BWB Highlights

This week is Trustees' Week. Fittingly, a consultation began this week on a new Charity Governance Code.  This will replace the existing Good Governance Code for the Voluntary Sector.  See today’s Briefing for details.

Why not share today's Briefing with your trustees? Any trustee is welcome to sign up to receive our Briefings here.

At a glance

The Charity Commission has issued a “regulatory alert” about the new fundraising rules which came into force on 1 November. It has also published new reporting and accounting guidance for charities with financial years beginning on or after 1 November 2016 to reflect the new provisions concerning the reporting of fundraising in the annual report of charities above the audit threshold.

The Association of Charitable Foundations has published an update on how the Automatic Exchange of Information regime, also known as the Common Reporting Standard, affects trusts and foundations.

The Department for International Development has set out a new system of central funding for civil society organisations.

New Philanthropy Capital has published a report outlining how grant-makers can use of data at both an individual and a collective level to improve their funding practice.

The Department of Education has published a response to the consultation earlier this year on developing an insolvency regime for the FE and sixth-form sector.

The Care Quality Commission has published information for people about their visiting rights in care homes.

Charity Commission

Case report – Help for Heroes

The Commission has published a case report into Help For Heroes. The case was opened following allegations being made to the Commission in 2014 which were also featured in the media in 2015. The allegations included: a lack of safeguarding policies and a complaints policy for veterans, no risk assessments on beneficiaries, a lack of confidential data protection protocols regarding sensitive information about beneficiaries, and that large pay-offs to former employees had been made.  The Commission found that the trustees had already started a programme to improve governance, which included employing outside experts to obtain the appropriate policies and procedures, and the Commission was satisfied that the charity is taking steps to continually review and improve policies and ensure they are properly implemented.

Inquiry reports

  • The Commission has published its inquiry report into Islamic Education and Research Academy(IERA, 1134566). The Commission’s attention was drawn to the charity by adverse media articles about events run by the charity. The inquiry’s scope was to examine the decision making of the trustee body regarding due diligence and monitoring of guest speakers, and the financial management of the charity, specifically (i) payments to trustees and/or former trustees, and (ii) the charity’s relationship with the company Islamic Education and Research Academy Ltd. The Commission concluded that there had been misconduct and mismanagement in the administration of the charity and the Commission issued an order under section 84 Charities Act 2011, directing the trustees to take a range of steps to safeguard the charity.

New Charities Act 2016 fundraising rules

The Commission issued a “regulatory alert”  announcing that new fundraising rules came into force on 1 November.

Charity reporting and accounting

The Commission has published new reporting and accounting guidance for charities with financial years beginning on or after 1 November 2016. The guidance reflects the 2016 Charities Act provisions concerning the reporting of fundraising in the annual report of charities above the audit threshold, which have now come into effect.

Future Charity Commission funding

Civil Society Media has reported that William Shawcross told the All Party Parliamentary Group on Charities and Volunteering that the regulator will consult early next year on plans to raise £5million from the sector to pay for regulation over the next two years; charities with an income of less than £20,000 would be exempt from contributing.

subsequent article reported criticism of the proposal from the Charity Finance Group and ACEVO.

Trustees’ week

The Commission has issued a press release welcoming trustees’ week and re-emphasising the fundamental role and value of trusteeship.

Fraud awareness

The Commission has produced a round-up of activities from the first Fraud Awareness Week.

New transparency requirements - Common Reporting Standard

The Association of Charitable Foundations has published this update on how the Automatic Exchange of Information regime, also known as the Common Reporting Standard, affects trusts and foundations.  


consultation opened yesterday on a new version of the charity sector Code for Good Governance. The consultation is being chaired by Rosie Chapman, and runs until Friday 3 February 2017.  Proposed new features include the following recommendations:

  • Boards will use the code as a tool for continuous improvement, rather than simply as an aide to meet minimum standards
  • Boards promote a culture of prudence with resources but also understand that being overcautious and risk averse is itself a risk
  • Boards take account of the wider voluntary sector in making sure that their charity operates responsibility and ethically
  • Boards regularly review the external environment and assess whether the charity is still relevant. The code recommends trustees consider partnership working, merger or dissolution if others are seen to be fulfilling similar purposes more effectively.

