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

To help you navigate this week’s content, the links below will take you straight to content by topic.

Charity Commission

Chief Executive speech – upcoming guidance and research

Charity Commission CEO David Holdsworth gave a speech at the recent Institute of Chartered Accountants in England and Wales (ICAEW) Charity Conference, during which he celebrated the importance of accountants within the charity sector and reflected on his first five months in office. He announced that the Commission will publish revised guidance on trustee payments and benefits this Spring, and will refresh its guidance on recruiting new trustees. The Commission is also working with Pro Bono Economics on in-depth research about trustees, which should be published in the next few months.

Civil Society has reported on other discussions at the ICAEW event, including comments from Holdsworth that AI does “give significant advantages, even on basics like administering your charity” but it also presents challenges, such as the Commission recently receiving AI-generated applications.

Church of England

The Commission is engaging with the Church of England about the need to improve its safeguarding arrangements. This follows the Makin Review, an independent review into how the Church of England handled allegations of serious abuse by the late John Smyth QC. The Church’s General Synod will consider safeguarding proposals and legislation in February, including options for new safeguarding structures. As part of its engagement, the Commission has sent a letter to all General Synod members who are also trustees of charities within the Church of England. This reminds trustees of their safeguarding duties, asking them to remain aware of those duties while debating and voting on the upcoming Synod business.

Safeguarding

The Parliamentary and Health Service Ombudsman (PHSO) has found failures in the Charity Commission‘s handling of a complaint about serious safeguarding concerns in a charity. Damian Murray complained that the Charity Commission and Department for Education did not respond properly to allegations of historic child sexual abuse at a school managed by a religious congregation (which was a registered charity). Part of the PHSO’s findings were that the Charity Commission failed to understand or consider all the relevant issues, some of its actions amounted to maladministration, and it did not act in line with its safeguarding guidance and risk assessment when making key decisions. PHSO recommended that the Commission addresses the failures, apologises to Murray, and pays him £1,000 in recognition of the injustice he has faced. A Commission spokesperson told Civil Society it has “accepted the PHSO’s recommendations” but does “not accept the PHSO has the jurisdiction to make specific findings relating to the reasoning behind any of our regulatory decisions”.

The PHSO investigated another case last year where it ruled, that the Charity Commission failed to properly handle serious safeguarding concerns relating to sexual exploitation at a charity.

Charity employee pay

Civil Society has shared reactions from the sector to an article in the Telegraph about pay for charity employees. It reports that the article found there are 44 employees across the sector who earn more than £400,000 and included comments from David Holdsworth that “large and complex charities must attract talented people to run them, but the public rightly expects the demands of executive jobs in charities to be balanced with the selflessness that underpins what it means to be charitable. So do we”. Civil Society has shared responses from charity leaders, with ACEVO noting that charity CEO pay has generally been “stagnant” at around £60,000 for a decade and various charity leaders critiquing Holdsworth’s comments on LinkedIn.

Extended opening hours

The Charity Commission has extended its opening hours to support charities which have a 31 January annual return deadline. The Contact Centre will be available from 8am to 6pm from 20-31 January. The Commission also has guidance available on how to submit an annual return.

Annual Public Meeting

If you weren’t able to attend the Annual Public Meeting last November, it is now available to watch on YouTube.

See ‘Investigations and complaints’ below.

Investigations and complaints

The Charity Commission has published a report on its statutory inquiry into Brighton Mosque & Muslim Community Centre (press release). The Commission’s engagement with the charity started when a former trustee was charged with (and later convicted of) encouraging terrorism in a speech at the charity’s premises. Before opening the statutory inquiry, the Commission issued an Official Warning and identified a dispute between the charity’s trustees at the time and a group who claimed they had taken over as new trustees. The inquiry found that the trustees should have known (based on previous issues) that the trustee who was charged with a terrorism offence was a risk to the charity. It also found that several trustees had not been appointed or removed properly. The Commission appointed an Interim Manager to take control of the charity and its finances. A new board of trustees has now been appointed.

Charity law cases

Atwal v Charity Commission for England and Wales [2024] EWHC 3451

The High Court gave permission for the Claimants to take charity proceedings, subject to a stay on those proceedings once issued, to allow for both the Charity Commission to act to resolve the issues in the charity (the Gurdwara in Wednesfield, Wolverhampton) and for further attempts at mediation between the parties.

