The Cabinet Office has announced that a new "gagging" clause is to be inserted into all new and renewed grant agreements. See today's Briefing for details.
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At a glance
The Charities (Protection and Social Investment) Bill has now completed its passage through Parliament and is awaiting Royal Assent.
The Information Commissioner's Office has launched a consultation on updated guidance on drafting privacy notices.
The Law Commission has published its joint interim report on Electoral Law.
A Private Members Bill, the Local Area Referendum (Disposal of School Playing Fields) Bill 2015-16 has been published.
The Court of Appeal has handed judgment down in a case which helps further refine the boundaries between health and social care.
Today the Prime Minister announced reform to the prison system including six new 'reform prisons' to be created this year and changes to the prison education system.
The National Audit Office is consulting civil society organisations on the Better Regulation Executive’s approach to reducing regulatory burdens.
Charities being paid to promote corporates
The Commission has published a statement to the effect that it is in contact with Age UK, and is liaising with OFGEM, regarding the charity’s partnership activities with E.ON. This follows media reports that the charity was receiving funds from E.ON in return for promoting energy tariffs to older people that were not necessarily competitive. The FRSB has also said it will be carrying out an investigation into any Code breaches by Age UK.
William Shawcross has made a statement following the passage of the Charities (Protection and Social Investment) Bill through its last substantive stage through Parliament:
The latest in the series of inquiry reports into “double defaulter” charities has been published, this time intoBucks County Agricultural Association (registered charity number 1000652) As a result of the Inquiry, the charity submitted its annual accounting information.
Charities (Protection and Social Investment) Bill
The Charities (Protection and Social Investment) Bill has now completed its passage through Parliament and is awaiting Royal Assent.
What does the Bill mean for charities?
The Bill changes the law in four areas. In summary:
- Charity Commission powers: The Charity Commission will have more regulatory powers over charities, including a new power to give official warnings to charities. These are potentially relevant to all charities, but in practice will only apply where the Commission has regulatory concerns about a charity.
- Disqualification of charity trustees: More people will be automatically disqualified from acting as charity trustees, but this change will not be brought into force for at least 12 months. The Charity Commission will have a new power to disqualify people from serving as trustees. Disqualified trustees may not be actively involved in the management of a corporate charity trustee. While the new provisions apply to all charities, in practice a relatively small number are likely to be affected.
- Fundraising: The Bill imposes more controls over the relationship between charities and commercial organisations that raise funds on their behalf, in a bid to deter aggressive fundraising. All charities that have relationships with professional fundraisers or commercial participators will need to make sure that their fundraising agreements are compliant. Larger charities must include a new statement about their fundraising practices in their annual reports. The Bill also includes new powers for the Government to require charities to register with (and adhere to guidance from) a fundraising regulator. These powers are only likely to be brought into force if self-regulation by the sector fails.
- Social investment: Charities’ powers to make social investments are now confirmed in statute. Social investment means investing the charity’s money in a way which does not just seek to make a financial return for the charity, but also aims in some way to further the charity’s objects. These new provisions will be particularly helpful for charities wishing to make social investments, or to benefit from social investment by other charities.
When will the Bill come into force?
Government has committed to waiting at least a year before some of the provisions about the disqualification of trustees are brought into force. The rest of the legislation may well be implemented shortly, although the Charity Commission is due to issue guidance on some provisions before they take effect.
First Tier (Charity) Tribunal
The Tribunal has refused to grant the Cambridgeshire Target Shooting Association leave to appeal to the Upper Tribunal against the Tribunal’s decision that CTSA is not registrable as a charity.
Sector regulation generally
The National Audit Office is consulting businesses and civil society organisations on the Better Regulation Executive’s approach to reducing regulatory burdens. In particular, the NAO is interested in the following:
- What are the costs and benefits of regulations?
- How does regulation impact on organisations?
- Do departments and regulators consult enough when measuring and evaluating the actual impact of regulation?
The closing date for submissions is COB Friday, 11 March 2016.
The results of a survey run by the Institute of Fundraising and the Small Charities Coalition show that almost half of respondents are ‘not very familiar’ or ‘not at all familiar’ with the review of fundraising self-regulation conducted last summer.
The Information Commissioner's Office has launched a consultation on updated guidance on drafting privacy notices. The consultation "Privacy notices, transparency and control – a code of practice on community privacy information to individuals" closes on 24 March 2016.
Tax and accounting
Guide to reading charity accounts
Sayer Vincent has published a “Made simple: Guide to reading charity accounts”. It is aimed at any supporter, employee, trustee or journalist who is unfamiliar with the legal and accounting bases which apply to charities.
See item under Charity Commission above.
New “gagging” clause in government grant agreements
On Saturday, the Cabinet Office announced that a new clause is to be inserted into all new and renewed grant agreements which will “make sure that taxpayer funds are spent on improving people’s lives and good causes, rather than lobbying for new regulation or using taxpayers’ money to lobby for more government funding”. It will not prevent organisations from using their own privately-raised funds to campaign as they see fit. The exact phrase that will be inserted into all new and renewed grant agreements reads: The following costs are not Eligible Expenditure: Payments that support activity intended to influence or attempt to influence Parliament, government or political parties, or attempting to influence the awarding or renewal of contracts and grants, or attempting to influence legislative or regulatory action.
