charity
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Update

What are the implications of the latest publications on cookies and Adtech from the Information Commissioner’s Office? Today’s Briefing has a link to a detailed article by Bates Wells’ Head of Privacy, Victoria Hordern.


At a glance

The Charity Commission has published its annual report for the financial year ended 31 March 2019.

The European Court of Justice has held that the University of Cambridge could not deduct input tax incurred on investment fees paid to managers of its endowment fund as part of its general overheads.

Theos has published a report “Faith and belief on campus:  Division and cohesion”. 

The Court of Appeal has upheld a High Court decision that a charitable housing association had not unlawfully discriminated against non-Orthodox Jewish applicants or breached the Equality Act 2010 by allocating social housing only to members of the Orthodox Jewish community.

The Scottish government has published its analysis of responses to the recent charity law consultation.  


Charity Commission

Annual report and accounts 2018-19

The commission has published its annual report for the financial year ended 31 March 2019.

Annual public meeting 2019

The commission will hold its next annual public meeting on 3 October 2019, in Bristol. Tickets have already sold out for the event, but it is possible to join the waiting list.

New inquiries

The commission has announced that it has opened inquiries into two separate grant-giving charities with common trustees. The inquiries will consider whether conflicts of interest and connected party transactions have been properly managed, whether there has been unauthorised private benefit, and the extent to which there has been compliance with reporting and accounting obligations.

The commission has also announced that it has opened an inquiry into funds held by an unregistered organisation, Sikh Youth UK. The matter was brought to the commission’s attention by West Midlands Police. The inquiry will look into the financial management of the funds, whether those in control of them have complied with their duties under charity law, whether funds have been used for private benefit and also whether the organisation is a charity in law and therefore should have been registered.

Inquiry reports

Name of charityBrief descriptionAnything unusual e.g. unusual facts or novel/rare use of Commission’s powers
The Islamic Educational Society of Blackburn
Also see press release.
The charity was part the class inquiry of “double defaulters” and was removed from that inquiry when the trustees complied with their annual accounting obligations. However, they were subsequently in defaults again so the commission opened a new statutory inquiry.The Inquiry issued an Official Warningto the trustees of the charity. The warning relates to the non-submission of accounting information, inadequate financial controls, not correctly identifying restricted funds and acting outside the charity’s object by building a mosque without amending the governing document. The list of actions the trustees should take to rectify matters relates to these failures, but also includes an action to report any serious incidents promptly to the commission. 

Charitable trusts

We mentioned in previous weeks that Bates Wells responded to a recent HM Treasury consultation which would mean all charitable trusts have to register. See here for the joint response to the consultation from ACF, NCVO and CFG.  The key message is about the importance of engaging with charity representatives throughout the process of implementing the Directive, in order to minimise any regulatory burden.


Charity law cases

There is a new appeal in the First Tier Charity Tribunal brought by Abraham Soloman. No details given.


Tax and VAT

Investment fees

The European Court of Justice has held, following a referral from the Court of Appeal that the University of Cambridge could not deduct input tax incurred on investment fees paid to managers of its endowment fund as part of its general overheads. The First-tier and Upper Tribunals previously decided in the university’s favour.

Bates Wells’ Bill Lewis comments “This decision has caused consternation and does not appear to take into account the full effect of previous case law.  We will report back further on this in future Briefings.


General

Civil Society Media reports charities leasing property from local authorities are starting to receive requests to prove their social impact.  


Brexit

Education

The government has announced EU nationals coming to the UK for postgraduate studies now have guarantees for funding for studies starting in 2020.


Data protection

First ICO fine under GDPR

The ICO has issued a notice of its intention to fine British Airways £183.39 million for infringements of the General Data Protection Regulation (GDPR).  The proposed fine relates to a cyber incident notified to the ICO by British Airways in September 2018. This incident in part involved user traffic to the British Airways website being diverted to a fraudulent site. Through this false site, customer details were harvested by the attackers and personal data of approximately 500,000 customers were compromised. The ICO’s investigation has found that a variety of information was compromised by poor security arrangements at BA, including log in, payment card, and travel booking details as well name and address information.  BA now has an opportunity to make representations to the ICO as to the proposed findings and sanction, after which the ICO will make its final decision.

Cookies

The Information Commissioner’s Office (ICO) has published its long awaited new guidance on the use of cookies and similar technologies, as well as an associated blog.  The guidance addresses cookies and similar technologies in detail and is relevant to any organisations operating online services such as websites or mobile apps. It explains what cookies are, the rules on cookies and how these relate to the General Data Protection Regulation ((EU) 2016/679) (GDPR), and provides detailed compliance advice (for example on topics such as use of message boxes, features and settings-led consents, cookie walls and use of third party cookies).  