The judge criticised the Charity Commission, which had previously refused to give the claimants permission to take charity proceedings, for not using its extensive powers in relation to the problems in the charity (which included that it was not registered when it should have been some years ago, lack of clarity as to the correct governing document, related governance issues and personal benefits to trustees) when it was obliged to do so, meaning that the claimants had had no choice but to resort to litigation.

Tax and VAT

An ITV News report has considered how the upcoming rise in Employer National Insurance Contributions will impact charities.

Sector general

Civil Society Group has written a letter to Chancellor Rachel Reeves ahead of the upcoming Spending Review in June 2025. It is signed by 22 charity leaders and outlines recommendations for Labour, including having a dedicated philanthropy champion, prioritising multi-year public funding, and reinstating mandatory reporting of corporate charitable giving.

The Directory of Social Change has shared a roundup of policies and initiatives likely to impact charities in 2025.

Fraud

The National Fraud Helpline wants to raise awareness amongst small charities of the authorised push payment (APP) fraud reimbursement scheme, as reported by Civil Society. The scheme is for charities with an annual income of less than £1 million. It is a mandatory reimbursement scheme for fraud victims which requires banks and other payment service providers to reimburse victims of relevant APP fraud up to £85,000.

Climate change and environment

The government has announced that legal challenges to major infrastructure needed for growth and clean energy will be restricted. Prime Minister, Keir Starmer, said that “the current first attempt known as the paper permission stage – will be scrapped” and “primary legislation will be changed so that where a judge in an oral hearing at the High Court deems the case Totally Without Merit, it will not be possible to ask the Court of Appeal to reconsider.”

The government has announced the creation of a new Nature Restoration Fund, which aims to “enable infrastructure builders to meet their environmental obligations faster and at greater scale by pooling contributions from developers to fund larger strategic interventions for nature. The press release notes that “this approach will mean the burden of individual site-level assessments and delivering mitigation and compensation is reduced” and “in many cases, a single payment will enable development to proceed.” A delivery body such as Natural England “will then take responsibility for securing positive environmental outcomes that infrastructure developers are not in a position to implement independently.”

Bates Wells’ Head of Purpose and Impact Development Angela Monaghan, Partner Lawrence Simanowitz, and Trainee Solicitor Leonie Brabant have shared an update which helpfully summarises key elements from the Climate and Nature Bill.

Join our webinar on 12 February, where we will be joined by the Ethical Trading Initiative to share practical tips on ethical sourcing and sustainable supply chains.

Safeguarding

See ‘Charity Commission’ above.

Fundraising

In a recent speech the Gambling Commission’s Chief Executive, Andrew Rhodes, highlighted that lotteries remain the largest area of gambling participation and large society lottery sales have surpassed £1 billion for the first time.

The Mass Participation Pulse Report 2025 has been published by Massive, which looks at mass participation events in the UK (e.g. triathlons and marathons). It finds 2024 was a strong year, with reports that many event entry levels are now going beyond 2019 pre-pandemic levels and participants are travelling further and spending more to take part.

See ‘Data and privacy’ below for an update about electronic marketing.

Data and privacy

Civil Society has reported that the government has accepted an amendment to the Data (Use and Access) Bill to allow charities and non-commercial organisations to use “soft opt-in” for electronic communications (in the same way as commercial organisations). Claire Stanley, Director of Policy and Communications at the Chartered Institute of Fundraising, called this a “significant win for the sector and will finally put charities on a level playing field with commercial organisations”.

Following a letter from the Prime Minister, the Chancellor, and the Business Secretary last December, the Information Commissioner’s Office (ICO) has published a letter in response which outlines its proposals to support economic growth and investment. Proposals include producing a single set of rules for those developing or using AI and reducing costs for small and medium enterprises.

The ICO has shared a new online tracking strategy designed to empower people to control how they are tracked online. As described in this news item, part of its strategy includes new guidance on ‘consent or pay’ models (where people can either access a service for free if they agree to personalised adverts, or avoid personalised adverts but pay to access the service). Stephen Almond, the ICO’s Executive Director of Regulatory Risk, has published a blog about online tracking and the ICO’s vision. One of its main goals this year is to ensure the top 1,000 UK websites are compliant.

