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

Charity Commission

Commission CEO Helen Stephenson has published a blog post following Trustees' Week, Opening the doors to charity trusteeship. She emphasises that trusteeship is open to everyone and that people of all ages can contribute valuably to charity governance.

Charity investment

Bates Wells is proud to be part of the Charity Investment Governance Principles project announced last week, which will explore best practice in decision-making around charity investments. Charity Finance Group will host the project and the project's steering group also includes representatives from the Association of Charitable Foundations; National Council for Voluntary Organisations; Wales Council for Voluntary Action; and the Secretariat of the Charities Responsible Investment Network. Charity trustees and leaders, and those organisations with an interest in investment governance, are invited to register their interest to engage with the project by completing this short form. The principles are expected to be published in summer 2024 and will complement the Charity Commission's guidance on investing charity money, CC14.

Bates Wells partner Luke Fletcher who joins the group as an expert adviser comments, "We have seen the value of the Charity Governance Code in defining and raising standards of best practice in charity governance generally. The Charity Investment Governance Principles have the potential to do the same for charity investment, and to enable charities to approach investment decision-making as a whole with greater confidence and clarity. Charity investors will have the opportunity to inform and help shape the principles over the next few months."

Charities and banking

Civil Society reports that some high-street banks have pledged support for the charity sector in response to the charity regulators' recent letter calling for 'urgent action' by the banks to improve their services to charities. Lloyds, Metro Bank and Santander have committed their support, Barclays said it "will be responding directly to the regulators" and HSBC said they were "considering their response".

Governance

On Wednesday this week NPC is running a free seminar "Doing trusteeship differently" where it will explore what we can learn from organisations who structure their governance in alternative ways – from upending top-down models of trusteeship, to sharing responsibilities among directors.

Bates Wells' Philip Kirkpatrick has spoken before about his alternative 'assured unitary governance' model for charity boards, and you can read his thoughts here.

Tax and VAT

Update to VAT Notice 701/1 (Section 2.1 has been updated to remove Isle of Man, EU, Iceland, Liechtenstein and Norway as countries an organisation must be based in to claim charity VAT reliefs).

Sector General

A study from the Ethical Property Foundation, a charity offering property advice to third sector organisations, suggests that thousands of UK charities are at risk of eviction, due to occupying their property under a "tenancy at will". This means they occupy with the consent of the landlord but can be evicted at any time.

Research from charity think tank New Philanthropy Capital shows that senior charity leaders themselves need to actively engage with people with lived experience of social issues, in order to avoid 'tokenism'.

Equality, Equity, Diversity and inclusion

The Office for National Statistics has released earnings statistics for different ethnic groups, using data from the Annual Population Survey between 2012 and 2022 and applying regression analysis to provide more insight into factors that affect pay. The ONS picks out these key points:

  • Black, African, Caribbean or Black British employees earned less (£13.53) median gross hourly pay than White employees (£14.35), which has been consistent since 2012.
  • After holding personal and work characteristics constant, to provide an adjusted pay gap based on a like-for-like comparison, it found that UK-born White employees earn more on average than most ethnic minority employees.
  • When adjusting for pay-determining characteristics, the pay gap narrows and in some instances reverses: for example UK-born Black, African, Caribbean or Black British employees, move from earning 6.5% more to earning 5.6% less compared with White employees.

Fundraising

Changes to fundraising levy

The Fundraising Regulator has announced proposals to increase the fundraising levy and is seeking views from people within charitable organisations who are responsible for paying the levy or maintaining registration with the regulator. It is not clear that this is an open consultation, rather, the regulator contacting specific individuals/organisations and collating those responses.

Migration of Facebook/Instagram Fundraising to PayPal Giving Fund

From November 2023 donations made by an individual to a charity or a fundraiser on Facebook or Instagram are legally made to PayPal Giving Fund, who is also responsible for gift aid claims. Charity Finance Group has released a recording of a session where members of its Gift Aid Practical Issues Working Group were able to pose their questions to PayPal.

Legacies

New data from legacy information company Smee & Ford shows that charity legacy income is up by almost 8% over the past year, driven mostly by growth in the value of estates left to charities. The data also shows that the cost-of-living crisis has not had "an immediate impact" on legacy income but it may well do in the future.

Gambling

Gambling Minister, Stuart Andrew spoke at the GambleAware annual conference. He said that they are working to get most of the proposals outlined in the gambling white paper, including the proposed levy, 'by the summer of next year'.

AI

As AI systems become more prevalent in the sector, Eleonor Duhs has put together a short top tips piece on the practicalities of deploying AI in a way that complies with data protection law and ensures that outcomes are legal and ethical.

Also see under Data protection below.

Elections and campaigning

Bates Wells' Suhan Rajkumar and Max Dowbenko will be speaking with Bond in a webinar on 'understanding electoral campaigning rules' on 22 January 2024. You can register to attend here.

Data protection

The Information Commissioner, John Edwards, gave the keynote speech at TechUK Digital Ethics Summit 2023, highlighting the ways that the Information Commissioner's Office is working to protect personal information when using AI. This includes initiatives such as 'Sandbox' where developers of new products or services can work with the ICO to ensure data protection is included from the start and the 'Innovation Advice Service' which allows organisations to pose questions to the ICO on data protection issues with their new product, service or business model.

Public procurement and subsidy control

The Cabinet Office has released its 'knowledge drops' in relation to the Public Procurement Act, which are intended to provide a high level overview of the changes to procurement regulations for three audiences: (1) contracting authorities; (2) suppliers who deliver contracts to the UK public, utilities and defence sectors; and (3) small and medium sized enterprises and voluntary, community and social enterprises.