The code also proposes higher standards in a number of areas, including the following:

  • Increased expectation in relation to aspects of board composition, dynamics and behaviours with explicit good practice recommendations about board size, frequency of board performance reviews, and trustees' terms of office.
  • A new emphasis on the chair’s role in promoting good governance
  • Emphasis on board diversity, supporting its leadership and decision-making with a recommendation that larger charities publish an annual statement of the steps they have taken to address the board’s diversity.
  • A presumption that charities should be open in their work, including a public register of trustees’ interests, unless there is good reason not to.
  • Recommending that charities use their annual report to say how they apply the code and an explanation of any aspects which they do differently.

Also see under Sport below.


High Court case

The High Court case on parliamentary approval to leave the EU handed down last Thursday dominated Brexit news last week.  In a rolled up hearing, the court upheld the claim and granted the claimants the declaratory relief they sought. The court considered, in particular, that:

  • The absence of an express statutory provision in the European Communities Act 1972 prohibiting the government's prerogative power to withdraw the UK from the EU did not indicate that Parliament intended that the government could invoke Article 50 through its prerogative powers and without an Act of Parliament.
  • That the Royal prerogative cannot be invoked to vary domestic law is a "powerful constitutional principle".
  • Notification under Article 50 was not a matter only concerning international affairs as it would lead to significant effects on domestic law.

BWB has prepared this comment explaining the significance of last week's High Court decision.

Political reaction to the High Court judgment

Meanwhile, MPs and Government react to the High Court judgement:

  • Stephen Phillips criticised government's attempt to negotiate exit without parliamentary scrutiny and quit as MP citing “irreconcilable policy differences with the current Government” over Brexit
  • On the other side of the debate the ruling infuriated many eurosceptics, with several Tory MPs suggesting May should call an early general election to get another mandate from voters. Dominic Raab, the former minister and Tory MP, said any attempt to stall the triggering of Brexit could increase the chances of an early general election.  

Equality and Human Rights

In other news, on 26 October 2016, the Scottish Parliament Information Centre published a briefing paper “Brexit: the impact on equalities and human rights”. The paper focuses on legislation that has a basis in EU law, the protections that are currently offered and what Brexit could mean on these in the future. It refers to legal opinion and includes views from the third sector, the Equality and Human Rights Commission and the Scottish Human Rights Commission.


Fundraising Preference Service (FPS)

The Fundraising Regulator has said it is “currently reviewing feedback to our final proposals for the Fundraising Preference Service. We will take these to the Board on 16th November, and will inform the sector of our final decisions before Christmas.” 

Fundraising Regulator (FR)

The FR has signed MOUs with:

The FR’s November newsletter has been published.  It includes:

  • a pointer to recent guidance for charities about responsible advertising, issued by the Committee of Advertising Practice
  • a “Query of the Month” about a donation from a potentially vulnerable donor

New pound coin

In March 2017, a new 12 sided pound coin will be introduced and the current round coin will be withdrawn. This website has steps for organisations to take to prepare for accepting the new coin.


A new government £20 million fund is now open to help victims of domestic abuse. 


New Philanthropy Capital has published a report outlining how grant-makers can use of data at both an individual and a collective level to improve their funding practice.

Social finance

In the mainstream finance world, the government has introduced a new matchmaking service for small businesses looking for finance.  9 of the UK’s biggest banks  will pass on the details of small businesses they have rejected for finance to three finance platforms - Funding Xchange, Business Finance Compared and Funding Options.  See here for more details.

HM Treasury designates banks and finance platforms under Small and Medium Sized Business (Finance Platforms) Regulations 2015

On 1 November 2016, HM Treasury published a notice of designation listing the banks and finance platforms designated under the Small and Medium Sized Business (Finance Platforms) Regulations 2015 (SI 2015/1946).

Fourth money laundering directive: BEIS discussion paper on the transposition of Article 30

On 3 November 2016, the Department for Business, Energy & Industrial Strategy (BEIS) published a discussion paper on the transposition of Article 30 of the Fourth Money Laundering Directive relating to the beneficial ownership of corporate and other legal entities.

European Commission establishes expert group on sustainable finance

On 28 October 2016, the European Commission published a decision creating a high-level expert group (HLEG) on sustainable finance in the context of the capital markets union (CMU).  The group's tasks include:

  • Submitting to the Commission a set of policy recommendations that set out the scale and dimensions of the challenges and opportunities that sustainable finance presents, and recommending a comprehensive programme of reforms to the EU financial policy framework. Specifically, the group will explore operational steps that financial institutions and supervisors should take to protect the stability of the financial system from environment, social and governance risks. An accompanying press release indicates that this policy roadmap is due to be completed by the end of 2017.
  • Engaging in structured communication and advocacy towards interested parties about its work on sustainable finance.

You can see the full decision here.

