Last week, in a landmark charity case, the Supreme Court reaffirmed that members of charitable companies have fiduciary duties and can be controlled by the courts. Bates Wells acted for the philanthropist Jamie Cooper, who was the successful Appellant in the Supreme Court.
See here for more details.
As usual over the summer, we are taking a break from sending out the Briefing while our key contributors are on holiday. Our next comprehensive Briefing will be sent out the week beginning 24th August. For updates from us in the meantime, please see our website, particularly our Coronavirus Hub.
At a glance
The Government has released further detail of the £1.57bn Culture Recovery Fund.
The Minister for Regional Growth and Local Government has announced £20m in new grants to boost recovery of small businesses.
The Competition and Markets Authority has published guidance and an open letter to nurseries and early years providers to help them understand how consumer law applies to their arrangements with parents during COVID-19.
The government has announced it has launched an independent panel to look at judicial review.
Coronavirus – government and other sources of funding
The Government has released further detail on how £880m of the government’s £1.57bn Culture Recovery Fund will support cultural, arts and heritage organisations. The British Film Institute, Arts Council England, Historic England and National Lottery Heritage Fund have published guidance and criteria for applicants. The National Lottery Heritage Fund is managing a new £92m Culture Recovery Fund for Heritage. Grants of between £10,000 and £3m will be available to heritage organisations in England. The funds will be distributed by The National Lottery Heritage Fund and Historic England on behalf of the Department for Digital, Culture, Media & Sport.
The government has also announced a new £500m scheme to kick-start film and television production struggling to secure insurance for COVID-related costs.
The National Lottery Community Fund has published COVID-19 funding in England: update on the Coronavirus Community Support Fund in England, setting out details such as the number of applications received and the total so far awarded to successful applicants. The City of London Corporation’s charitable funder, City Bridge Trust has received a £7 million grant from The National Lottery Community Fund for its London Community Response Fund, which Bates Wells helped to set up in March. See here for more details.
Exclusive: Foundations to invest £15m in COVID recovery fund – but will social investors need rescuing too? Pioneers Post interviews Big Society Capital’s chief investment officer, Jeremy Rogers, in light of £15m of new funding committed to the UK’s Resilience and Recovery Loan Fund.
COVID-19: Social impact funding you might miss – 22 July update. Pioneers Post publishes its pick of emergency grants, loans and other funding sources for which deadlines are approaching, or which otherwise might be missed.
Coronavirus – support for small businesses
The Minister for Regional Growth and Local Government has announced £20m in new grants to boost recovery of small businesses. Small and medium sized businesses in England can access grants between £1,000 – £5,000 for new equipment and technology and specialist advice, including legal advice.
A change to EU State Aid rules means more small businesses can access government-backed loans. This letter from government to the Chair of UK Finance sets out that the European Commission has relaxed its State Aid rules so that small and micro businesses – meaning fewer than 50 employees and turnover less than £9m – will be exempt from elements of the ‘undertaking in difficulty’ test, and are now eligible for the Coronavirus Business Interruption Loan Scheme (CBILS). The letter also sets out our expectation that all accredited CBILS lenders will implement the changes, noting the consequence that businesses whose CBILS applications they have previously declined may now be eligible. See this press release for more background.
Coronavirus – employment
Further details of how jobs will be protected through the government’s new Job Retention Bonus were unveiled by HMRC last week:
- employers will receive a one-off payment of £1,000 for every employee who has previously been furloughed under Coronavirus Job Retention Scheme (CJRS) – if they remain continuously employed to the end of January 2021;
- to ensure the jobs are meaningful well-paid, employees must earn at least £520 (the National Insurance lower earnings limit) a month on average between the beginning of November and the end of January;
- those who were furloughed and had a claim submitted for them after the 10 June (when the CJRS closed to new entrants), because they were returning from paternal leave or time serving as a military reservist will also be eligible for the bonus as long as they meet the other eligibility criteria; and
- employers will also be eligible for employee transfers protected under TUPE legislation, provided they have been continuously employed and meet the other eligibility criteria and the new employer has also submitted a CJRS claim for that employee.
Full guidance will be published in September.
The Government has also brought in a new law to ensure furloughed employees receive statutory redundancy pay based on their normal wages, rather than a reduced furlough rate. These changes will also apply to Statutory Notice Pay and to basic awards for unfair dismissal cases (which will be based on full pay).
Sector – general
DSC is hosting a free ‘Zoom talk’ on 12 August at 5:00pm which will focus on how racism has manifested itself in the charity sector and how organisations and individuals can contribute to making the sector better.
The Information Commissioner’s Office (ICO) has published the first two reports from participants in the beta phase of its regulatory sandbox scheme. They include a report from JISC which covers a wellbeing code of practice developed with universities and colleges who want to investigate the use of student activity data to improve their provision of student support services.