Bates Wells’ Head of Privacy Victoria Hordern comments “Any organisation that operates a website (so most of us!) or uses some form of online advertising (including for fundraising) should take note of this new Cookie guidance and the recently published guidance on Adtech.” Victoria explains more in this article.  


Fundraising

Legacies

Civil Society Media reports HM Courts and Tribunals Service has announced an interim arrangement with Smee & Ford so that charities can continue to receive alerts about money that has been left to them in wills, but should expect the costs to increase.  See here for an open letter from HMCTS to charities explaining that Smee and Ford will now have to pay a statutory fee for all wills and grants from August 2019.  By contrast, probate copy fees charged to individuals will be reduced.


Education

See under Brexit above.

Early years

Last week the Education Secretary Damian Hinds:

  • launched a new three year ‘Hungry Little Minds’ campaign to give parents access to video tips, advice and suggested games to help with early learning;
  • announced up to 1,800 new school-based nursery places, to be created in disadvantaged areas so more children can access high-quality early education, backed by a £22 million investment; and
  • set out the criteria for high quality educational apps that parents can use with their children, including promoting interactive learning and play.

Schools

The Department for Education (DfE) and the Department of Health and Social Care have published non-statutory guidance on reducing the need for restraint and restrictive intervention in relation to children and young people with learning disabilities, autistic spectrum conditions and mental health difficulties at risk of restrictive intervention. Alongside the guidance, the DfE has also published a consultation seeking views on whether there is a need for further guidance on the use of restraint and restrictive intervention in mainstream schools, mainstream post-16 settings and educational settings offering alternative provision. Responses to the consultation should be submitted via the consultation’s online response form by 17 October 2019.

The DfE has published a manual for schools on buying procedures to help them ensure value for money and compliance with procurement law more generally.

The government has announced £500,000 funding for a new scheme to identify opportunities in independent schools for young people in care.  Opportunities could include places at the private schools, as well as mentoring and access to sports and music facilities

The government’s new mental health and wellbeing advisory group has met for the first time to discuss support for teachers and college staff.  Separately a group of education experts is to provide support for head teachers on training, appraisal and recruitment. 

Higher education

The Equality and Human Rights Commission has published David Isaac’s speech on freedom of speech in educationwhich was delivered on Thursday 4 July 2019. Isaac was speaking at the launch event for think tank Theos’ report ‘Faith and belief on campus: Division and cohesion’ (see here for an executive summary of the report). Theos’ report touches on a number of issues which will be relevant for student unions, universities and faith groups. We will report back in more detail in next week’s Briefing.

Qualifications that sit between A Level (Level 3) and degrees (Level 6), such as CertHE, DipHE and foundation degrees (Level 4 and 5) – are to be rebadged as Higher Technical Qualifications and quality approved, in a drive to attract more students to study them.

The Universities and Science Minister has confirmed an additional £91 million for university-led research.


Health

The House of Commons Health and Social Care Committee has published the 15th report of session 2017-19concerning the legislative proposals under the NHS’ long-term plan.

NCVO has published this blog “The future of health and social care – conclusions from the Joint VCSE review”.


Social finance

Impact Finance Bulletin: Public pressure leads to new Climate Endowment. Pioneers Post round-up of impact finance news in the UK and further afield, including: the launch of a Climate Endowment to enable institutional investors to allocate more capital to renewable energy and cleantech; Unity Trust Bank and Charity Bank’s £8.5m loan for dementia care, and North East Innovation Fund providing £300k equity funding to tech-for-good company Donr.

Mind the Gap! Five ways to accelerate investing for impact. Sumerian Foundation co-founder, Chris West, discusses the mismatch between the growing supply of impact investment and the needs of social purpose organisations (from the EVPA/Pioneers Post Impact Papers series).

Prize-linked savings scheme for credit unions – pilot participants announced. The scheme is delivered by HM Treasury and fintech Incuto with the aim of helping people increase their financial resilience while boosting awareness and membership of credit unions.

Boost for Charity Bank with £5m deposit from Power to Change. The purpose of the deposit is to increase lending capabilities and improve access to finance for charities and social enterprises.

EU Council and Parliament publish response to proposed regulation on crowdfunding platforms. The proposed regulation on European crowdfunding service providers sets out a new regulatory framework for the operation of these platforms (press release).


