Briefing for Charities & Social Enterprises

Bates Wells Highlights

Services
Charity
Sectors
Social Enterprise
Type
News
Our weekly round-up of news and updates from across the sector.

Bates Wells Partner Lawrence Simanowitz is quoted extensively in this Third Sector article “Merger mystery – why joining forces may not answer Covid 19”.

Have you seen our latest updates on diversity and inclusion? Follow these links to read more:
 

You may be interested to read our Top five legal tips for rebranding.

​Our next Briefing will be sent out the week of 22nd Feb.  Enjoy half term if you are having time off!
 


At a glance

The Public Accounts Committee is seeking evidence about how well the COVID funding support to help charities continue to operate has been distributed and whether it is achieving its objectives.
 
The Business Secretary has set out plans for a new UK-wide subsidy control system.
 
Bates Wells has responded to two of the recent BEIS consultations on Corporate transparency and register reform.
 
The Charity Commission has published the transcript of Baroness Stowell’s final speech as Chair of the Charity Commission.
 
The Fundraising Regulator has published its latest accounts and report.



 Coronavirus – Vaccine comms pack for voluntary, community and social enterprise organisations

Together with DCMS, NCVO has published a comms pack about the vaccine, to help VCSEs share and disseminate information about COVID-19 vaccines through their networks.


Coronavirus – government funding

The Public Accounts Committee is seeking evidence to inform its inquiry into how well the funding support to help frontline charities continue to operate during the coronavirus (COVID-19) outbreak has been distributed and whether it is achieving its objectives. Comments by 18.00 on 8 March 2021.


Coronavirus – Gift Aid

As part of Charity Tax Group’s support for a sector led campaign for a temporary increase in the value of Gift Aid during the COVID-19 pandemic, CTG is asking charities to complete an online table with details of Gift Aid claimed April to December 2020 compared to the previous year.  See here for details. 


Coronavirus – planning AGMs

The flexibilities introduced by the Corporate Insolvency and Governance Act 2020 will expire on 30 March 2021 and cannot be extended beyond 5 April 2021 without primary legislation. In view of this CGI (formerly ICSA) has convened a working party to look at practical steps that organisations can take as they plan their meetings and, in particular, whether they can use their notice of meeting to, at least in part, prepare for the future.  CGI says the group has developed some guidance which will be published in the coming weeks, once it has been reviewed and endorsed by the relevant authorities.   CGI has also flagged these publications:

– In October 2020, the Financial Reporting Council published Corporate Governance AGMs: an opportunity for change
– Share Action’s Jan 2021 Fit-for-purpose? The future of the AGM
– Last week the GC100, the Association of General Counsel and Company Secretaries working in FTSE 100 companies, published a discussion paper: Shareholder Meetings – Time for Change?


Coronavirus and charity mergers

Bates Wells Partner Lawrence Simanowitz is quoted in this Third Sector article “Merger mystery – why joining forces may not answer Covid 19”. 

Lawrence, who regularly advises on mergers, said to Third Sector: “If you look at the economic research we have seen showing a really high proportion of charities that thought they would not be able to see the year out in terms of funding – faced with a choice between going to the wall and losing everything, or trying to find some kind of host for the work that you are doing, mergers are an obvious way of salvaging what you’ve got.”


Coronavirus – use of data by local authorities

The Centre for Data Ethics and Innovation, the UK government’s advisory body on the responsible use of AI and data-driven technology, has published new analysis on the use of data in local government during the COVID-19 crisis. 


Charity Commission

The flexibilities introduced by the Corporate Insolvency and Governance Act 2020 will expire on 30 March 2021 and cannot be extended beyond 5 April 2021 without primary legislation. In view of this CGI (formerly ICSA) has convened a working party to look at practical steps that organisations can take as they plan their meetings and, in particular, whether they can use their notice of meeting to, at least in part, prepare for the future.  CGI says the group has developed some guidance which will be published in the coming weeks, once it has been reviewed and endorsed by the relevant authorities.   CGI has also flagged these publications:

