Bates Wells Briefing for Charities & Social Enterprises | 14 July

Bates Wells highlights

Services
Charity
Sectors
Charities, Social Enterprise
Type
Updates

Charity governance health check

Charities are required to take account of a wide range of guidance issued by the Charity Commission and other regulators in relation to different aspects of their activities. We can help guide you through self-assessment of your current arrangements and provide a road map towards best practice. Click here to find out more.


At a glance

NCVO’s UK Civil Society Almanac 2020 is now live. 

Charity Tax Group has published summaries of the temporary reduced rate of VAT for hospitality, holiday accommodation and attractions, and how charities can access the Eat Out to Help Out scheme. 

The Department of Health and Social Care has published guidance on maintaining records of staff, customers and visitors to support NHS Test and Trace.

The Chartered Institute of Governance has published guidance on holding shareholder/member meetings under the Corporate Insolvency and Governance Act 2020.

The Police Service of Northern Ireland has announced that street collections can recommence provided collectors ensure there is a metre distance between them and the public.


Sector – general

NCVO’s UK Civil Society Almanac 2020 is now live – data.ncvo.org.uk. Although most of the report covers the financial year of 2017/18, NCVO says it has pulled out what this latest report can tell us about what is happening to the voluntary sector today, and the challenges that voluntary organisations will possibly face in the future.

NPC has published “Estimated income shortfalls for the 2020/21 financial year”.  NPC’s research with a sample of Britain’s largest charities shows that even with government support and cost cutting, charities were on average only able to close the gaping hole in their finances by just 38%.

Council Leaders join business and charity leaders in warning over dire future for local charities. As part of a campaign coordinated by the Quartet Community Foundation, 40+ leaders from the public, private and third sectors across the West of England have signed a letter asking the Government for urgently needed financial support to help the third sector.

More than 60 research scientists have signed an open letter to the Prime Minister asking for urgent funding for UK medical charities, illustrating the impact of the pandemic on these charities’ incomes (BHF press release).


Coronavirus – government guidance

The Health Protection (Coronavirus, Restrictions) (No.2) (England) Regulations 2020 (SI 2020/684) relax the rules on which businesses can open and also prohibit all gatherings of more than 30 people, apart from some limited circumstances as set out in Regulation 5(3). For example, a larger gathering is permitted in a public outdoor place that is operated by (or part of premises used for the operation of) a business, a charitable, benevolent or philanthropic institution or public body as a visitor attraction, provided that the event organiser (which can be a business, charity, a public body or a political body) has carried out an appropriate risk assessment and takes all reasonable measures to limit the spread of the COVID-19 virus during the gathering.

The government has published guidance for the safe use of multi-purpose community facilities. 

The government has also published an FAQ, “What you can and can’t do after 4 July”.


Coronavirus – government schemes, government funding and other funding

Charity Tax Group has published:

  • this summary of the temporary reduced rate of VAT for hospitality, holiday accommodation and attractions; and
  • this summary of how charities can access the Eat Out to Help Out scheme. 

Essential financial support for social enterprises. A new £18.7m fund for social enterprise in the UK has been announced, which will make grants of between £10,000 and £300,000 to help social enterprises during COVID-19 (press release). Pioneer Post provides commentary on the launch.

The School for Social Entrepreneurs has launched a new grant funding programme, Trade Back, to incentivise social impact organisations to trade, while supporting them to rebuild. The scheme is aimed at social enterprises, trading charities and community businesses, and includes a matched funding element, for any increase in trading income above Covid period levels. Pioneers Post provides commentary on the launch.

The COVID-19 Community-Led Organisations Recovery Scheme is a new grants scheme offering funding up to £100,000, for community organisations struggling financially due to the pandemic. The scheme is aimed at organisations delivering services in their local community to support people who are at high risk from Covid-19, with an emphasis on BAME-led or BAME-supporting businesses. There will be a webinar about the fund on 23 July. The scheme is run by Power to Change, Locality, The Ubele Initiative and Social Investment Business on behalf of the National Lottery Community Fund.


Coronavirus – sector regulators

Resolutions in relation to a change of Articles/constitution, and related Articles of Association, can now be filed online via the Companies House emergency filing service.  See this link for the list of what can now be filed online – it’s being updated regularly.  