AI

See ‘Charity Commission’ above.

The government has announced that a new package of AI tools, nicknamed Humphrey, will be available to civil servants which aim “to streamline public services, eliminate delays through improved data sharing, and reduce costs, including consultant spending.” For example, one tool called “Lex” can help “officials research the law by providing analysis and summarisation of relevant laws for specific, complex issues.” This follows the publication of a review of technology and data in the public sector by the government, which assesses how effectively the public sector uses digital technology. See press release.

Social media

Civil Society has reported on responses in the sector to Meta’s announcement that it will stop using third-party fact-checkers and move to a ‘community notes’ system on Facebook and Instagram (starting in the US). Civil Society notes that Charity Comms has published guidance for charities on using social media (for example, around moderation and community management).

Public procurement and subsidy control

The Competition and Markets Authority’s Subsidy Advice Unit has provided a response to the Department for Business and Trade’s consultation on refining the UK subsidy control system which outlines their view on the threshold for mandatory and voluntary referral of subsidies, and the creation of a new streamlined route focused on community regeneration and arts and culture.

The Government Commercial Function has updated its information and guidance for suppliers working with the public sector. This includes video guides for suppliers, ahead of changes under the Procurement Act 2023 which will come into force on 24 February.

Company law

Two key dates have been confirmed:

  • From 25 Feb 2025 – Companies House should be able to:
    • expedite the striking-off of those companies that have been formed for a false basis; and
    • carry out checks on Authorised Corporate Service Providers (ACSPs) to authorise them to carry out verification services.
  • From 25 March 2025 – individuals should be able to start voluntarily verifying their identity. This means that if you are a director or PSC of an existing company, or someone who makes filings on behalf of a company (a company secretary, for example), you’ll be able to verify directly with Companies House through GOV.UK One Login (or via an ACSP). We will provide you with more information on this nearer the time.

Commercial law

The Department for Business and Trade has launched a consultation as part of a review into the UK Internal Market Act. The press release notes that the review will “consider how to provide the right balance between devolved decision-making on regulation and protecting the integrity of the internal market.” The consultation closes on 3 April 2025.

We’re holding a webinar on 6 March to cover the key changes coming in under The Digital Markets, Competition and Consumers Act 2024, which includes significant changes to subscription-model income for charities and not-for-profits. Bates Wells’ Head of Competition Lindsay Draffan, Partner Hannah Lyons, and Senior Associate and Parliamentary Agent Mark Abbott have also shared a summary of the upcoming changes.

Northern Ireland

The Charity Commission for Northern Ireland has shared a reminder for charities with an annual reporting deadline of 31 January to file on time.

Housing and homelessness

The Ministry of Justice has launched a consultation on increasing civil legal aid fees for Housing and Debt work, and Immigration and Asylum work, which as the press release notes could provide a “£20 million a year boost in legal aid” for vulnerable people at risk of unfair eviction or homelessness. The consultation closes on 21 March 2025.

Social enterprise

How do social enterprise acquisitions work? Buzzacott, an accountancy firm, outlines for Pioneers Post the motivations behind social enterprises pursuing an acquisition, the differences between acquisitions in the traditional commercial and social enterprise sectors, risks for social enterprises, and how these can be mitigated.

The Schwab Foundation for Social Entrepreneurship has published Social Innovation in Action 2025: Schwab Foundation 2025 Awardees and Impact (press release). The report celebrates the Schwab Foundation’s community of social entrepreneurs and innovators by announcing the 2025 Schwab Foundation Awards winners and outlining the impact of the foundation across the world.

Euclid Network has launched the third edition of its European Social Enterprise Monitor Report 2023 -2024 (executive summary), which collates responses from a survey-based study on social enterprises in Europe. Key findings include that social enterprises reinvested an average of 80.7% of profits into their missions and that at least 70.1% of social enterprises engaged in impact measurement and management reported multiple challenges with the process. Pioneers Post reported on the findings, including noting that a “lack of political support is a major barrier for European social enterprises”. Coop News also reported on the findings and, in particular, the panel discussion that took place at the launch event at Davos.