– In October 2020, the Financial Reporting Council published Corporate Governance AGMs: an opportunity for change
– Share Action’s Jan 2021 Fit-for-purpose? The future of the AGM
– Last week the GC100, the Association of General Counsel and Company Secretaries working in FTSE 100 companies, published a discussion paper: Shareholder Meetings – Time for Change?The flexibilities introduced by the Corporate Insolvency and Governance Act 2020 will expire on 30 March 2021 and cannot be extended beyond 5 April 2021 without primary legislation. In view of this CGI (formerly ICSA) has convened a working party to look at practical steps that organisations can take as they plan their meetings and, in particular, whether they can use their notice of meeting to, at least in part, prepare for the future.  CGI says the group has developed some guidance which will be published in the coming weeks, once it has been reviewed and endorsed by the relevant authorities.   CGI has also flagged these publications:

– In October 2020, the Financial Reporting Council published Corporate Governance AGMs: an opportunity for change
– Share Action’s Jan 2021 Fit-for-purpose? The future of the AGM
– Last week the GC100, the Association of General Counsel and Company Secretaries working in FTSE 100 companies, published a discussion paper: Shareholder Meetings – Time for Change?


Tax and VAT

HMRC has added a page to its internal VAT manual covering VAT aspects of religious services.


Governance and leadership

In the latest of the “Tesse Talks” podcast series, Andy Martin of Franklin Covey talks about Leadership in uncertain times. 


Data protection

See above under Coronavirus – use of data.

The Court of Appeal has dismissed an appeal against a decision that an information sharing agreement between the police and a local business crime reduction partnership did not breach the Data Protection Act 2018. Bates Wells’ Senior Associate Mairead O’Reilly comments “Although the case related to data sharing in a law enforcement context, it contains helpful lessons on what the courts will look at in deciding whether an organisation has put in place appropriate organisational measures for safeguarding against unlawful processing. The Court will look at the overall package of measures that an organisation has put in place and will seek to avoid being too prescriptive about the wording of documents. In this case the court looked at the overall suite of documents in the round which included an information sharing agreement, Legitimate Interests Assessment and privacy notice and deemed that these taken together were appropriate measures.


Fundraising

See Coronavirus – Gift aid above.
 
Fundraising Regulator
 
The FR held its AGM last week and published its latest accounts and report. See here for the Annual Review 2019/20 and here for the Annual Report and AccountsAccording to Civil Society Media, the accounts and report show that:
 

  • 20 charities refused to pay the levy, and 63 ignored requests to pay – but this is the lowest rate since the FR began.  1,877 charities did pay the levy.
  • 1,971 individuals used the FPS to suppress contact from charities, and a quarter used the service on behalf of a friend or relative, leading to 5,503 suppressions in total.  Overall usage of the FPS has gone down by 37% on the figures reported last year, which the FR says is part, due to postponed marketing activity. 

 
In this blog, Peter Lewis, Chief Executive of the Chartered Institute of Fundraising, looks back at the five years since the Fundraising Regulator came into being, and how the fundraising sector and fundraising regulation have evolved since then.

National Payroll Giving week

This week is the first ever National Payroll Giving week – see here for details.


Education

Government announces £50 million to support students impacted by Covid-19
The Universities Minister announced on 2 February that thousands of students will benefit from an additional £50 million to support them with financial pressures from the pandemic. This is in addition to the £20 million announced in December, bringing the total to £70 million for this financial year. Universities will distribute the funding and will be able to prioritise the funding to those most in need of help.
 
First phase of school transformation launched
The first phase of the Prime Minister’s school rebuilding programme launched last week with the announcement of the first 50 projects. These are supported by £1 billion in funding and mark the start of the School Rebuilding Programme, which is due to deliver 500 rebuilding projects over the next decade.
 
The government has announced the appointment of Sir Kevan Collins as the government’s Education Recovery Commissioner, to oversee a programme of catch-up aimed at young people who have lost out on learning due to the pandemic.


Health

The Department of Health and Social Care has published the government’s response to the recommendations in the House of Commons Health and Social Care Committee’s reporton adult social care funding and workforce which was published on 22 October 2020. 


Domestic abuse

The Domestic Abuse Bill 2019-21 has begun its committee stage in the House of Lords


Social finance and social impact investing

Save Social Investment Tax Relief (SITR): a tax relief supporting community investment. On behalf of organisations yet to use this tax relief and those that have already raised £15m using SITR, Big Society Capital and its partners including, Social Enterprise UK, Resonance and Co-operatives UK, are fighting to retain and develop SITR with urgency.