Coronavirus – test and trace

The Department of Health and Social Care has published guidance on maintaining records of staff, customers and visitors to support NHS Test and Trace. This provides guidance on how organisations can keep a temporary record of staff, customers and visitors for 21 days in a way that is proportionate, effective and manageable. The guidance applies to establishments in the hospitality, tourism and leisure sectors as well as to places of worship, facilities provided by local authorities and close-contact services such as hairdressers, in each case where they are providing on-site services (rather than take-away or delivery). 

The guidance states that no additional information should be collected for these purposes and that advance booking systems can serve as the source of the required information where available. Ideally the information should be recorded digitally but a paper record is also acceptable.

The records should be held for 21 days to support NHS Test and Trace, and then securely disposed of or deleted, although can be retained for other purposes in accordance with the GDPR. Customers and visitors can choose to opt-out.

In relation to data protection, the guidance states that consent is not required and that the data can be requested and shared for public health and safety purposes, however consent is recommended in relation to sensitive personal data (for example in a place of worship or political meeting). Organisations should make clear why the information is being collected and what it intends to do with it, for example by way of a notice at the premises or on a website. The guidance also reminds organisations of requirements in relation to security of personal data, not using information specifically collected for this purpose for marketing or other purposes and ensuring that data subject rights can be exercised.

Note there is also this separate ICO guidance for businesses collecting customer and visitor personal data for contact tracing.


Coronavirus – flexible furlough

See here for the latest update from our Employment team.  


Coronavirus – volunteering

This Wednesday at 10am NCVO is running a webinar “Volunteering in a pandemic: lessons from volunteering organisations”.


Corporate Insolvency and Governance Act 2020 (CIGA)

Shareholder/member meetings

The Chartered Governance Institute (ICSA) has published new guidance (see the press release here) to assist companies holding shareholder meetings under CIGA. 

Application of Moratoriums provisions to CIOs

The Charitable Incorporated Organisations (Insolvency and Dissolution) (Amendment) Regulations 2020 (SI 2020/710) came into force on 7 July. They amend regulation 9 of the CIO Insolvency and Dissolution Regulations to prevent a CIO’s charity trustees from applying for dissolution of the CIO while a Part A1 moratorium is in force.

The Insolvency Service has published guidance on the moratorium process, available here in brief, and here in more detail for insolvency practioners.


Brexit

The Ministry of Justice has issued a consultation on the departure from retained EU case law by UK courts and tribunals. The consultation closes on 13 August 2020.


Charity Commission

New inquiry

The commission has announced that it has opened a statutory inquiry into Humanity Torbay (1175068), a charity which supports homeless people. The commission says it has had to engage with the trustees on several occasions in the past year after some posts on the charity’s social media did not appear to comply with the commission’s guidance on campaigning and political activity. The regulator has also been looking into the charity’s finances after an independent examiner’s report in the accounts for the financial year ending 31 March 2019 highlighted concerns about accounting records.

SORP

The commission has announced that the convenors of the SORP engagement process have been appointed, to support the SORP-making body and the advisory SORP Committee. Full details can be found on the SORP website.


Fundraising

Fundraising Regulator

The FR and Chartered Institute of Fundraising have published this blog Supporting a safe and responsible return to fundraising.

Fundraising Convention

See the following from last week’s online convention:

  • summary of Sir Lenny Henry’s contribution to the opening plenary; and
  • Scott Gray, Rapidata lead and head of payments at The Access Group, takes a look at the impact the coronavirus pandemic has had on regular giving. 

Grant funding

We have just seen that in May 2020 ACF published an updated version of its earlier guidance “Tackling grant fraud”.

Also see under Social finance and impact investing.


Education

The Department for Education has:

  • Published guidance outlining Protective measures for holiday or after-school clubs and other out-of-school settings for children during COVID-19; and
  • Published guidance outlining what funding is available to schools to support them with costs associated with COVID-19. This funding is available to all state-funded mainstream and special schools, as well as alternative provision. Similarly, separate guidance has been published outlining the funding available for other settings, such as early years, children’s social care providers, independent schools and FE and HE.

