Bates Wells Briefing for Charities & Social Enterprises | 25 May

Our weekly round up of news and updates from across the sector.

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Charity
Sectors
Not For Profit
Type
News

Bates Wells Highlights

Have you considered applying for a sponsor licence in order to attract and retain key talent following Brexit? Here are our top 10 tips to help you navigate the sponsor licence process.

What lessons does the Kids Company case hold for the sector? And how can charities meet some of the challenges faced by their trustees today? Find out in our useful Charity and social enterprise update: trustees in the spotlight.

Don’t forget to download our yearly round-up of useful tips for faith-based organisations if you haven’t already.


At a glance

NCVO has published the latest results from its Respond, Recover, Reset survey. 

Businesses that deferred VAT payments last year have one month left to join the VAT Deferral New Payment Scheme.
 
The Chartered Governance Institute UK & Ireland has published model terms of reference for the Remuneration and Audit and Risk committees at academy trusts or multi-academy trusts.  
 
The Competition and Markets Authority has issued draft guidance for all businesses making ‘green’ claims in relation to their products or services.


Coronavirus – regulations

The current restrictions are set out in the Health Protection (Coronavirus, Restrictions) (Steps and Other Provisions) (England) (Amendment) Regulations 2021 (SI 2021/585).


Coronavirus – volunteering

Last week DCMS updated its guidance on how to safely and effectively involve volunteers in their work during the pandemic. This now reflects Step 3 of the government’s roadmap for easing lockdown restrictions across England.  It still says that people should continue to volunteer from home where possible, but acknowledges that they can volunteer outside their home if they don’t need to self-isolate. 


Coronavirus – impact on the sector

NCVO has published the latest results from the Respond, Recover, Reset survey. Here are some of the headlines:

  • 24% of organisations have seen an increase in volunteers and 36% have seen a decline
  • The short-term financial position is improving, with slightly more organisations reporting improved position than those reporting deteriorating position
  • The short-term demand for services, particularly in sports, culture, arts and village halls etc is rising as we come out of lockdown.

Charity Commission

Blog – the Register of charities

The commission has posted a blog about the new Register of Charities which was launched in September 2020.

CC consultation on responsible investment guidance

A number of organisations have published their responses to the Commission’s consultation which ended on 20 May 2021 including, for example, Philanthropy Impact and Charity Finance Group.

Charity Finance Group has said the Commission must go further in its updated guidance so that charities feel empowered to go beyond ‘responsible’ investment and actively consider a sustainable investment approach.  CFG is urging the Commission to update the existing guidance to ‘ensure trustees are aware of the potential risks from climate change, and actively encourage them to mitigate these risks in their investments.’

New inquiry

The commission has announced that it has opened an inquiry into London-based grant-making charity the Knightland Foundation, due to concerns surrounding the charity’s governance and finances. The inquiry will also examine whether potential conflicts of interest and connected party transactions have been properly managed and whether there has been any unauthorised trustee benefit. The commission has appointed joint interim managers to help address the concerns at the charity.

Inquiry report

Name of organisation

Afghan Poverty Relief

Inquiry report

CC press release

Brief description:

The inquiry was opened following a referral from the Metropolitan Police.

The regulator analysed: the charity’s bank accounts, as well as personal and business accounts associated with two of the charity’s former trustees. It found that during the 4 years to 2011, over £254k was withdrawn from the charity’s accounts, and over £215k was paid into personal and business accounts linked to two of the charity’s former trustees. One trustee was also found to have breached an order of the Commission, including not to accept donations from members of the public on behalf of the charity.


Tax and VAT

Businesses that deferred VAT payments last year have one month left to join online to pay in monthly instalments under the VAT Deferral New Payment Scheme. The online portal for the new payment scheme closes on 21 June 2021.


Governance

The Centre for Charity Effectiveness has launched a new online resource on the benefits of lived experience on nonprofit boards.

Our latest Charity and Social Enterprise update for summer 2021 looks at Trustees in the Spotlight – in particular the implications of the Kids Company judgment.  It has articles on:

  • The broad impact of the case on charity trustees
  • The implications of the case for CEOs, and how they can avoid being seen as ‘de facto’ directors
  • The principles of effective delegation
  • A useful guide to trustee induction
  • Removing a trustee from a board
  • Resilience and wellbeing for boards
  • Trustee liability
  • The potential protections of indemnity insurance cover

Sector General

Civil Society Media reports a new report by the House of Lords Public Services Committee says government must involve civil society organisations “in the design, delivery and evaluation of ‘levelling up’ funds”.

This blog, by Leah Davis, NPC’s Head of Policy and External Affairs explains where charities can work with metro-mayors as we rebuild from Covid-19.


Climate change

The Competition and Markets Authority has issued, for consultation, draft guidance for all businesses making ‘green’ claims in relation to their products or services. The draft guidance is designed to help those businesses understand and comply with their existing obligations under consumer protection law. It follows the CMA’s investigation last year into how so called ‘eco-friendly’ products and services are being marketed and whether consumers are being misled by such claims.  The consultation closes on 16 July 2021, so that final guidance can be published by the end of September 2021.