Labour MP Neil Coyle posed a question to the Secretary of State for Business and Trade about whether his Department plans to allow not-for-profit Community Interest Companies (CICs) to receive the associated advantages of non-profit organisations. Department of Business and Trade Parliamentary Under Secretary of State Justin Madders MP confirmed that there are currently no plans to change the associated advantages of the CIC legal form.

The Schwab Foundation for Social Entrepreneurship has published State of Social Procurement 2025. The report outlines social issues in global value chains, provides insights into the “business case” for social procurement, highlights regulatory developments and uses case studies from around the world to “showcase how a maturing ecosystem for social procurement drives positive impact.” The report argues that, by buying from social enterprises, companies can support fair labour practices and reinvest in local economies, whilst strengthening their supply chains.

Access – The Foundation for Social Investment, in partnership with the Centre for Sustainable Energy, has published The Role of Non-Profit Organisations in the Provision of Retrofit Services in England. The report explores the challenges (lack of funding, competition and limited skilled workers) and opportunities (uniquely positioned to address both the technical and social challenges of retrofitting) faced by non-profits operating in the sector, and outlines recommendations to support the sector.

Social Investment Business outlines “why the government’s target of 600,000 heat pump installations per year by 2028 is so far off track” and the support that is needed for the community sector to install more heat pumps, such as funding and lower electricity costs.

Social investment/social impact investment

Better Society Capital and the Impact Investing Institute have responded to the Government’s Local Government Pensions Scheme (LGPS) consultation, “Fit For The Future”. Key points include that place-based investing can provide a “compelling investment opportunity for pension funds that can be embraced by LGPS pools” and that “there are growing opportunities to invest in areas such as social housing, SME finance and renewable energy… that match LGPS risk and return objectives.”

Access – The Foundation for Social Investment has published a blog exploring the challenges the organisation faced when trying to fulfil two EDI goals: undertaking an independent audit of the board, team and committees, and being transparent about gender and ethnicity pay gap data in order to address disparities.

Following the introduction of the European Commission’s new mandate, Impact Europe is aiming to engage with European policy and political leaders to showcase impact stories that align with the EU’s top priorities. Impact Europe is calling for impact investors willing to share their “stories of financing impactful enterprises or projects across the EU” to help support advocacy efforts.

The United Nations Department of Economic and Social Affairs has published a policy brief, Reimagining financing for the Sustainable Development Goals (SDGs) – from filling gaps to shaping finance, authored by Prof. Mariana Mazzucato, Founding Director of the UCL Institute for Innovation & Public Purpose. The brief argues that “the prevailing gap-filling approach (mobilizing additional financing rather than embedding the SDGs at the core of economic and financial systems) to SDG financing has proven inadequate, failing to deliver the scale, impact or equity required.” The brief focuses on blended finance and outlines several recommendations which aim to shift blended finance away from “filling gaps” to “shaping finance” in alignment with the SDGs, such as installing mission-driven frameworks and prioritising quality of finance over its quantity. Pioneers Post reported on the publication of the brief, including commentary from the sector.

Faith-based organisations

See above under ‘Charity Commission’.

International development

Devex is reporting on President Donald Trump’s announcement of a freeze on USAID funding. One of Trump’s early actions in office was an executive order, which placed a 90-day pause on aid spending and this was followed by guidance from the State Department’s Office of Foreign Assistance ordering an immediate pause on new foreign aid spending, as well as a stop-work order for existing grants and contracts. Briefings on the US law side are available from this firm, and our briefing for English charities and INGOs which may be affected sets out considerations on this side of the Atlantic.

Minister for the Middle East, Hamish Falconer, visited the UN where he called for greater support for the UN agency for Palestine refugees (UNRWA) so that it can continue its ‘vital work in Gaza to deliver aid to those most in need.’ Falconer also announced that the UK is “increasing its humanitarian spend on Yemen by £5 million this financial year.”

Ambassador James Kariuki, UK Deputy Permanent Representative to the UN, delivered a speech at the UN Security Council meeting on Children in Gaza where he noted that “aid is now flowing in at scale” and that “humanitarian actors must be allowed safe and unfettered access throughout Gaza, including the north and alongside this we need to see a massive increase in commercial delivery.”