Social impact

This great video ‘Lawyers at the Heart of the Impact Revolution‘, captures insights, themes and atmosphere from the Esela Annual Conference 2019 which took place earlier this year in April. Esela is the legal network for social impact.  The conference convened lawyers, investors, entrepreneurs and academics for an in-depth look at the role of law and lawyers in the impact revolution.


Social value

See here for the NCVO response to the recent government consultation on social value in procurement.  It was submitted jointly with Charity Finance Group and Small Charities Coalition.


Communities

Transforming Places Through Heritage is a new £15m fund from the Architectural Heritage Fund to rejuvenate high streets, offered through five different grant streams of up to £350,000 for schemes that will reuse historic properties. Third Sector reports that the funding is part of a £62m grant from the DCMS to regenerate city and town centres.


Enivronment

The Department for Business, Energy and Industrial Strategy has published the government’s Green Finance Strategy, Transforming finance for a greener future.


Housing

The government has published guidance for councils in preparing planning policies on housing for older and disabled people. The guidance aims to ensure that such considerations in housing are made at the planning stage rather than relying on much more costly adaptations to already-built housing.   The guidance includes how to identify the housing requirements for a local area, the potential types of specialist housing, and the planning and design considerations that may be necessary.

See under Equalities below.


Faith based organisations

See first item above under Education, Higher education. 

The Places of Worship Protective Security Funding Scheme, now in its fourth year, is open for this year’s applications.  It is now worth £1.6 million, after the Home Secretary doubled the amount available from last year in the wake of the Christchurch terrorist attacks.  For the first-time, associated faith community centres will be able to apply for the fund and in a change to previous years, applicants will no longer be required to show they have already experienced hate crime and will be able to apply if they can show they are vulnerable to hate crime. 

Last month the government introduced the Divorce, Dissolution and Separation Bill into the House of Commons.  For the latest on progress of the Bill, see here

See below under Equalities and Scotland.


Volunteering

NCVO reports Sport England, Pears Foundation, Greater London Authority and the Scouts Association have agreed to fund a new research project on the links between family and volunteering.

NCVO has also published these reflections on corporate volunteering.


Campaigning

The House of Commons’ Digital, Culture, Media and Sport Committee has responded to the government’s white paper on Online Harms published in April 2019 which was published shortly after the Committee’s own report on disinformation and fake news in February 2019. The Committee is generally pleased that the government has taken up a large number of its recommendations but the Committee considers that the white paper focuses insufficiently on electoral interference and online political advertising.  


Procurement and state aid

See under Social value above.


Equalities

See first item above under Education, Higher education. 

The Court of Appeal has upheld a High Court decision that a charitable housing association had not unlawfully discriminated against non-Orthodox Jewish applicants or breached the Equality Act 2010 (EqA 2010) by allocating social housing only to members of the Orthodox Jewish community. (R (Z and another) v London Borough of Hackney and another [2019] EWCA


Scotland

The Scottish government has published its analysis of responses to the recent charity law consultation.  OSCR has commented on the consultation report, expressing disappointment that there is no indication that the consultation will result in a reform bill for charity law in this session of Parliament. However, it has welcomed the Scottish Government’s announcement of a working group on changes to the Scottish Charitable Incorporated Organisations (Removal from the Register and Dissolution) Regulations 2011, with a view to bringing forward amendment regulations before the session ends. Bates Wells’ solicitor Amanda Ogilvie, who is dual qualified in Scotland and England and Wales, comments “Broadly speaking, the report acknowledges that the Scottish government should minimise inconsistencies in charity regulation across the UK – and that a more consistent approach would have a positive impact on England and Wales charities which are also registered in Scotland (cross-border charities). The report also notes that some of the additional regulatory measures proposed should only apply to charities if their principal regulator is in Scotland.  Helpfully, a number of points raised by the Charity Law Association working party in which I took part have been picked up, in particular, our comments regarding the proposal for charities registered with OSCR to be required to have and maintain a physical connection with Scotland.  We flagged that cross-border charities should not lose their OSCR registration if they do not have premises in Scotland; and that more definitive guidance should be provided as to what activities trigger the need for cross-border charities to register with OSCR. The report states that discussions will be ongoing between the Charity Commission, OSCR and the Scottish government to ensure that risks to charities registered in England and Wales and operating in Scotland are identified and managed appropriately.”

Bill being introduced to the Scottish Parliament in the autumn will ensure mixed sex couples and same sex couples have the same choices of marriage or civil partnership.


All content on this page is correct as of July 9, 2019.