Bates Wells Briefing for Charities & Social Enterprises

Type
News

Bates Wells highlights

For charities involved with house to house clothing collections, the Fundraising Regulator has issued new guidance about the collection bags being used.  See today’s Briefing for details.


At a glance

The Charity Commission’s coronavirus guidance has been updated in relation to charity meetings.                  

Last week NCVO hosted a webinar looking at improving diversity practice.

The Fundraising Regulator has published its fourth Annual Complaints Report and new guidance around charity clothing collection bags. 


Coronavirus – Guidance 

The government has published:

  • this guidance summarising the current lockdown measures.
  • published new guidance for education settings relating to the new national lockdown that began on 5 November 2020. The guidance notes that education providers are to stay open and that childcare or education is one of the exceptions that children, young people and parents and carers can leave their home for. The guidance also sets out the position on the use of face coverings. In most settings face coverings should be worn where social distancing cannot be maintained, although in early years settings it is not mandatory for staff to wear face coverings and settings have discretion to recommend the use of face coverings where social distancing cannot be maintained.
  • updated COVID-19: guidance for the safe use of places of worship during the pandemic.  

The Fundraising Regulator and Chartered Institute of Fundraising have published a joint statement that, with the new national restrictions in England, they expect charities and their partners to pause public fundraising activities (including door-to-door, street, and private site fundraising) for the duration of the new restrictions.


Coronavirus – Government Funding

Third Sector is reporting that a coalition of more than 30 charity leaders has written to the Chancellor calling for a sector-specific job retention scheme.  Civil Society Media reports Boris Johnson has promised to do more to support the charity sector through this second lockdown.
 
The government has announced new financial support measures for jobs and businesses affected by COVID-19. The measures include:
 

Extending loan schemes and the Future Fund. Businesses will have an extra two months, to 31 January 2021, to apply for a loan under the UK Coronavirus Business Interruption Loan Scheme (CBILS), the UK Coronavirus Large Business Interruption Loan Scheme (CLBILS), the Bounce Back Loan Scheme (BBLS) and the Future Fund.
Allowing BBLS top-ups. The government is changing the BBLS rules to allow businesses that have borrowed less than the permitted maximum (25% of turnover) to top-up their existing loans. Businesses will only be able to make use of the option once and it will be available from the week commencing 9 November 2020.

For more information, see the British Business Bank’s website.

The government has also announced a new winter package to provide further support for children and families.  It includes:

  • a £170m Covid Winter Grant Scheme to support children, families and the most vulnerable over winter – this effectively extends free school meals over the holiday period and signals a U-turn after parliament initially voted against the scheme in October.
  • the Holiday Activities and Food programme will be expanded, covering Easter, Summer and Christmas in 2021
  • Healthy Start payments will rise from £3.10 to £4.25 a week from April 2021

Coronavirus – Other Funding

The Association of Charitable Foundations is hosting a new Funders’ Collaborative Hub – which aims to offer increased understanding, closer alignment, and opportunities for funder collaborations in response to Covid-19.
Civil Society Media reports one hundred funders have signed a renewed pledge to support the charity sector during the coronavirus crisis, ahead of this year’s second lockdown. 

Funding for communities of colour ‘falls woefully short of what is needed’ – Civil Society reports on Future Foundations UK which states that communities of colour are not benefitting from the same access to funding as non-BAME organisations.


Coronavirus – relaxed filing deadlines for registered societies

The FCA has announced that while it asks registered mutual societies (including cooperatives, community benefit societies and credit unions) to submit their annual returns and accounts to it as soon as reasonably practicable, it will not be taking any action to follow-up on delayed submission of annual returns and accounts due for submission by 30 April 2021, where the delay is 3 months or less.  It has also signposted information about postponement of general meetings and other measures making it easier to submit applications to it.

Coronavirus – Business interruption insurance 

The Supreme Court has granted to permission to appeal the High Court decision in the Financial Conduct Authority’s test case on whether businesses affected by the coronavirus pandemic are covered by business interruption insurance.  The appeal will be heard by the Supreme Court itself on 16 November 2020 – the hearing is expected to last four days.  See this Law Society Gazette article and the FCA’s website for more information.   

Brexit
The government has published a designated page of Brexit guidance relevant to civil society organisations.  The page signposts to general immigration and other guidance and links through to a “Transition self-checker”.
The Institute for Government has published a report “Preparing Brexit: how ready is the UK?” The report highlights three main areas for concern:The Northern Ireland Protocol will not be ready to implement on 1 January 2021: the joint UK-EU committee still needs to take decisions about the practical operation of the Protocol, and the infrastructure to administer new processes on Great Britain-Northern Ireland trade will not all be operational.Disruption at the EU-GB border is inevitable due to poor trader readiness and EU checks.  The Covid-19 crisis means many UK firms are less prepared than they were last year: the report highlights ineffective government communication and low levels of awareness among businesses of the practicalities from 1 January including e.g. the increased bureaucracy that will arise whether there is a deal or no deal.

Charity Commission 

Coronavirus guidance
 
The commission’s coronavirus guidance for the sector has been updated in relation to charity meetings in order to reflect the current rules on meeting other people in England and Wales.   The guidance confirms you can still hold trustee or members’ meetings in person where these meetings are necessary for providing voluntary or charitable services.   
               
CC News
 
The commission has published the latest edition of its newsletter CC News containing a roundup of recent news stories and guidance; it also includes links to government guidance about the end of the Brexit transition period on topics relevant to charities.


