Bates Wells Briefing for Charities & Social Enterprises

This week Bates Wells’ David Hunter explains why he feels the publication of the Climate and Ecological Emergency Bill could mark a turning point in the fight against the climate emergency.  Read David’s  blog here.

Services
Charity
Sectors
Social Enterprise
Type
Updates
Bates Wells highlights

At a glance

NCVO has published comments ahead of this Wednesday’s Spending Review. 

The government has published new guidance “Enabling safe and effective volunteering during coronavirus”.
 
The Office of Financial Sanctions Implementation has published a blog to help charities and trustees working internationally to understand the financial sanctions regime.
 
The Joint Committee on Human Rights (a parliamentary select committee) has announced an inquiry into freedom of expression.


Coronavirus – Government funding  

200+ BAME organisations secure share of £9.5m National Lottery funding to survive Covid-19 pandemic – 205 community organisations led by, or that support, Black, Asian and Minority Ethnic communities have received a share of £9.5m of National Lottery funding to help recover from the impacts of the Covid-19 pandemic, with a further 97 grants also being made to support the recovery of community-led organisations, through the Covid-19 Community-Led Organisations Recovery Scheme (CCLORS) led by Power to Change in partnership with Locality, The Ubele Initiative and Social Investment Business, and part of The National Lottery Community Fund’s Coronavirus Community Support Fund.

A new £300 million Sports Winter Survival Package will support sports – from national governing bodies through to clubs – impacted by coronavirus restrictions.  The funding, which will be largely composed of loans will focus on sports severely impacted over the winter.


Coronavirus – guidance 

We’ve come across this government guidance “Enabling safe and effective volunteering during coronavirus” which was published on 13th November.  It covers: 

  1. Who can volunteer
  2. Workplace closures
  3. Volunteering in groups and around others
  4. Travelling to volunteer or while volunteering
  5. Face coverings
  6. Coronavirus testing for volunteers
  7. Ensuring volunteers and their workplaces are safe
  8. Safeguarding volunteers
  9. Insurance and volunteers
  10. Volunteers who claim benefits or who are ‘furloughed’
  11. Involving volunteers in mutual aid groups and community support groups
  12. Local information and resources

The National Youth Agency has published “Managing youth sector activities and spaces during COVID-19”. 


Coronavirus job retention scheme

A letter from Charity Finance Group  to Chancellor Rishi Sunak asking for a job retention scheme that is “fit-for-purpose”  has now gathered well over 100 signatures from both non-profit leaders (representing thousands of charities across the sector) and business leaders too.  CFG’s CEO Caron Bradshaw says  “For some activities, furloughing can work, but our social change organisations are being asked to choose between saving themselves and serving beneficiaries. At the same time, we’re seeing demand for their vital services rise fast making that choice even harder. Our citizens desperately need helplines, advice, support and guidance; whether on mental health, unemployment, homelessness or loneliness and isolation. Government must act now to help the sector mobilise, not mothball.”


Coronavirus – impact on children 

In a report to the UN Committee on the Rights of the Child, the Equality and Human Rights Commission has expressed significant concerns about how the pandemic is exacerbating existing inequalities, and having a devastating impact on children’s rights, well-being and futures. Key concerns include more children being pushed into poverty, widening educational inequalities and worsening mental health.

Coronavirus – test case on business interruption insurance test case

The Supreme Court appeal ended last week, with the court saying that it recognises the importance of an early judgment, but it’s not yet clear whether this will be before Christmas or in January 2021.  Transcripts, videos of the hearing and updates are available via the Financial Conduct Authority’s webpage.


Coronavirus – sector general

According to a new survey by the Charities Aid Foundation, two thirds of charities say they will have to reduce services in the next three months as a result of lockdown measures.Civil Society Media reports the National Audit Office is to look at how well the government spent the £750m allocated to support the charity sector during the pandemic.  The NAO anticipates publishing the report next spring. Back in August, NPC held a digital event in partnership with ERSA to discuss “the charity sector and the forthcoming unemployment surge”.  You can now access a recording of this here. The Regulator of Social Housing has published a report following responses to its seventh Coronavirus Operational Response Survey.