The Cabinet Office is publishing guidance to implement the new rules, which will commence in May alongside the new financial year. For comment:
Grants for Good campaign
The Directory of Social Change, Charity Finance Group, Children England, Navca and the Lloyds Bank Foundation have come together to launch the Grants for Good campaign, to promote government grants going to charities and voluntary groups. The organisations are calling for a halt in the decline in grant funding by public bodies to charities and community groups.
The three Law Commissions (for England & Wales, Scotland and Northern Ireland) are recommending that the process for challenging elections should be modernised, making it easier for parties to understand and use, and that judges be given the power, in appropriate cases, to limit the potential costs for challengers. They also recommend that existing electoral offences should be updated and made easier for the electorate, officials and prosecutors to understand, and that the maximum sentence for serious electoral offences be increased to ten years. The Law Commission is awaiting the Government’s response, after which it will decide with Government whether to pursue a full law reform project.
Civil Society Media reports CAN (formerly known as Community Action Network) has announced plans to launch a social investment fund worth £50m, following the growth it has seen in its investment portfolio.
See this Big Society Capital blog “Does social investment offer a new opportunity for federated charities?”
A survey carried out by Social Enterprise UK (SEUK) has found that three-quarters (74%) of those running social enterprises would vote for Britain to stay in the European Union (EU) if a referendum were held. This compares to 1 in 7 (15%) who would vote for Britain to leave.
The Court of Appeal recently handed down a ruling about the extent to which a local authority is liable for abuse suffered by a child after the local authority placed her with two foster families. The Court rejected claims that the local authority was (a) vicariously liable for the abuse and (b) that the local authority was under a non-delegable duty to ensure she was protected from harm.
A Private Members Bill, the Local Area Referendum (Disposal of School Playing Fields) Bill 2015-16 has been published. It was originally introduced to Parliament in June last year and it began its second reading on 22 January 2016. The Bill:
- Prevents state-funded schools, academies or local education authorities from selling land except in accordance with the scheme set out by the Bill.
- Will require bodies proposing to sell school playing field land to undertake a public consultation on the proposed sale, and hold a local area referendum where a certain numbers of objections to the sale are received.
- States that where a local referendum finds against a proposal to sell school playing field land, then that land cannot be offered for sale for a further ten years (except in extraordinary circumstances).
The Equality and Human Rights Commission and Liverpool John Moores University, have launched a new online training resource to help schools unlock opportunity and enable disabled children to reach their full potential.
Health and social care
The Court of Appeal has handed judgment down in a case which helps further refine the boundaries between health and social care. In R (Forge Care Homes) v Cardiff & Vale University Health Board, the court of appeal held that the cost of a nurse providing social care in a care home should be met by the local authority, not the local NHS Trust. See this briefing from the barristers who acted for the health authorities in the case.
Prison services/rehabilitation of offenders
Yesterday the Prime Minister announced reform to the prison system including six new 'reform prisons' to be created this year and changes to the prison education system.
See item above about school playing fields under Education.
HMRC has made some changes to the CASC guidance. New section 2.3.9 was added to the guidance in January 2016 concerning the terms on which clubs can offer honorary or free life memberships.
Freedom of information
The House of Commons Library has published a briefing paper on changes to freedom of information law in the light of the review being conducted by the Independent Commission on Freedom of Information.
Extending consumer protection to small/medium sized businesses
You may remember BIS consulted on this last year. It has now published its conclusions which are that:
- In relation to unregulated sectors, more work was needed on whether additional protection is needed for micro businesses – there will be a further consultation later this year.
- In relation to regulated sectors, as part of its 2016 programme the UK Regulators Network will consider what protection microbusinesses need.
OSCR has announced changes to the ways it monitors and reviews Scottish charities and has also urged the 20% of Scottish charities not signed up for its online services to do so this year. The Scottish Charity Regulator is taking steps aimed at focusing its resources more effectively on those areas that require its attention, based on its 10 years’ experience. In the coming year it will also highlight to Ministers areas where additional powers would improve its effectiveness and further reinforce public confidence. From 1 April, OSCR also will increase the financial information it makes available on the Scottish Charity Register, by starting to publish annual reports and accounts for larger income charities and charities that are Scottish Charitable Incorporated Organisations (SCIOs).
The Scottish regulations applying to charity accounts have been amended for accounting years beginning from 1st January 2016 by the Charities Accounts (Scotland) Amendment Regulations 2016/76.
Stephen Lloyd Awards 2016
The Stephen Lloyd Awards 2016 are now open for entries!
The Stephen Lloyd Awards Committee announced yesterday (01 February) that they are now open for entries to the 2016 Stephen Lloyd Awards. The aim of the awards, in line with Stephen’s own approach, is to help create success by finding and nurturing innovative ideas and projects that can lead to practical, sustainable social change. The awards committee is particularly interested in supporting ideas that address social problems at a systemic level.
Entries for the awards will have an eight week application window, closing on 25th March 2016. Applications should be emailed to firstname.lastname@example.org.
For more information about Stephen Lloyd Awards or specific entries, please contact the Stephen Lloyd Awards Committee.
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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 content is necessarily of a general nature - specific advice should always be sought for specific situations.
Posted on 09/02/2016 in Legal UpdatesBack to Knowledge