Bates Wells Briefing for Charities & Social Enterprises 6 October 2020

Bates Wells highlights

Services
Charity
Sectors
Charities, Social Enterprise
Type
Updates

Companies, including charitable companies, can benefit from extensions announced last week under the Corporate Insolvency and Governance Act 2020 relating to members’ meetings.  See here for a summary. 
 
This week’s Briefing covers the two week period from 21 September to 2 October.


At a glance

The Charity Commission held its Annual Public Meeting last week.

The Charity Commission has published some brief guidance on the rule of six as it applies to trustee and member meetings.

The Information Commissioner’s Office has launched a public consultation on its draft Statutory guidance. 

The Cabinet Office has announced the launch of an updated social value in procurement model.


Coronavirus – sector general

The National Council for Voluntary Organisations (NCVO) has written about its strategic priorities post COVID-19.

Since April 2020 the Third Sector Research Centre at Birmingham University has been exploring community responses to COVID-19 – from lockdown and beyond.  Commissioned by Local Trust the first full research report has now been published – Stronger than anyone thought –  based of the findings from 317 learning conversations across 26 communities in England. The report is accompanied by a blog and six Rapid Research Briefings examining particular aspects of community responses to the pandemic.


Coronavirus – government funding and schemes

The government has published a fact sheet about the Job Support Scheme.   Also see this Charity Finance Group summary.

The Office for Veterans’ Affairs and the Ministry of Defence have announced that 100 UK Armed Forces charities will benefit from nearly £6m of extra funding to support serving personnel, veterans and their families during the coronavirus pandemic.

Nineteen philanthropists, charitable funders and foundations have received a share of £85m government matched funding. They include Comic Relief, The Greggs Foundation and Global’s Make Some Noise. 

New Philanthropy Capital (NPC) has announced that it is working with Ipsos MORI, who have been commissioned by The National Lottery Community Fund to evaluate the Coronavirus Community Support Fund.


Coronavirus – impact on access to justice

In a new report, the Law Society of England and Wales have analysed the impact of measures on the ability of vulnerable people to access justice and legal advice during the pandemic and makes granular recommendations for the government’s six month review of the emergency measures.


Corporate Insolvency and Governance Act 2020

See here for a Bates Wells Briefing about extensions to some of the temporary measures introduced by the Act.  Note that the temporary suspension for liability for wrongful trading has not been extended, and in a moratorium situation the monitor will no longer be able to ignore the economic impact of coronavirus when considering whether the company is likely to be rescued as a going concern.

Also see under Northern Ireland.


Brexit

In this updated Bates Wells’ briefing, we explore the legal mechanics of Brexit and the likely timetable.  Colleagues with expertise in specific areas – from data protection to employment, and from state aid to immigration – give their views on the potential short- and long-term implications of Brexit for charities and social enterprises.


Sector – general

In June the Prime Minister asked Danny Kruger MP for proposals to sustain the community spirit seen during the lockdown.  The report, Levelling up our communities: proposals for a new social covenant, has a number of proposals, including:

  • A new Community Power Act, which would give charities and other groups a right to request a role designing and delivering public services.
  • Establish a volunteer passport system, which would let individuals move between volunteering roles and would encourage work in local communities and with health charities.
  • Work with the Office for National Statistics and charity experts to agree ways of measuring civil society activity and value.
  • Remove national and local barriers to working with faith charities.
  • Review the role of the National Lottery Community Fund.
  • The Charity Commission to create a new “probation” status for new charities, so that organisations can set up quickly after passing “basic probity tests”, with a fuller review two years after that.
  • The Charity Commission continues support for charities which wish to merge or work at greater scale.
  • Charities and foundations to publish “coherent and comparable data on their activities and outcomes”, if they receive public funds or tax reliefs.
  • Charities and foundations to partner with government and academics to design a campaign attracting more philanthropic giving by the “world’s super-rich” living in the UK. This could be funded in part through match-funding from the international development budget.
  • Create a £500m Community Recovery Fund, using money allocated from the dormant National Fund. This would support charities as they move from the emergency coronavirus response to helping communities recover from its impact.
  • Create a Levelling-Up Communities Fund, using some of the £2bn available from dormant assets, which would allow “perpetual investment” in community-led projects in the UK’s most deprived areas.