Spending Review

NCVO looks ahead here to this Wednesday’s Spending Review.  Possible announcements for charities to look out for include:

  • increasing departmental budgets above inflation up to 2022
  • more details on the long-awaited UK Shared Prosperity Fund (UKSPF) which will replace EU funding. NCVO says it assumes this will provide details about who will be responsible for distributing funding and identifying need, which would mean that the long awaited consultation – promised since 2017 – is not going to happen.
  • Possible cuts to the overseas aid budget from 0.7% of gross national income (GNI) to 0.5% next year.

Climate Change 

In this blog, Bates Wells’ David Hunter explains why he feels the publication of the Climate and Ecological Emergency Bill could mark a turning point in the fight against the climate emergency.


Brexit

Government has published a number of policy statements, available here, in relation to the UK Internal Market Bill, including statements on goods market access, services market access, and the recognition of professional qualifications across jurisdictions in the UK. The legislation creates an Office for the Internal Market (OIM) within the Competition and Markets Authority (CMA) to carry out a set of independent advisory, monitoring and reporting functions. The OIM will analyse the health of the UK internal market and report to the UK Parliament and the devolved legislatures. 


Charity Commission 

Combined Funds Limited (1189209)
Inquiry report
CC press release

The commission opened the inquiry into this grant-giving charity following serious concerns surrounding unmanaged conflicts of interest and unauthorised trustee personal benefit, as well as loans from the charity to its trading subsidiaries.

The commission found that the original trustees had been running the organisation as a charity since its formation and despite it having wholly charitable objects, they had only registered with Companies House. They were therefore under a legal obligation to register the charity.

In July 2020 (towards the end of the statutory inquiry) an Official Warning was issued to the two remaining original trustees to address concerns including inadequately managed conflicts of interest and/or loyalty and preparing SORP compliant accounts.

Kenya Community Support Network (1104003)(KCSN)
Inquiry report
CC press release

KCSN had charitable objects that included relieving poverty among Kenyans in the UK and in Kenya.
The commission became involved with the charity after Comic Relief suspended its grants to KCSN following concerns the charity was being used for personal financial gain.

The commission has disqualified the founder of KCSN (who was a former trustee of the charity) from being a charity trustee and from holding any office or employment with senior management functions in any charities from for a period of eight years, after finding he used the charity to provide significant financial benefits to him and his family. The founder exercised his right to appeal this decision and the First Tier Tribunal (Charity) upheld the inquiry’s decision to disqualify him.
The inquiry issued the charity’s trustees notice of its intention to wind the charity up. Before the notice period was completed, the charitable company was dissolved at Companies House.


Financial Sanctions

The Office of Financial Sanctions Implementation (OFSI) has published a blog post to help charities and trustees working internationally to understand the financial sanctions regime by giving an overview of financial sanctions and reminding charity stakeholders to undertake due diligence checks and report any breaches to the Charity Commission. The post also contains information on obtaining licences, such as humanitarian ones, to permit otherwise prohibited activity.


Safeguarding

The Home Office has joined forces with charities including the NSPCC, Barnardo’s and The Children’s Society to launch a new campaign to protect victims of child abuse.  The month-long campaign, ‘Something’s Not Right’, encourages young people to recognise different forms of abuse, report it and get help.


Data Protection

Transfer of personal data to third countries

The European Commission has published the long-awaited standard contractual clauses for the transfer of personal data to third countries under the GDPR; they are a modernisation of the previous clauses, designed to better reflect the use of new and complex processing operations.  This is a draft implementing decision and Annex, open for feedback until 10 December 2020. Although the Commission has previously indicated that these clauses would be finalised before the end of the year, they require the opinion of the EDPB and EDPS and consultation with member states, so it is possible they will not come into force until early 2021.  Whether or not they form part of retained EU law for the UK will depend on whether they are operative before 31 December 2020. If not, the UK may consider adopting them by way of regulations under the Data Protection Act 2018.  The previous standard contractual clauses (under the Data Protection Directive (95/46/EC)) will be repealed with a one-year transitional period for contracts entered into before the new clauses come into force.