UK Migrant Rules

Care Quality Commission (CQC)

The CQC has provided clarification about the new rules for health and care organisations and sponsoring care worker visa applications. The Home Secretary's announcement about legal migration, sets out the requirement for 'care firms in England to be regulated by the Care Quality Commission in order to sponsor visas'. CQC has made it clear that only health and care organisations which fall under the scope of the CQC regulations are able to sponsor care worker visa applications. Some organisations which deliver or coordinate health and care services are not registered with the CQC, as the services they provide fall outside the scope of its regulation, such as where a care worker or nurse works directly for the individual receiving care.

Bates Wells' Chetal Patel has also commented on the new migrant rules here.

Company Law

Company Names Tribunal

The exempt charity, Imperial College London (full legal name Imperial College of Science, Technology and Medicine) has objected to the use of the name 'Imperial College Ltd'. The application was undefended and an order was made for Imperial College Ltd to change its name within a month.

Scotland

OSCR has published guidance on charities' online annual return deadlines and how to use OSCR Online to submit the return.

OSCR has also published its monthly newsletter 'OSCR Reporter' for December 2023.

Health and social care

Earlier this year the government ran a consultation on visiting in care homes, hospitals and hospices and whether secondary legislation should be introduced to protect this right. They have now produced their response to the consultation which concludes that they will work with the Care Quality Commission to introduce this standard, through statutory regulations, and also to publish guidance for the sector.

The Chartered Institute of Public Finance and Accountancy ("CIPFA") has published Charging for adult social care in England: Reform and routes forward, which analyses the government's proposed reforms to the funding and charging of care costs which are projected to come into force in October 2025. The report states that the proposals have benefits and disadvantages, and present issues concerning the fair treatment of accumulated care needs, wealth and asset depletion and varying impacts across the country. While the proposals address some of the problems with the current system, they will also come at a "significant cost to local authorities", with apparently insufficient funding and allocated time to support their implementation. CIPFA has made recommendations to improve the government's proposals, including:

  • Producing a new impact assessment for social care charging reform.
  • Plugging the local authority funding gap.
  • Introuducing a cap on care costs which includes local authority contributions.

The Chair of the Child Safeguarding Practice Review Panel has announced its review into child sexual abuse within the family environment, which started in November 2023 and is expected to conclude within 6 months.

See also under UK Migrant Rules above.

Housing and homelessness

The Supreme Court has unanimously dismissed a local housing authority's appeal against a Court of Appeal's decision that the local housing authority's lack of financial or other resources should not be taken into consideration by a court, when considering whether to grant a mandatory order to enforce its statutory duty under section 193(2) of the Housing Act 1996.See here for a summary from the barristers who acted for the claimant. (R (Imam) v London Borough of Croydon [2023] UKSC 45 (25 November 2023).

Social enterprise

Social Enterprise UK's 2023 State of Social Enterprise report sets out how social enterprises are 'mission critical' to fixing the problems of the UK economy. In an article on the subject, Social Enterprise UK states that the sector is not only "doing right by society and the environment" but "performing well in economic terms", with £78bn collective turnover and £1.2bn collective profit. The report found that the sector's full potential is held back by systemic challenges, including access to finance.

Social investment/social impact investment

At COP28, British International Investment announced six new climate finance investments totalling $55m. These include international investments in solar, climate adaption and mitigation and climate tech.

COP28: European co-op banks explore green finance and sustainable food. Coop News (Co-operative Press Ltd) reports from COP28 where the European Association of Cooperative Banks convened a webinar for the sector to discuss how it can support building sustainable food systems and improving food security. One participant described the example of Rabobank working with the Dutch government to support agricultural loans aimed at supporting livelihoods and preserving nature.

Faith-based organisations

New Shadow Minister for Faith

Sir Keir Starmer has appointed Baroness (Maeve) Sherlock as Shadow Minister for Faith. Baroness Sherlock has served as a member of the House of Lords since 2010 and is also an ordained priest in the Church of England.

Faith security training

The Home Office has launched a pilot scheme for the Faith Security Training project. This is a brand-new course developed by the Home Office that will be a free learning resource for faith communities. It aims to raise awareness of security risks and how to respond to them. The Home Office is inviting members of faith communities, particularly people in positions of leadership or responsibility for security at places of worship, to attend and provide feedback on the content and delivery. If you are interested in attending one of the pilot sessions, you can complete an expression of interest form here.

Education

Schools

The Association of Directors of Children's Services has published a policy paper A future vision for the education system, which urges the government to produce a long-term vision and strategy for education by highlighting key issues in the sector, including:

  • Greater inclusivity, SEND support, improved attendance, and minimised exclusions.
  • A shift away from focusing on academic attainment, and towards "the broader purpose of education – preparing young people to become active citizens in the future."

The Department for Education (DfE) has published a blog post, 'AI in schools – everything you need to know', with key information on the steps they are taking to develop AI in education. This includes a call for evidence on AI, an organised 'hackathon' and investments in AI tools.

FE Week reports that The Institute for Fiscal Studies' annual report on education shows between 2010-2021, the most deprived secondary schools saw more than double the budget cuts than the least deprived.

A DfE press release announces The Cyber Explorers Cup, a competition for UK schools to test their cybersecurity skills and compete for tech prizes, has been launched. More than 60,000 students will participate in the free learning and testing process which aims to introduce important cyber security concepts to Key Stage 3 pupils.

Higher Education

Robert Halfon, Minister for Skills, Apprenticeships and Higher Education, gave a speech at the Times Higher Education conference on the higher education sector in the UK. He focused on five future challenges facing the sector, higher education disruptors, degree apprenticeships, the Lifelong Learning Entitlement; AI; and higher education reforms. In relation to the last, he highlighted the challenges facing institutions having to anticipate student needs and adapt their courses accordingly.

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