 See here for the full report and here for the press release. You can also read the Prime Minister’s response to the report here.


Charity Commission

Annual Public Meeting
 
The Commission held its Annual Pubic Meeting (APM) virtually last week.  See here for Baroness Stowell’s speech and here to watch the entire APM. 
 
CC Coronavirus guidance – trustee/member meetings and the rule of 6

The Commission’s Covid-19 guidance has been updated to state that the section in the Corporate Insolvency and Governance Act 2020 on holding meetings online has been extended from 30 September to 30 December 2020 (but that the temporary provision allowing the postponement of Annual General Meeting’s ended on 30 September 2020.)

The guidance has also been updated in line with the “rule of six”, saying that there are some exceptions to the rule where groups can be larger than 6 people. This includes providing voluntary or charitable services, meaning you can hold trustee or members’ meetings of more than 6 people where these meetings are “necessary for providing charitable services”.

Registration decisions
 
The Commission has published two decisions to register organisations as charities:
 It has published its recent decision to register Public Interest News Foundation, an organisation which aims to work directly with the public and news publishers to promote citizenship, community development and high ethical standards of journalism, as a charity. The decision refers back to a statement published by the commission in January 2020 on when journalism can be charitable. Bates Wells’ Lawrence Simanowitz comments “This is a welcome decision for all those who value and appreciate high quality news and journalism.  Whilst it does not give charitable status to the promotion of public benefit journalism in its own right,  it is an important step in that direction.   Broadly, it recognises that it is charitable to provide public interest news where that encourages greater engagement in the community.     By enabling charitable funds to flow to some types of journalism and media,  this may help stem the disastrous collapse of high quality journalism in the UK.”The Commission has also recently published the decision it made on 20 June 2016 to register the Theosophical Society in England.Inquiries
 
The Charity Commission has announced that it is looking to appoint new trustees to the Sikh Channel Community Broadcasting Company Limited (charity number 1136163), which is currently subject to a statutory inquiry. This follows the decision of the First Tier Tribunal in July to quash the Commission’s appointment of an Interim Manager. The Commission says its intention is therefore to pursue the alternative approach of appointing new trustees.
 
Inquiry report
 Name of organisationBrief descriptionAnything unusual e.g. unusual facts or novel/rare use of commission’s powersCWM Harry Land Trust Ltd (1100899)
 
Inquiry reportThe charity had been included in the “double defaulter” class inquiry which investigates charities which have defaulted on their statutory filing obligations with the commission on two or more occasions in the last five years. The charity continued to fail to file its outstanding financial information and additionally went on to fail to file its financial information and the Commission also had concerns over a number of related party transactions, including payments to a trustee.The inquiry issued the charity with an Official Warning stipulating that the outstanding financial information should be filed.The charity initially failed to comply (partly due to the outbreak of the coronavirus); however, the trustees cooperated with the inquiry and submitted the charity’s outstanding accounts.
Whistleblowing data
 
The Commission has published a report explaining its approach to whistleblowing and the reports from charity employees that the regulator received between 1 April 2019 and 31 March 2020. The Commission received 247 whistleblowing disclosures in 2019 to 2020 which is a 33.5% increase on the previous year. The top three reported issues were governance failures, safeguarding and protecting people and financial harms.

Tax and VAT

Charity Tax Group reports HMRC has now published:


Safeguarding

The government has:

  • published its response to the Independent Inquiry into Child Sexual Abuse’s Westminster report;
  • doubled funding for child sexual abuse charities to £2.4 million; and
  • published a White Paper, A Smarter Approach to Sentencing, in which it proposes a time reduction for the disclosure of certain spent convictions so they no longer appear on checks through the Disclosure and Barring Scheme.  The White Paper follows draft legislation from July 2020 removing the requirement for automatic disclosure of youth cautions, reprimands and warnings, as well as removing the “multiple conviction” rule.

Equality, diversity and inclusion

The government has announced its response to the consultation on the Gender Recognition Act 2004
 
See here for a roundup of equality, diversity and inclusion issues/resources from the National Council of Voluntary Organisations (NCVO).

New Philanthropy Capital has written here about gender and culture-informed approaches.