Financial Conduct Authority (FCA) feedback statement on regulatory barriers to social investments

The FCA has published a feedback statement following its December 2015 call for input on regulatory barriers to social investments (FS16/11). The FCA concludes that regulation is not preventing the social investment market from developing. On the contrary, it can ensure the development of strong practices that in turn lead to investor confidence and support market development.  You can read the full statement here.

Social enterprise

You may remember in July the Office for Tax Simplification (OTS) carried out an initial consultation about introducing a new business vehicle for sole traders, a Sole Enterprise with Protected Assets (SEPA) model. The OTS has concluded that although the case for introducing SEPA is not cast iron, the OTS believes, on balance, the idea is worth pursuing and recommends that the introduction of SEPA be developed into a formal proposal.

At the same time, the Office of Tax Simplification has published its final report on proposals for introducing look-through taxation for certain small companies, and has concluded that it would not recommend look-through taxation as a method of simplifying tax for small companies. See here for more detail.

See here for a list of community interest companies registered in October.



See here for a speech by Nick Gibb MP to the Freedom and Autonomy for Schools - National Association (FASNA) autumn conference.  

Further Education

The Department of Education has published a response to the consultation earlier this year on developing an insolvency regime for the FE and sixth-form sector.    

Higher Education

See under Fundraising above.

Health and social care

The Care Quality Commission has published information for people about their visiting rights in care homes.

Faith based organisations

See under Northern Ireland below. 

International development

The Department for International Development (DFID) has set out a new system of central funding for civil society organisations - DFID’s Civil Society Partnership Review (CSPR). DFID’s main funding for civil society organisations will be:

  • UK Aid Match - a scheme that match-funds public donations to charity appeals for projects to reduce poverty in developing countries, giving the British public a say in what international development issues are important to them. Doubling UK Aid Match is a manifesto commitment.
  • UK Aid Direct - providing grants to small and medium-sized civil society organisations, primarily for work to directly tackle poverty in poor communities around the world.
  • UK Aid Connect - a new partnership approach that will allow civil society organisations to work collaboratively, bringing together knowledge, practice and expertise for solutions to some of the most difficult development problems.
  • UK Aid Volunteers – which will include the manifesto commitment to triple in size the International Citizen Service (ICS) youth volunteering scheme and provide opportunities for new partnerships with volunteering agencies. 

For comment from Bond see here.


On 31st October, A Code for Sports Governance was launched by UK Sport and Sport England.  See herefor comment from the Sport and Recreation Alliance.

Data protection

The Secretary of State Karen Bradley MP confirmed to the Culture, Media and Sports Select Committee on 24 October 2016 that the UK will be implementing the General Data Protection Regulation (GDPR) in May 2018. However, it remains unclear what amendments may be made to data protection laws once the UK has left the EU.   The Information Commissioner’s Office (ICO) has published this blog about how the ICO will support implementation of the GDPR.  

A company that sent out 2.2 million illegal marketing text messages has been fined £70,000 and ordered to stop by the ICO.

Modern slavery

The government has announced £11 million of funding to the Modern Slavery Innovation Fund. The Fund has been set up by the government to tackle modern slavery in high-risk countries, from which victims are trafficked to the UK. 


Change to incorporation procedures

OSCR has issued new guidance on incorporation because since 2 November only one route to incorporation is now available in Scotland. Previously a second route, referred to as “conversion” was available, but now the only available route is a transfer of assets from the existing charity to a newly registered charity. The updated guidance is contained in OSCR’s interim guidance on Changing your Charity’s Legal Form  and the Incorporation section of OSCR’s FAQs.

Northern Ireland

CCNI’s latest blogpost is by Kate Fleck, Chair of Open College Network NI, on what makes a great charity board Chair:

A new appeal has been brought in the Northern Ireland Charity Tribunal by Arthur Lindsay Kerr Acheson.  The Appellant is a member and “ruling elder” of the Kirk Session of the May Street Congregation of the Presbyterian Church in Ireland.  He is appealing against a decision made by CCNI to register the Congregation as a charity.  These directions have been issued by the Tribunal.

New from Get Legal

BWB Get Legal brings you a range of top-quality, affordable legal documents, available to download and customise to your specifications. Every document has been drafted by our expert solicitors.

To celebrate Trustees Week, we are delighted to offer two of our most popular documents for just £5 – our template board role specification and data protection policy.


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.

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Christine Rigby

Senior Consultant

+44(0)20 7551 7712

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Posted on 09/11/2016 in Legal Updates

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