See under Data protection above.
The Competition and Markets Authority (CMA) has published guidance and an open letter to nurseries and early years providers to help them understand how consumer law applies to their arrangements with parents during COVID-19. This follows an influx of complaints about the sector about cancellation and refund issues experienced by customers earlier in the year. Amongst other things, the CMA found that consumers should not have to pay for services that cannot be provided and any contract terms requiring payment while services are not being provided are likely to be unfair and unenforceable.
The Department for Education has:
- Published guidance setting out the assessment processes for selective school admissions during COVID-19. The DfE suggests that tests should be moved back to October and should remain under exam conditions where possible;
- Published guidance on oversubscription criteria in faith school admissions. The DfE notes that admission authorities may find their admission arrangements have been affected for the September 2021 intake because parents and children may have been unable to attend their place of worship as normal due to the COVID-19 and therefore may need to seek a variation to their admission arrangements;
- Announced a new online and telephone support service for apprentices who have lost their jobs during COVID-19; and
- Announced that teachers will receive their largest pay rise in 15 years.
Ofqual has published a letter to Heads regarding the process for awarding results this summer.
Social finance and impact investing news
Trusts request Charity Tribunal ruling on mission-aligned investing. Civil Society Media reports on the Ashden Trust and the Mark Leonard Trust having sought permission from the Charity Commission to ask the Charity Tribunal to rule on whether charities must align their investments with their objects, as part of the ongoing campaign for clarity on this issue. See here for details of the coalition of charities Bates Wells has been supporting and advising.
The Big Society Trust (BST) has published its first quadrennial, independent review of Big Society Capital (BSC) and its effectiveness, as part of a new process commissioned by BST to be carried out every year (on rotation) on one of the four companies it oversees (press release and BSC’s response to the review).
COVID-19 & Coastal Communities – Investing in the social economy to revive seaside resorts and coastal towns is a new report from Social Investment Business setting out its recommendations for investment into the social economies of coastal communities, which have been hit hard by the pandemic. In a blog, the report’s author comments on the key findings.
Social Investment Business: a sprint response to COVID-19 and preparing for the marathon ahead. Chief Executive of Social Investment Business, Nick Temple, writes for Big Society Capital’s ‘Meet the Impact Manager’ series, sharing key learnings from the setting up of the Resilience & Recovery Loan Fund.
The Lloyds Bank Foundation announced a new fund for small and local charities helping people overcome complex social issues; two-year unrestricted grants of £50,000 are available, which come with dedicated organisational development support. At least a quarter of the funding will be allocated to charities led by and for Black, Asian and Minority Ethnic communities.
Resonance Launches Supported Homes Fund for People with Learning Disabilities, Autism and Mental Health Challenges. Social impact investment business Resonance has announced a new fund for supported housing, with initial social investment support from Greater Manchester Combined Authority, Big Society Capital and the Barrow Cadbury Trust.
Social enterprise sector news
Social Enterprise Mark is working with sector partners and UK Finance (the banking trade association) to gather feedback on the difficulties that social enterprises have come across in accessing emergency loan finance. It is running a survey to collect feedback, the responses to which will be used as evidence of the changes needed, in its response to government and UK Finance.
The government has published the draft Restriction of Public Sector Exit Payments Regulations 2020 (draft 2020 Regulations). The Regulations will introduce the long-awaited £95,000 cap on public sector exit payments. The regulations set out that a “relevant authority” must not make an “exit payment” to a person which exceeds the “exit payment cap” in respect of a “relevant public sector exit” (draft regulation 3(a)). Draft regulation 2 defines each of these terms. A relevant authority is either a body listed in the Schedule to the draft 2020 Regulations, or a body responsible for determining the level of remuneration payable to the holder of any of the public offices listed in Part 2 of the Schedule.
The government has announced it has launched an “independent panel” to look at judicial review. The review will be chaired by Lord Edward Faulks QC, and will consider:
- Whether the terms of Judicial Review should be written into law;
- Whether certain executive decisions should be decided on by judges;
- Which grounds and remedies should be available in claims brought against the government; and
- Any further procedural reforms to Judicial Review, such as timings and the appeal process.
The panel will report back later this year. Any recommendations for reform will be considered by the Lord Chancellor and the Chancellor for the Duchy of Lancaster and Minister for the Cabinet Office, Michael Gove.
Click here to read more on this from Bates Wells’ Head of Public and Regulatory Melanie Carter.
OSCR has published its corporate plan for 2020-2023 which it says will be implemented with some flexibility, reflecting how its actions and priorities may require to change in response to the pandemic. It has also published its business plan for the year ahead.
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 August 4, 2020.