The High Court has upheld Somerset County Council’s claim for judicial review against the Secretary of State for Education in R (Somerset County Council) v Secretary of State for Education [2020] EWHC 1675 (Admin)The council sought judicial review of a decision made by the South West Regional Schools Commissioner to make an academy order permitting a school to become an academy and join a specified multi-academy trust. The council was involved in a formal review of education provision in the relevant area at the time of the order. The High Court granted a declaration that the decision to approve the school’s application to become an academy and join the MAT was unlawful and held that council was entitled to an order quashing the decision and the academy order.  The court found that the Commissioner:

  • Failed to have regard to the prejudicial impact that making an academy order in respect of the school would have upon the ongoing council review of the educational structure of the relevant area. 
  • Came to an irrational conclusion that there would be no negative impact, in the sense that the Commissioner reached an unsustainable conclusion that there would be no impact on the ongoing review process and also breached the duty to make proper inquiries as to the educational options under consideration by the council. 
  • Failed to meet her duty to consider the viability of the school. Erred in law by failing to give reasons for her decision. 
  • The Commissioner’s decision letter of 19 September 2019 did not contain any adequate reasons for that decision.

Social enterprise

SE100 Health & Fitness Report is a new publication aiming to provide a snapshot of the social enterprise landscape prior to COVID-19 (press release).

Social Enterprise UK response to the Summer Statement. Charlie Wigglesworth, Deputy Chief Executive for Social Enterprise UK, provides the organisation’s official response to the Chancellor’s recently announced economy recovery package, noting the social enterprise sector’s strong track record on job creation and calling for organisations that ‘put society and the planet before profit’ to be front of the queue for support.


Social finance and impact investing

A Plan for Jobs: but is it fairer? In this commentary piece, Social Investment Business’ Policy Lead, Will Thomson, considers the Chancellor’s recently announced package for economic recovery through supporting jobs, and how the principles of the social economy should be embedded in mainstream recovery.

Beyond entrepreneurial capital: why some female founders are choosing to be ‘under-represented’. In a new column for Pioneers Post, Trumpet, social entrepreneur Kelly Brewers makes the case that the difficulties women experience in accessing venture capital are less about a failure of women to put themselves forward, and more about systemic discrimination than needs tobe rooted out.

Investment: The Pillars of Stronger Foundation Practice is a new report from the Association of Charitable Foundations’ “Stronger Foundations” initiative, looking at how investments can be more closely aligned with a foundation’s mission and grant-making (press release).

ESADE Entrepreneurship Institute’s Impact Measurement and Management (IMM) Community of Practice for European Foundations is endorsed by the EVPA as part of its on-going work to help foundations develop their IMM practices, in order to better understand how their activities affect the social purpose organisations they support and their final beneficiaries.


Public services – in-sourcing

NCVO reports the Institute for Government has published a new report on when and how government should bring services back in-house.  The reportidentifies four circumstances in which the government should consider returning a service to the public sector:

  • An unhealthy or uncompetitive market;
  • The need for flexibility to make changes to the service;
  • A lack of government commercial skills to manage an outsourced contract successfully; and
  • A need to improve the service by integrating it with another.

State aid

On 29 June 2020, the European Commission announced that it has decided to adopt a third amendment to the Temporary Framework for state aid measures to support the economy in the context of the outbreak of the 2019 novel coronavirus disease (COVID-19).  The Commission has also decided to provide incentives for private investors to participate alongside the State in recapitalisations, so reducing the need for state aid and the risk of distortions to competition. In particular, certain conditions set out in the Temporary Framework (such as the acquisition and dividend ban and cap on remuneration) will be relaxed where private investors contribute to the capital increase of companies alongside the State. The amendment to the Temporary Framework also clarifies that state aid shall not be granted on the condition of the relocation of production or of another activity of the beneficiary from elsewhere in the EU to the member state granting the aid.

The House of Lords EU Goods Sub-Committee has published a letter it has sent to the Department for Business, Energy and Industrial Strategy (BEIS) asking further questions about the EU Temporary Framework to support the economy in the context of the 2019 novel coronavirus disease (COVID-19) outbreak.


Scotland

OSCR has updated its surveys page to show more of the overall findings from the survey on the impact of COVID-19 on Scottish charities. The updated information provided on the surveys page details the overall response to each question, including:

  • how charities have been affected;
  • how charities have responded;
  • impact on number of volunteer numbers;
  • financial threat;
  • ability of charities to continue to operate; and
  • recommendations for OSCR and other support providers.

Northern Ireland

The Police Service of NI has announced that street collections can recommence provided charities collecting in a street put an object (e.g. a table) in front or beside collectors to ensure there is a metre distance between them and the public.  However, house-to-house collections cannot recommence yet.


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 July 14, 2020.