Big Issue Invest and Aberdeen Standard Investments launch UK Equity Impact Fund. Aberdeen Standard Investments, the global investment manager, has announced the launch of the UK Equity Impact – Employment Opportunities Fund in collaboration with Big Issue Invest (BII). The fund aims to generate returns by investing in companies which promote and implement good employment opportunities and practices. BII’s press release states that the “impact criteria will typically include companies paying above average wage rates, being located in deprived areas, offering training opportunities and/or employing young people with the majority of those being in the UK”.

Philanthropy: attempting the impossible. Citywealth takes a look at the role of philanthropy in the pandemic response, how vehicles like Donor Advised Funds (DAFs) are being used to make philanthropy more strategic, and how impact investing offers flexibility to invest for impact into for-profits. The article quotes a number of sector participants, including Bates Wells’ Senior Associates Sung-Hyui Park and Clarissa Lyons.

A recipe for success in tackling childhood obesity? Big Society Capital shares an update on its pilot £1.8m Good Food Fund, aiming to fund the development of businesses using innovative approaches to tackle childhood obesity. The update notes first investments into brands supported by the accelerator linked to the fund.


International development

In a new report the Government Actuary’s Department has assessed the ways that the International Federation of Red Cross and Red Crescent Societies can make the greatest use of available funds.


Faith based organisations

See under Tax and VAT above.


Public services

A new report from NCVO, ACEVO and Lloyds Bank Foundation for England and Wales highlights ways in which larger and smaller voluntary organisations can support each other in the competitive commissioning environment and collaborate to achieve greater impact for the communities they serve.  You can book your place for a free NCVO webinar on 10 February which will look at the findings of the report and discuss what makes successful collaboration between charities.


Public procurement

NCVO has published this blog about the public procurement Green Paper. 


Subsidies regime

The Business Secretary has set out plans for a new UK-wide subsidy control system.  The consultation will seek views from businesses and public authorities on a number of areas, including:

– whether the UK should apply its own additional principles on subsidy control, as well as those set out in the UK-EU Trade and Co-operation Agreement
– how best to ensure transparency across the system the possible roles and responsibilities of the independent body that will oversee the new system
– how this independent body could have some role in supporting enforcement of the principles, alongside normal judicial review standards
– how the system could seek to introduce exemptions consistent with our international obligations, such as ensuring subsidies of low value, those given to support natural disaster relief or in response to global economic emergencies

The consultation closes on 31st March.

The Department for Business, Energy and Industrial Strategy (BEIS) has launched a web-based service to search for subsidies awarded by the UK government since 1 January 2021.  The BEIS subsidy search service will allow searches to be made by name of the beneficiary company, industry sector, purpose of the subsidy, type of subsidy and the date the subsidy was awarded. However, BEIS notes that no subsidies have been published yet in 2021.


Company law

Company law reform
 
Bates Wells has responded to the two of the recent BEIS consultations on Corporate transparency and register reform:  Improving the quality and value of financial information on the UK companies register and Powers of the registrar
 
The consultations propose more digital filing with Companies House, and shorter deadlines for the delivery of accounts.  Our responses make the point that the consultations do not appear to take the needs of small and medium-sized charitable companies and community interest companies into account, and urge Government to work with the Charity Commission and CIC Regulator to make sure that any changes don’t impose a disproportionate burden on these organisations.


Scotland

Scottish Legal News reports OSCR has been unsuccessful in its appeals against the Upper Tribunal for Scotland’s decision to allow New Lanark Hotels Ltd and New Lanark Trading Ltd to be entered on the register of charities.  The Inner House of the Court of Session agreed the companies were charitable.
 
OSCR and Foundation Scotland have announced that they are preparing to launch a new project which could unlock additional funding for charities and other community and voluntary groups across Scotland. The Revitalising Trusts project aims to identify charitable trusts registered in Scotland that appear to be inactive and support them to reactivate by using funds that are lying dormant. 
 
OSCR has published a video about keeping your charity safe from Phishing and a video about updates to the Disclosure (Scotland) Act 2020.
 
OSCR has published the latest edition of its newsletter, OSCR reporter, which contains a round-up of recent news.


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 February 9, 2021.