Bates Wells Briefing for Charities & Social Enterprises | 28 April

Bates Wells highlights

Services
Charity
Sectors
Charities, Social Enterprise
Type
Updates

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At a glance

The Charity Commission has published new guidance on managing financial difficulties caused by coronavirus.   

The government has announced loneliness is to be a priority category of the £750 million charity funding package.

Dan Corry, Chief Executive of NPC has written about why the lockdown exit strategy is crucial. 


Government coronavirus funding

Digital, culture, media and sport secretary Oliver Dowden has announced loneliness is to be a priority category of the £750 million charity funding package:

  • Smaller, community-based organisations in England helping people to stay connected in local communities will benefit from being a priority category of the £750 million package of support for charities announced by the Chancellor on 8 April.
  • National loneliness organisations will be allocated a guaranteed £5 million worth of funding to continue and adapt their critical work at this time.

And last week Oliver Dowden gave evidence to parliament’s DCMS committee – NCVO has reported some points made about government funding of charities: 

  • Charities working directly on coronavirus will be prioritised – one of the criteria for funding from the National Lottery Communities Fund will be that organisations are working directly on providing support for coronavirus. It seems charities outside of this will be expected to seek funding from government departments.
  • Charities will be expected to make use of reserves first
  • The government still wants other schemes and philanthropy to fill the gaps.

Last week the government launched a new coronavirus business support finder tool which is a web-based questionnaire leading to information as to whether a business is entitled to support from any of the government’s schemes.

Also see under Northern Ireland below.


Charity Commission

New coronavirus guidance

Last week the Commission published new guidance “Manage financial difficulties in your charity caused by coronavirus”. The guidance has this useful paragraph about decision making and risk taking: “As trustees you will generally be protected when you have carefully applied your skills and experience to decisions and taken advice when needed. We recognise that these decisions will often be difficult, that there may not be an obvious ‘right’ decision, and that charities will be exposed to higher levels of risk than in more normal times.” 

New inquiry

The Charity Commission has opened a new statutory inquiry into a housing and homelessness charity, The Ashley Foundation, over serious financial concerns, including purchases of luxury goods on the former CEO’s personal credit card, which were reimbursed by the charity.

Inquiry report

Name of organisation

The Public Safety Charitable Trust Limited (1138450)

Inquiry report

CC press release

Brief description

The charity was set up to broadcast public service messages to communities via Bluetooth equipment situated close to shopping centres across the country.

The charity leased approximately 2000 empty properties and placed the Bluetooth equipment in them to broadcast information to passersby about crime in the area. The charity claimed the 80% mandatory charity relief on the Business Rates levied on the properties, and in most cases the further 20% discretionary relief on the basis that the properties were occupied for charity purposes. The landlords of the properties would make a donation to the charity.

In 2013 the Court of Appeal found that solely operating Bluetooth transmitters in premises was not sufficient for charitable purposes. As a result of this judgement, the charity became liable for approximately £17 million in business rates on the premises it leased.

Anything unusual e.g. unusual facts or novel/rare use of Commission’s powers

After initially opening a regulatory compliance case, the commission opened a statutory inquiry in 2013 following the Court of Appeal decision. Shortly afterwards, the inquiry was put on hold when a compulsory liquidation petition was issued by the Insolvency Service, with the Official Receiver later being appointed as liquidator of the charity. The Inquiry was resumed in January 2020.

One director was disqualified for 9 years in May 2017 and the other for 5 years from July 2015 from acting as company directors in accordance with the criteria set out in the Directors Disqualification Act 1986. As a consequence they were disqualified from being trustees or holding a senior position at a charity, for the same period.

The charity will be removed from the register of charities once the liquidator’s final report and forms are submitted to Companies House to dissolve the company.

Safer giving

As Muslims enter the month of Ramadan, the Charity Commission is encouraging donors to take simple steps to ensure their donations reach the intended cause.


Tax

Charity Tax Group had raised with HMRC that some Creative Industry Tax Reliefs are contingent upon audited statutory accounts for the entities – and whether there was flexibility to grant these reliefs even if accounts are delayed. HMRC has now responded stating “As the accounts form an integral part of the claim, this is not a condition that HMRC can legally relax.”


General

The sector umbrella bodies are asking all charities to showcase the way they support and improve lives using the hashtag #NeverMoreNeeded in their social media. 

Dan Corry, Chief Executive of NPC has written about why “The lockdown exit strategy is crucial”.

There is interesting insight into how a virtual parliament might work in this NCVO update.  


Fundraising

The Fundraising Regulator has published short guidance “Setting up a Coronavirus appeal: What you need to know”. 

Also see this blog by Zia Salik, Interim Head of Fundraising at Islamic Relief arguing why in times of crisis, community partnerships are ever-more crucial.