Archie Young, UK Ambassador to the General Assembly, delivered a speech at the opening session of the UN Committee on Non-Governmental Organisations where he noted that “the vital work of civil society organisations is not recognised by all member states” and that “although this Committee’s principal role is to facilitate NGO access, we continue to see deliberate delays and obstructions to its work.” Young added that in particular, “NGOs working on important human rights issues or representing marginalised groups are the targets of these deferrals facing hostility, intimidation and reprisals.”

International Development Minister, Anneliese Dodds, visited the HALO Trust where she announced that the government will provide more than £7 million to the organisation to support its work in Ukraine and Afghanistan, as well as a £250,000 HALO programme to “dispose of 165 tons of unserviceable and unsafe ammunition and explosives from stores in Hargeisa, Somaliland.”

Culture and creative

Heritage Minister, Sir Chris Bryant, has announced that the Listed Places of Worship Grant Scheme will be extended into the next financial year. The scheme gives grants towards VAT paid on repairs and renovations to the UK’s listed sites of worship, with £350 million being awarded under the scheme to date.

Education

General

The Independent Schools Council has announced that its legal challenge against Labour’s VAT on fees policy will be fast-tracked through the High Court.

Education Secretary, Bridget Phillipson, delivered a speech at the Bett Show 2025 where she outlined the Department for Education’s (DfE) plans to “harness technology to transform teaching.” Key announcements included:

  • The AI Product Safety Expectations have been published which outline how AI tools can be used in the classroom and “sets out clear technical safeguards including prioritising child-centred design and enhanced filtering of harmful content.” Global tech firms like Google, Microsoft, Adobe and Amazon Web have helped to develop the framework.
  • An update on the DfE’s policy position on AI, which aims to give schools and colleges the clarity and encouragement on how to use AI in the classroom.
  • The appointment of the Chiltern Learning Trust and the Chartered College of Teaching to develop online resources to support the safe and effective use of AI for teachers, teaching assistants and leaders. The resources will be ready in Spring 2025.
  • All new teachers will be trained on the effective use of assistive technology to support children with special educational needs and disabilities (SEND).
  • The development of a new service, Plan Technology for Your School, which will aim to help schools prioritise where to invest in tech, based on a personalised assessment of their needs.
  • The commission of new research to see how different agencies can work together to encourage schools to use assistive technology for children with SEND as effectively as possible.

See press release.

Schools

The Education Secretary, Bridget Phillipson, provided oral evidence to the Education Committee on SEND provision, the Children’s Wellbeing and Schools Bill, VAT on private schools and whether smart phones should be banned in schools. Key points included that the DfE are examining “what the mechanism might be for determining school funding into the future” and that a report card system “will not be an easier system for schools” and instead will be a “clearer, firmer process.”

Ofsted has updated guidance for inspectors on how to carry out non-association independent schools inspections. A summary of changes has been published and includes changes which emphasise “that the lead inspector will inform the headteacher if there is emerging evidence that the inspection could be suspended in line with the criteria set out in the ineffective safeguarding section of the handbook.”

Ofsted has updated the handbook for additional inspections of independent schools. A summary of changes has been published and includes changes that where a school “is co-located with a registered child and adolescent mental health service provider, the lead inspector must read the Care Quality Commission’s most recent inspection report on the provider.”

In the second sitting of a committee debate on the Children’s Wellbeing and Schools Bill, Minister of State (education), Catherine McKinnell, noted that the Bill will be amended so that it sets a “floor on pay that requires all state schools to follow minimum pay bands set out in the school teachers’ pay and conditions document” and requires “academies to have due regard to the rest of the terms and conditions in the school teacher’s pay and conditions document.”

The Education Hub has published a blog which outlines how the DfE’s Climate and Sustainability Strategy is preparing schools to tackle climate change. The blog notes that the DfE hope to “have all schools implementing their own Climate Action Plans by 2025.”


Disclaimer – The information contained in this update is not intended to be a comprehensive update – it is our selection of the website announcements made in the week up to last Friday which we think will be of interest to charities and social enterprises. The views expressed in items we’ve included are the views of the named authors/sources, and should not be taken to be the views of Bates Wells, its partners or employees. The content in this update is necessarily of a general nature – specific advice should always be sought for specific situations.