Governance 

Improving diversity

Last week NCVO hosted a webinar with Rosie Chapman, chair of the Charity Governance Code and Pari Dhillon,  independent consultant, supporting the code steering group to enhance the Diversity Principle.  Pari suggested the following steps boards should take in improving diversity practice:

  • Start by defining why diversity is valuable to your organisation and context. Although diversity is not about representation, decision-making is likely to improve if you reflect the communities you serve and want to serve.
  • Reflect on why particular areas of diversity are not present on your board. Consider barriers to recruitment and board practice and create a plan to address these issues. Pari recommended using online resources by groups such as the Young Trustees Movement and Action for Trustee for Racial Diversity UK.
  • Set context specific and realistic goals which importantly link to your charity’s purpose and context.
  • Review your progress and learn from what works….but also that which doesn’t work!

See this webpage  to access a recording of the webinar and the slides. 

NCVO also hosted a discussion about board and organisational resilience.  Bates Well’s Philip Kirkpatrick took part.  See here for a recording. 


Tax and VAT
Zero rating of supplies to laboratories

A group of experts have drawn up detailed guidance around purchasing lab equipment for universities and other charitably funded bodies and what can, and cannot, be zero-rated for VAT. The guidance has been sent to HMRC for approval but while their response is awaited, the guidance, a decision-making flowchart and a list of ‘grey items’ where the HMRC guidance is unclear or contradictory can be accessed here via the Charity Finance Group website. 

Fundraising 

Fundraising Regulator Complaints Report

The Fundraising Regulator has published its fourth Annual Complaints Report, which analyses complaints it has received over the past year, alongside complaints reported by some of the UK’s largest charities. Some key points are:

  • Complaints to the Fundraising Regulator from members of the public have increased marginally by 13% compared to last year. In total, the FR received 836 complaints, compared to 737 in 2018/19.
  • The methods of fundraising most complained about were charity bags (22%), online fundraising (11%) and face-to-face fundraising (11%).

Fundraising Regulator – new charity clothing collection bags guidance

Recognising the public’s concern about charity bags, the FR has published new guidance to help charities improve their fundraising practices in this area, as well as guidance for the public to help them know what to expect when they receive a charity bag. 

Also see under International development below.


Philanthropy  

Prism the Gift Fund (Prism) has this week published its first thought piece “The Philanthropy Paradox:  Public attitudes and future prospects for planned giving”.   The paper, which was commissioned by Prism to investigate attitudes towards philanthropic giving, presents five findings including reflections on how views vary according to gender, age and income.  Researched and written by Dr Beth Breeze, Centre of Philanthropy, University of Kent, the paper notes in particular that whilst the public respond positively to what philanthropy achieves, they may hold certain negative opinions about donors.  Bates Wells’ Senior Associate Clarissa Lyons comments “The paper is a valuable resource for charities and advisors alike and will encourage further discussion around how levels of charitable giving in the UK might be increased.”

Education

The Department of Education has published a consultation paper seeking views on proposals to reform post-16 technical and academic qualifications at level 3. See this Briefing from Bates Wells’ Emma Dowden-Teale for more details. 
 
The Department for Work and Pensions has announced its intention to provide a £220m winter package to support families and children. £170m of the package will be used to provide food for children who need it over the holidays.


Health

The Equality and Human Rights Commission has opened a statutory inquiry into racial inequality of ethnic minority workers in lower paid roles in health and social care.  A call for evidence will be announced in the coming weeks, as well as further details about an external Advisory Panel that will help to guide the work.

Social finance and impact investing news

Social Investment Business has announced an initiative to expand the Resilience and Recovery Loan Fund (a £25m fund for social enterprises and charities across the UK who are experiencing disruption to their normal business model as a result of COVID-19). The expansion sees the introduction of an introducer network “to improve the geographical accessibility and the diversity of communities reached by the Fund”.
 
How citizen investing can support communities to build back better – Pauline Hinchion, director of Scottish Communities Finance Ltd, writes for Pioneers Post on the need for social enterprises to engage local people as micro-investors, in initiatives such as community bonds. Hinchion explains that the “concept is about making sure that our money brings the maximum mutual benefit to our communities and towns by bolstering the real economy where most of us live and work”. Whilst also providing a return for the investor, this ‘citizen investment’ can help provide capital to businesses that struggle to access affordable business finance.
 
Wellcome Trust set to buy property developer for more than £500m – Civil Society Media reports on The Wellcome Trust’s plan to buy Urban&Civic, a property developer specialising in large regeneration projects uses brownfield sites to provide serviced plots to housebuilders, for £506m, seemingly as part of its investment portfolio.

International Development
Charities are being encouraged to apply for the latest round of UK Aid Match funding – a scheme which sees the UK government double donations made by the public.  The new round wants applications that particularly focus on helping developing countries to combat the long-term impact of COVID-19, end preventable deaths through tackling malnutrition or malaria, and helping girls access quality education to transform their lives. The FCDO is inviting applications from charities by 18 December 2020.

Procurement and State Aid

The Cabinet Office has published Procurement Policy Note PPN 07/20(PPN 07/20) which sets out how payment approaches can be taken into account in the procurement of major government contracts. PPN 07/20 updates and replaces PPN 04/19 from 1 April 2021.

Company Law

Companies House has announced that Companies House Direct (CHD) and WebCHeck are due to close by February 2021, with customers being encouraged to use the Companies House Service (CHS) instead when searching for company information.  You might want to start getting into the habit of using the CHS, if you don’t already. 
 

Scotland 

OSCR has released an interactive Scottish Charity Constituency map which shows Scottish charities by their Scottish Parliament constituency regions and areas: https://www.oscr.org.uk/news/scottish-charity-constituency-map/
 
Following the survey of Scottish charities it carried out in May 2020, OSCR has emailed the principal contacts of all 25,000 Scottish charities to ask them to participate in a further survey on the impact of COVID-19 in order to obtain a more up to date picture of the situation: https://www.oscr.org.uk/news/covid-19-and-scottish-charities-your-voice-matters/


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 November 10, 2020.