Bates Wells Briefing for Charities & Social Enterprises

Services
Charity
Sectors
Charities, Social Enterprise
Type
Updates

Bates Wells highlights

The Cabinet Office has published guidance on public sector procurement from 1 January 2021.   See today’s Briefing for details. 


At a glance

The Fundraising Regulator has published an independent evaluation of the Fundraising Preference Service. 

The High Court has held that the National Fund, a charity established in 1928 to pay off the national debt (and now holding funds in excess of £500million) is a valid charitable trust.

An independent review is calling for views from people of all faiths on the effectiveness of government’s engagement with faith groups. 

The Financial Reporting Council has published a climate thematic report.
 
The Scottish Government is running two online events to develop and refine proposals to reform charity law in Scotland. 

Coronavirus – Government funding 

Culture Secretary Oliver Dowden confirmed last week that the Coronavirus Community Support Fund (CCSF) has been fully allocated, with 8,250 small and medium organisations receiving grants.  NCVO reports New Philanthropy Capital are working with Ipsos MORI to evaluate the CCSF.   
 
In Northern Ireland, the Voluntary, Community and Social Economy Sector (VCSE) Covid Recovery Fund has been launched to help the sector to safely deliver essential services during the Covid-19 crisis.

Coronavirus – Sector generally 

The results of the first covid-19 Voluntary Sector Impact Barometer have been published – see here for a summary from NCVO. 


Diversity 
CharityJobs has published a new guide “Diversity in Charity Sector Recruitment: A Hiring Guide”.  You can download a copy for free here
 

Charity Law Cases 
In Attorney General v Zedra Fiduciary Services (UK) Limited and others [2020] EWHC 2988 (Ch)the High Court has held that the National Fund, a charity established in 1928 to pay off the national debt (and now holding funds in excess of £500million) is a valid charitable trust. The trust deed establishing the fund effected an immediate and unconditional gift to charity. However, this is a case of subsequent failure of charitable purposes and the court could make a cy-près scheme to redirect the charity’s assets to alternative (similar) charitable purposes. The circumstances in which the fund might be sufficient to comply with the main purpose of the trust are so remote that for all practical purposes there is no possibility of it ever being sufficient to discharge the national debt, meaning that the original purposes cannot be carried out, or not according to the directions given and to the spirit of the gift. In addition, once regard is had to the spirit of the gift and social and economic circumstances currently prevailing, the original purposes have ceased to provide a suitable and effective method of using the property available by virtue of the gift. The current economic circumstances mean that adherence to the original main purpose would leave the National Fund in limbo indefinitely, with no benefit accruing to charity at all. The question whether the court should make a scheme, under its cy-près jurisdiction, for the transfer of the National Fund to the National Debt Commissioners for the reduction of the National Debt or for some other (and if so what) charitable purposes will be deferred to a subsequent hearing.

Tax and VAT

Charity Tax Group reports it has received an update from the HMRC Off-Payroll Working Programme team, confirming that the Government and HMRC have laid the Statutory Instruments that make the necessary changes to PAYE and NICs regulations, in preparation for the changes to the off-payroll working rules, which will come into force on 6 April 2021.


Data Protection 

ICO fines
 
The Information Commissioner’s Office (ICO) has fined Ticketmaster UK Limited £1.25million for failing to keep its customers’ personal data secure.
 
Political parties
 
The ICO has set out how seven of the UK’s political parties need to improve the way they handle people’s personal data after assessing how they manage data protection.  A summary of the audits includes specific actions to improve data protection transparency and practice for: the Conservative Party; the Labour Party; the Liberal Democrats; the Scottish National Party (SNP); the Democratic Unionist Party (DUP); Plaid Cymru; and United Kingdom Independence Party (UKIP).

Fundraising 

Fundraising Preference Service
 
The Fundraising Regulator has published an independent evaluation of the Fundraising Preference Service (FPS). The FR says that:according to the evaluation report, the principle of an independent fundraising preference service is an important part of the support structure that helps to maintain public trust and ultimately strengthen charity fundraising.the report makes several helpful recommendations for improving the FPS – which it has accepted- including:exploring ways to reduce the cost of the service by investigating less complex options, focusing on those in vulnerable circumstances;encouraging charities and others to promote the FPS to people in vulnerable circumstances;and issuing guidance to charities about what to do if they receive a suppression request via FPS from someone who isn’t on their database. Legacies
 
A new report Strengthening Charities’ Resilience with Legacies from the Institute of Legacy Management, Remember a Charity, Legacy Foresight and Smee & Ford says that a  predicted legacy boom worth up to £40 billion over the next decade presents unique opportunities for charities.  It calls on charities to act urgently and to continue to communicate the importance of legacies within and beyond their supporter base. 
 

Philanthropy 

Last week we mentioned Prism the Gift Fund (Prism) had published its first thought piece “The Philanthropy Paradox:  Public attitudes and future prospects for planned giving” but we forgot to include a link.  So we’re including it again this week. 