Bates Wells’ Head of Privacy Victoria Horden comments “The new draft SCCs will require careful consideration as they will be (once finalised) the version that all international data transfers relying on SCCs will need to reflect. In particular, the draft SCCs aim to reflect a number of the concerns raised by the Schrems II decision of the Court of Justice of the EU from July this year. On the plus side, the draft SCCs recognise types of transfers that the existing SCCs do not (i.e. processor to processor, and processor to controller). However, reliance on the SCC going forward will change considerably. In particular, for all types of transfers, there will be a requirement to document an assessment of the transfer and provide that documented assessment to the relevant data protection authority on request.”


Education

Academy trust’s 15 schools to close one week early for Xmas to ‘protect precious family time together’ –  Schools Week reports on an academy trust’s decision to close its 15 schools a week early for Christmas to “safeguard the wellbeing of staff and pupils and protect precious family time together” and the subsequent response from the regional schools commissioner, who said that she cannot support the decision, warning that if the trust does not make a U-turn, she will “escalate” the case to ministers who “may wish to consider further action”.
 
Union accused of breaking rules over ‘political’ election ad – Schools Week reports on accusations that the National Education Union has broken the law (Trade Union & Labour Relations (Consolidation) Act 1992) by publishing political adverts criticising the Conservative government. Conservative MPs have also criticised the trade union.
 
38% rise in elective home education, and ‘stretched’ councils can’t keep track – Schools Week reports that the number of children withdrawn from school for elective home education has soared by 38 per cent in the past year according to The Association of Directors of Children’s Services
Also see under Freedom of Expression below.

Social Enterprise news 

University of Westminster launches first industry-backed Social Enterprise MSc – Social Enterprise Mark reports on the University of Westminster’s launch of its Social Enterprise MSc course, described as ‘the first course of its kind to gain official endorsement from the social enterprise sector’, backed by Social Enterprise Mark CIC. The course aims to teach the skills necessary to lead, support or create sustainable social enterprises.
 
SEAP – You Said, We Did – Social Enterprise UK has published a new report (landing page) setting out how it has responded to information provided through its initial four Social Enterprise Advisory Panel (SEAP) surveys between May and October 2020, including actions taken and further plans.
 
New collaboration to pioneer social enterprise accreditation in Ireland – Social Enterprise Mark reports on its partnership with Social Impact Ireland, designed to introduce a social enterprise accreditation in the Republic of Ireland.


Social finance and social impact investing news

Universities as social impact investors: the snowball effect of value – Richard Hazenberg (Professor of Social Innovation, University of Northampton) and Dave Gorman (Director of Social Responsibility & Sustainability, University of Edinburgh) write for Big Society Capital on the opportunity for universities to act as hubs for social investment, putting the sector’s endowment funds to good use.
 
Schroders teams with Big Society Capital for £100m charity trust launch – Financial News reports on the announcement that Big Society Capital and asset manager, Schroders are teaming up to raise £100m for a new investment trust listed on the London Stock Exchange, aimed at funnelling investment toward charities and social enterprises.

 Faith based organisations 

Funding has been announced for 9 projects as part of the government’s Faith, Race and Hate Crime Grants scheme.  They include a grant of £287,000 which will be given to ‘Communities United’ and will be delivered by 6 English Football League Trust Club Community organisations in the North West.


Sport

See above under Coronavirus – funding, and also under Faith based organisations.


Freedom of expression

The Joint Committee on Human Rights (a parliamentary select committee) has announced an inquiry into freedom of expression. The scope of the inquiry includes:The obligations an employee has to their employer when expressing views on social media and the extent to which an employer can (and should) respond to what their employees say on such platforms.Whether hate speech law needs to be clarified or updated as shifting social attitudes lead some to consider commonly held views as hateful, and whether current police guidance and practice on hate speech helps to promote freedom of expression.Whether there is a need to review the Public Space Protection Order (PSPO) legislation.How the position has changed in universities since the committee’s last report.The deadline for responses to the inquiry from interested groups and individuals is 6 December 2020.

Company law/accounting

Companies House has issued advice to UK businesses urging them not to leave filing their annual accounts until the last minute. Paper accounts submitted too close to the 31 December 2020 deadline which are then rejected risk not having enough time to be corrected, re-submitted and manually checked; an automatic late filing penalty would then be incurred. However, if the late delivery of accounts was directly caused by the coronavirus pandemic, Companies House states that it will treat penalty appeals sympathetically.


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 25, 2020.