Children’s services

The government has announced more than £12 million will be spent on 14 projects across the country to tackle the increased risk some children and young people are facing as they stay at home to reduce the spread of coronavirus. This will include money to pay for individual support for families at risk of domestic abuse, community volunteers to work with families, and continued support for teenagers at risk of exploitation. The money will benefit children in care and care leavers, and will be used to also support vulnerable children’s mental health and to provide practical and emotional help. This includes a package of funding to give young people in some project areas unlimited data on their phones for three months so they can stay connected and prevent them suffering from isolation.


Education

The Department for Education (DfE) has published:

  • new guidance and accompanying information and advice on remote education during the coronavirus (COVID-19) outbreak for local authorities, schools, parents and carers, together with a list of online educational resources.
  • guidance to reduce burdens on educational and care settings, including local authorities, so that they are able to focus on the impact of the COVID-19 pandemic by providing for the children and young people in their care, and looking after the wellbeing of their staff.   The DfE and its agencies have cancelled or paused all but the most essential data collections, services and requests from educational and care settings for the academic or financial year, until 30 June 2020. The data collections and services that are affected are listed in the guidance. Also listed are those data collections that will continue and where applicable, the extended timelines for their submission.  Data collections that are paused will be reviewed and the pause period extended if necessary. A decision on data collections or services that are not due to go live until later in the year will be made in due course.
  • updated guidance on conducting school admission appeals in the light of the COVID-19 pandemic. The updated guidance confirms that the government will be introducing legislation to allow for admission appeals to be heard in a different way.

Health and social care

COVID-19 and the VCSE Mental Health Sector is a live briefing document from the Association of Mental Health Providers which outlines the impact of the pandemic on their members’ services and the people that they work with and for. The paper categorises nine key priority areas that require urgent attention and a response from Government.

A new government campaign, titled ‘Care for Others. Make a Difference’, will look to inspire the public to consider a career in social care.


Social finance

Charity borrowing during the COVID-19 crisis. Bates Wells provides a summary of how different types of charitable entities can check whether they have the power to borrow.

National Emergencies Trust has distributed more than half of £40M raised to frontline charities supporting those most affected by the coronavirus outbreak across the UK.

Week 6 – finding the right routes for repayable investment. Big Society Capital provides an update on its three priorities in this crisis: sharing information, adjusting existing funding, and exploring new funding.

Big Society Capital looks at five ways purpose-led startups are helping to tackle the coronavirus crisis including health services, digital health, and financial tools.  

Pioneers Post highlights five unexpected impact investments in Covid-19 recovery beyond the corporate grant-based funds and government relief programmes.

Introducing Unitus Europe – the new European Philanthropy and Social Investing Impact Hub. With a focus on trans-national and cross-border activities, the hub aims to give guidance and support to suppliers of funding, catalyse and coordinate activities, identify gaps, inspire initiatives, and accelerate supply and match demand.


Faith based organisations

The Church of England has issued comprehensive advice (which it is keeping updated) on Securing and caring for your church buildings during the Covid-19 pandemic.


Environment

The Department for Environment, Food and Rural Affairs (Defra) has confirmed that the proposed ban on plastic straws, stirrers and cotton buds will be delayed until October 2020. The ban, which was due to take effect in April 2020, has been delayed to avoid additional burdens on businesses during the COVID-19 pandemic. Many of the businesses that would be affected by the ban, such as pubs, restaurants and cafes, are closed because of social distancing rules.


Culture and creative

See under Tax above.


Modern slavery

The Home Office has published guidance for businesses about addressing and reporting on modern slavery risks during the coronavirus pandemic. The government has advised that:

  • during the coronavirus pandemic, it is essential for businesses to continue to identify and address risks of modern slavery in their operations and supply chains.
  • Businesses will be allowed to delay publication of their modern slavery statement by up to six months due to coronavirus-related pressures without penalty. A business should state the reason for any such delay in its statement. Businesses are still required to report on the actions they have taken during this period, the government recognising however that new or increased risks may take precedence over previously planned activities.
  • Businesses should use their next statement to show how they monitored risks during this period and adapted their activities and priorities in response. As part of these risk assessments, businesses should consider which parts of their workforce may be particularly vulnerable and keep their board of directors updated on any emerging or heightened risks.

Northern Ireland funding

The Northern Ireland Executive has announced a number of measures to support organisations through the coronavirus pandemic.This includes:

  • a three month business rates holiday for all organisations
  • cash grants for certain organisations in the retail, hospitality and leisure sectors – these include a Sports Hardship Fund which is a £2,000 grant scheme for any organisation delivering sport and physical recreation experiencing short-term financial hardship,
  • a Water and Sewerage bills holiday

These are in addition to the measures that apply on a UK basis.


Disclaimer – The information contained in this update is not intended to be a comprehensive update – it is our selection of the website announcements which we think will be of interest to charities and social enterprises. The content is necessarily of a general nature – specific advice should always be sought for specific situations.


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 April 28, 2020.