Data protection

Importing data from the EU

The European Parliament has adopted a resolution, calling on the European Commission to review its findings on adequacy for the UK. The resolution casts some doubt over whether the UK will be granted adequacy by the European Commission. Charities who import personal data from the EU should carefully monitor this space.

ICO data sharing code of practice

The Information Commissioner’s Office (ICO) has confirmed in a statement that the new data sharing code of practice was laid before Parliament on 18 May 2021 and in the absence of any objections, will come into force after 40 sitting days.  For a summary of key points in the new code of practice see this Briefing by Bates Wells’ senior associate Mairead O’Reilly.

ICO fines

The ICO has:

Fine for failure to appoint data protection representative

The Netherlands supervisory data protection authority (the Autoriteit Persoonsgegevens or AP) has fined Locatefamily.com (an organisation outside the EEA) for failure to appoint a data protection representative (a requirement under EU GDPR).  There are similar obligations to appoint a DPR in the UK under the United Kingdom General Data Protection Regulation. 


Education

Schools

The Chartered Governance Institute UK & Ireland has published model terms of reference for the Remuneration and Audit and Risk committees at academy trusts or multi-academy trusts.  It is compliant with the requirements of the Department for Education and the Education and Skills Funding Agency guidance.

The ESFA has published its latest update on academies.

Operation Encompass is a partnership between police and schools and is now in place across all 43 police forces in England and Wales.  It offers training and information sharing to support children affected by domestic abuse and provides resources for schools online.

Ofsted is to inspect online schools under a new accreditation scheme, due to be launched in September 2021. The scheme is only applicable to education providers operating ‘online-only on a permanent basis’.

The government has announced that four local areas will receive £10 million in investment into targeted initiatives as part of their commitment to ‘levelling up’ education across the country.

A report published by the Institute for Fiscal Studies says that £4.3bn of the DfE’s additional Covid spending will be taken from existing budgets or underspends in other areas.

Further Education

The ESFA has published its latest update on further education.

Ministers have emphasised the importance of keeping degree apprenticeships accessible to the most disadvantaged groups.  Analysis conducted by FE Week found that the fears over a ‘middle-glass grab’ on apprenticeships is valid, with the figures showing a general downward trend in apprenticeship starts from individuals in the most deprived areas.

The DfE has launched an £83 million fund to ensure colleges can accommodate an expected increase in pupils aged 16 to 19.  The fund will not be available to independent training providers and school sixth forms.


Care leavers

£50m funding has been announced to extend support to care leavers.   and proposals launched to introduce national standards in unregulated accommodation. There is also a consultation proposing national standards that all unregulated settings accommodating 16- and 17-year-old children in and leaving care would have to meet.


Health

The Parliamentary Health and Social Care Committee has launched a short inquiry into how the social care system is supporting those living with dementia, and their carers. The inquiry will be held over two sessions—one will consider the experiences of those living with dementia, currently available support and the support that should be available, and the other will contemplate the government’s commitment to the support.


Social investment and impact investing

See above under Charity Commission, Responsible investment. 

Exploring the challenges investors face when assessing venture managers for impact. Reflecting on a roundtable, Katie Fulford-Smith (Investor Relationships Director, Big Society Capital) summarises the key challenges investors face when assessing managers for impact and considers how Big Society Capital can work with investors to address these challenges.

Responsible Finance – Setting up for success. Responsible Finance has published a report to celebrate the 6,000 start ups, businesses and social enterprises that responsible finance providers have set up for success in 2019/2020 with £263 million of investment.  

Sunshine social enterprise: UK’s largest community-owned solar park that’s an ‘example for the world’. Pioneer’s Post reports on the extraordinary interest in community shares which, when coupled with government funding and a loan from Triodos Bank, is being used to construct the UK’s largest community owned solar park. To fund Ray Valley Solar, Low Carbon Hub (a social enterprise in Oxford) raised £4.5m through a community share offer. The original target was £1.5m by March 2021, but this was extended to £3m and the offer was closed early due to “unprecedented” interest.


Rehabilitation of offenders

The government has announced the 26 charities and companies which have been awarded around £200 million of Government funding to help cut crime in the new probation system.


Registration of trusts

New requirements to register non-taxable trusts with HMRC’s Trust Registration Service were introduced under the Money Laundering and Terrorist Financing (Amendment) (EU Exit) Regulations 2020.  Registration is likely to be required from later in 2021, once HMRC has adapted its systems to enable registration of non-taxable trusts.

Charitable trusts are generally excluded from the new requirements under a specific exemption which applies to trusts which are registered as a charity in the UK, and to charitable trusts not required to register in England and Wales under s 30(2) Charities Act 2011(broadly, charities which are exempt or excepted from the requirement to register, or with annual income below the £5,000 registration threshold). 

There is some uncertainty about the position of restricted funds and endowments held by corporate charities which are not separately registered as linked charities with the Charity Commission, assets held as nominee or on bare trust for charity, and non-UK charities that are recognised by HMRC for UK charity tax purposes.  HMRC’s new dedicated manual on the Trust Registration Service, which contains a specific section on the exclusion for charitable trusts, doesn’t address these uncertainties, but does include more guidance on the position of charitable trusts where an application for registration is pending. 


Northern Ireland

On 25th June, CCNI will launch new research into public trust and confidence in Northern Ireland’s charities.


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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 May 25, 2021.