Data protection

ICO’s regulatory approach

Information Commissioner Elizabeth Denham has written an open letter to UK organisations  setting out the Information Commissioner’s Office’s (ICO) updated regulatory approach during COVID-19

ICO has launched a public consultation on its draft Statutory guidance, which details how it will regulate and enforce data protection legislation in the UK. The consultation will remain open until 5pm on Thursday 12 November 2020.

ICO fines

The ICO has fined Digital Growth Experts Limited £60,000 for sending thousands of nuisance marketing texts at the height of the pandemic.


Education

On 29 September 2020, the Prime Minister gave a speech outlining proposals to expand post-18 education and training to prepare workers for the post-COVID-19 economy. Among the measures announced with reference to England:

  • From April 2021, a new Lifetime Skills Guarantee will give adults without an A-level or equivalent qualification the chance to take free college courses valued by employers at a time and location that suits them.
  • A new entitlement to flexible higher education loans will enable adults and young people to space out study across their lifetimes, take more high-quality vocational courses in further education colleges and universities.
  • Opportunities for apprenticeships will be increased, with more funding for SMEs taking on apprentices, and greater flexibility in how their training is structured, especially in sectors such as construction and creative industries where there are more varied employment patterns. It is suggested that many apprenticeships will become “portable” so that they can be taken between employers.

The government’s free online skills toolkit which was started this year and is intended to help people train in digital and numeracy skills will now be expanded to include 62 additional courses. Following successful pilots in Greater Manchester and the West Midlands, digital skills boot camps will be expanded and introduce programmes in four new locations. From next year, boot camps will be extended to sectors such as construction and engineering.
An education white paper is expected later this year.
The Department for Education has:

  • Announced new support for schools and students using remote education. Measures include making 100,000 laptops available to children who are having to self-isolate.
  • Announced that Stephen van Rooyen will be appointed as the new chair of the Skills and Productivity Board. The board is tasked with helping deliver the government’s further education reforms.
  • Announced in an open later to the Ofsted Chief Inspector that Ofsted will become the single body for the inspection of apprenticeship training at all levels.
  • Published the results on its consultation to remove the exemption from routine Ofsted inspection for schools that had been rated as outstanding. The consultation and proposals received broad support from those who responded and the Department for Education will now seek parliament’s approval to implement the proposed changes. It is proposed that those exempt schools and other settings who have gone the longest time without being inspected will be prioritised.
  • Published guidance on the use of NHS Covid-19 test and trace app in schools and further education colleges. The guidance sets out leaders should understand how the app works and how it can be used in the event of an outbreak.
  • Published guidance setting out public health arrangements for exams taking place this autumn. It includes guidance on the set up of the exam room, cleaning, the use of the NHS test and trace app and explains that candidates can use face masks if they wish.

Also see under Health/sport below.


Health/sport

The government has announced a new million-pound programme to get more students and their families physically active in time for Bike to School Week.  It includes:

  • cycle repair workshops being set up in primary schools and local neighbourhoods to make sure students’ bikes are fit for the road.  ‘Doctor Bike’ clinics will be rolled out next month, targeting areas where children, including those with disabilities, are more likely to need support in getting their bikes roadworthy for regular use on the school run; and
  • £1m funding to extend the Walk to School Outreach Programme.

Social finance and social impact investing news

Homes for Good- Scotland’s first social enterprise letting agency- welcomes Big Issue Invest as new partner in £3m deal’. Big Issue Invest (‘BII’) has announced a £3m investment in Scottish social enterprise Homes for Good, which makes it the largest investment from BII’s Social Enterprise Investment Fund II. The investment has allowed early stage investor Impact Ventures UK to ‘successfully exit three years early’, which Pioneers Post reports is one of the largest social investment exits on record.
 
Keeping it real in a virtual world – lessons from the frontline. Stephen Muers, Interim Chief Executive Officer at Big Society Capital (BSC), shares his insights from BSC’s recent “virtual festival” on social investment, noting a challenge from the Minister for Civil Society for the sector to articulate the three core benefits of social investment, so the case can be made more widely across government.
 
Fair4All Finance responds to levelling up our communities report from Danny Kruger MP. Fair4All Finance, the CDFI and credit union funding body and sister entity to Big Society Capital, responds to Kruger’s recent report to government.
 
Big Society Capital has published Evaluation of the Community Investment Enterprise Facility – First Annual Report, a longitudinal evaluation from Sheffield Hallam University, looking at the nature of community development finance institution lending through the Facility.
 