Education 

The Department for Education has:

  • Announced plans to review the university admissions system and to move to a system where students are offered university places based on the grades they achieve, rather than their predicted grades as is currently the practice. The current system is seen to be detrimental to disadvantages students.
  • Published guidance ‘Student movement and plans for the end of term’ setting out the guidelines for university students over the Christmas period. The guidance states: In order to ensure that students can be home at the end of the winter term but also reduce any transmission risk, the Government is asking that students return home once the national restrictions have been lifted, in a “student travel window” lasting from 3-9 December.

Social finance and impact investing news
A confluence of impact: Why companies must shift course to bring different social investment streams together – Tim West writes for the Impact Papers, a joint project between Pioneers Post and EVPA, about the rational behind combining corporate impact structures – corporate foundations and social impact funds – which will be discussed further at the C Summit, taking place 3-4 December.
 
The pivotal role of finance in tackling climate change – COP26 President Alok Sharma spoke at Finance in Common about the importance of climate finance and the need for further investment in order to combat the predicted rising global temperatures.
 
The European Commission has announcement that it has granted state aid approval for the creation of the Scottish National Investment Bank, which is designed to promote inclusive and sustainable growth in Scotland.
 
The EVPA has become a Strategic Partner of the Impact Management Project, a collaborative initiative working to build consensus-led best practice for impact measurement and management. The EVPA states that it will work with the IMP throughout 2021 to reflect the impact management norms in its 5-step framework.
 

Faith based organisations 

An independent review is calling for views from people of all faiths on the effectiveness of government’s engagement with faith groups.  The review aims to examine how government can best celebrate the contribution of faith groups, break down barriers and promote acceptance between faiths, and promote shared values while also tackling cultures and practices that are harmful.  It will then provide recommendations to the Communities Secretary by summer 2021 on how government responds to each of these themes.  The call for evidence closes on Friday 11 December.


Environment 

Over the weekend, the government announced plans to kickstart a green economic recovery. They include funding being awarded to environmental charities and partners across England to “restore the natural environment and help make progress on the UK’s ongoing work to address the twin challenges of biodiversity loss and climate change”. 

Public procurement 

The Cabinet Office has published guidance on public sector procurement from 1 January 2021 which provides that:

  • Contracting authorities are advised that they will need to publish public procurement notices through Find a Tender which will go live on 1 January 2021 and will replace the requirement to publish notices in the Official Journal of the European Union.
  • If contracting authorities use a third party eSender to manage procurement notices, they will be able to continue to use them provided that they have confirmed they can publish notices to Find a Tender.
  • If contracting authorities do not use an eSender or intend to publish notices directly to Find a Tender, they will need to register with the service. This can be done by creating a buyer’s account on Contracts Finder. All Contracts Finder accounts will automatically be given access to publish notices on Find a Tender.

Company law – Climate change reporting

The Financial Reporting Council (FRC) has published a climate thematic report which includes findings on corporate reporting, governance, audit, professional oversight and investor reporting. The report indicates that boards, companies, auditors, professions, investors and regulators all need to do more in respect of climate-related considerations in corporate reporting and auditing.  Of particular note for directors: boards need to ensure that section 172(1) statements describe the actions of the board, rather than other parties, and address all the regulatory requirements, not just those associated with stakeholder engagement, particularly where those statements are combined.   The FRC has also written to CEOs setting out reporting expectations in the year ahead, including the fact that many companies are not sufficiently explaining how the directors discharged their duties under section 172 of the Companies Act 2006, especially with regard to the likely consequences of board decisions in the long term.   

The government has announced that it intends to make it mandatory for large companies (including large private companies) and financial institutions across the UK economy to make climate-related disclosures in the strategic report of their annual report and accounts, aligned with the recommendations of the Task force on Climate-related Financial Disclosures (TCFD), by 2025.  This will be implemented by way of new obligations under the Companies Act 2006.  The indicative path to mandatory reporting is fleshed out in this interim report and this roadmap.  The precise scope is yet to be defined; the Department for Business, Energy and Industrial Strategy (BEIS) intends that the provisions will include UK-registered companies that are above the thresholds for a medium company and listed or otherwise publicly quoted.  BEIS is developing detailed policy proposals and engaging in pre-consultation.  Two options for the scope of the provisions are that the new requirements should apply to:

  • Companies asked to report against a corporate governance code (for example, the Wates Principles).
  • Companies within the revised definition of public interest entity (PIE) as a result of wider audit and corporate governance reform. This may include certain listed, other publicly quoted and private companies.

Elections and campaigning 

See under Data protection, political parties above.


Northern Ireland 

CCNI has updated the information about its operations in light of the Court of Appeal decision in McKee v Charity Commission for Northern Ireland upholding a legal challenge to the delegation of decision-making powers by the Commission to members of its staff.


Scotland 

The Scottish Government – in partnership with ACOSVO and SCVO – will be running two online events as part of its engagement with the charity sector to develop and refine the proposals to reform charity law in Scotland which were consulted on in 2019. The two events are:

  • Scots Charity Law Engagement: Transparency & Accountability, 2nd Dec (13:00 – 14:30)
  • Scots Charity Law Engagement: Increased Regulatory Powers for OSCR, 9th Dec (13:00 – 14:30)

Further details are in this news story on OSCR’s website


OSCR will be holding a webinar on 10 December about protecting charities from phishing scams, for further information and to book, see the regulator’s website.


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 17, 2020.