Why is impact investing still the best kept secret in town? – EVPA’s new CEO. Pioneers Post reports on the speech of EVPA’s new CEO, Roberta Bosurgi, at the recent European Venture Philanthropy Association’s (EVPA) Annual Conference. Bosurgi said that impact investing is still “the best kept secret in town” and the “Covid earthquake” presents a great opportunity for the sector to make its voice even bigger.
 
Crucial months ahead for future of EU social enterprise funding. Pioneers Post reports on the uncertainty around the European Union’s funding of the social economy due to the complexity of agreeing the 2021-2027 budget.

Social enterprise sector news

Social Enterprise UK has released the ‘Year 4 Impact Report’ which reports that the Buy Social Corporate Challenge has seen large corporates spend over £90m with social enterprise suppliers since its launch, creating over 1,200 jobs at social enterprises.

Housing and homelessness

The regulator of Social Housing has published its consumer regulation review report for 2019-2020. The report provides a summary of the RSH’s consumer standards regulation work for 2019-20 based on cases raised.

The Ministry of Housing, Communities and Local Government has published the government’s response to the outcome of its July 2017 call for evidence on the Homelessness Reduction Act 2017 (HRA 2017).  The government’s response includes a summary of the call for evidence responses, the findings of the independent valuation commissioned by the MCHLG to examine the implementation of the HRA 2017, and the views of the Homelessness Reduction Act Working Group (HRAWG). Actions the government proposes to take in response to the findings include:

  • a post-implementation review of the new burdens funding to fully understand the impact of the new duties on local authorities, expected this autumn;
  • taking steps to address the challenges in implementing the duty to refer. Scope for extending the duty to refer to other agencies and partners will also be considered; and
  • raising awareness of the new duties by updating the GOV.UK website and developing awareness-raising materials highlighting the prevention duty to people at risk of homelessness for display in public spaces and for distribution by other government departments, public bodies and local authorities.

Public procurement and state aid

Last week the government announced that from 1 January 2021 a new social value test will come into effect for government procurements.  The social value model which departments will assess contracts on includes:

  • supporting COVID-19 recovery, including helping local communities manage and recover from the impact of COVID;
  • tackling economic inequality, including creating new businesses, jobs and skills, as well as increasing supply chain resilience;
  • fighting climate change and reducing waste; and
  • driving equal opportunity, including reducing the disability employment gap and tackling workforce inequality Improving health and wellbeing and community integration.

The government said the new approach will apply tests that all bidders, irrespective of their size and type, will be capable of meeting and that this will level the playing field for the UK’s small businesses, start-ups and voluntary and community sector organisations and social enterprises. The government has also published Procurement Policy Note 06/20 – taking account of social value in the award of central government contracts (PPN 06/20).


Volunteering

The National Council for Voluntary Organisations (NCVO) has published:selected highlights from its 2020 Voluntary Sector and Volunteering Research Conference; andthe latest Volunteering roundup.

Modern slavery

The government has announced new measures to expand and clarify the requirements of the Modern Slavery Act 2015, with which large businesses, charities, social enterprises and now the public sector will need to comply once brought into force.  For more, see this Briefing from Bates Wells’ Melanie Carter.

Companies House

Compulsory striking off
 
A reminder that Companies House will resume its compulsory strike off procedures from 10 October.

Personal information

Companies House has published guidance on how a director, LLP member or PSC can protect personal information on the Companies House register, if they (or someone living with them) are at serious risk of violence or intimidation because of the company or LLP’s activities.  It has also published guidance on how to remove home addresses from the Companies House register.

Scotland

The Office of the Scottish Charity Regulator (OSCR) has published information about the recent legislative amendments regarding charity meetings. It has also published a video recording of its recent  webinar on the same subject.
 
OSCR has published the results from the Scottish Charity and Public Surveys 2020. The charity survey asked questions to help identify the challenges faced by charities and examine the perception of OSCR amongst charities. The public survey measured trust in charities, attitudes towards charity regulation and explored the impact of regulation on trustworthiness.


Northern Ireland

The temporary relaxations under the Corporate Insolvency and Governance Act 2020 allowing members’ general meetings to be held remotely have now also been extended until 30 December 2020 for registered societies and credit unions in Northern Ireland.


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 October 6, 2020.