BWB Highlights

Last week BWB's deputy managing partner and joint head of Charity, Philip Kirkpatrick, delivered the keynote address at the 2016 NCVO/BWB Trustee Conference, speaking about changes in the charity sector, the possible affects of these changes, and how trustees can respond to them.  The full address can be found here.

At a glance

The Charity Commission, together with the Fundraising Regulator, has issued an alert about working with third party fundraisers.

The Information Commissioner’s Office has issued several fines, including to a historical society which is an unincorporated association.

The Crown Commercial Service has published the Public Contracts Regulations 2015: Guidance on social and environmental aspects.

The Law Commission has published a call for evidence on pension funds and social investment.

Charity Commission


The Commission, together with the Fundraising Regulator, has issued an alert about working with third party fundraisers.  Most of it rehearses familiar ground but two key points to note:

  • The Charity Commission repeats earlier guidance that, although professional fundraisers and commercial participators are responsible for ensuring that the specific legal rules that apply to them and the arrangements they make with charities are followed, charity trustees must also ensure that their arrangements with these fundraisers are in line with these rules; failure to do this “will generally amount to misconduct and mismanagement of the charity’s affairs”.
  • Where a charity is entering fundraising arrangements with other third party fundraisers and the Charities Act 1992 rules don’t apply - for example, because the arrangement is between the third party fundraiser and a charity’s subsidiary trading company or they have been appointed in a genuine advisory or consultancy capacity - the Commission will expect the charity to operate with the same principles in mind.   This is a new departure which significantly widens the range of fundraising arrangements where solicitation statements are expected to be made by a third party involved with fundraising.   

New inquiries

New inquiries have been opened into several military charities:

  • Our Local Heroes Foundation (1142029), a charity which makes grants for the relief of hardship of people who have served in the armed forces and are now suffering from physical or mental disabilities, and which was the subject of a commission case report on fundraising practices earlier this year.  The inquiry is investigating whether the action plan issued in relation to the previous case has been complied with by the trustees, as well as looking into concerns about lease arrangements between the charity and third parties and whether the charity has been used for unauthorised personal benefit.
  • Support the Heroes – Civil Society Media reports the Commission has ordered the charity to stop fundraising and has frozen its assets after opening a statutory inquiry. This is apparently the first time the Charity Commission has used a new power in the 2016 Act to direct a charity to cease a specified action.   

The Charity Commission has announced an inquiry into Cardiff Sixth Form College (1123262), a charity providing independent sixth form education.  The commission has said that the charity does not appear to have identified and/or managed conflicts of interest and there have been significant high value transactions which may not have been properly authorised.  An Interim Manager has been appointed and the Commission says she will consider pursuing legal action if the charity has lost money as a result of breach(es) of trustee duties.

New Interim Manager appointment

The commission has announced that an Interim Manager has been appointed in relation to Manor Building Preservation Trust (1104318). 

Inquiry Reports – “double defaulters”

The Commission has published three further inquiry reports into “double defaulting” charities, these are: Man U Jew, (1117800) Ashington Joint Welfare Scheme (522026) and East Dulwich Community Nursery Association (288953). As a result of the inquiry, the three charities have now complied with their obligations to submit their annual accounting information.

Charity law reform 

See here for the Law Society’s submission to the recent Law Commission consultation.


BWB's deputy managing partner and joint head of Charity, Philip Kirkpatrick, recently delivered the keynote address at the 2016 NCVO/BWB Trustee Conference, speaking about changes in the charity sector, the possible affects of these changes, and how trustees can respond to them.  The full address can be found here.


Supreme Court judgment

  • On 8 November, the Supreme Court granted permission for the government's application to appeal the High Court's judgment in R (Gina Miller and Deir Tozetti Dos Santos) v The Secretary of State for Exiting the European Union [2016] EWHC 2768 (Admin) to proceed to a substantive hearing, and set dates for the hearing. The appeal will be heard by all eleven Justices of the Supreme Court and will be chaired by Lord Neuberger, the President of the Supreme Court.
  • The appeal has been listed for 5 to 8 December 2016 with judgment anticipated to follow "probably in the New Year".

Political developments

The Independent reports various Liberal Democrat and Labour MPs have stated they will vote against the triggering of article 50, with some MPs indicating they will vote against the bill. Notable MPs include Tim Farron who has declared that his party would oppose article 50 being triggered in the absence of a second referendum on the terms of the UK’s Brexit deal. Meanwhile, Theresa May is under increasing pressure from Pro Brexit campaigners to proceed with a House of Commons vote triggering Article 50 rather than wait until the Supreme Court ruling.


See the items under Charity Commission heading above about a Charity Commission alert and inquiries into fundraising activity of some military charities.

Small, local charities can sign up for training in December 2016 as part of the Government’s support for Local Charities Day.  

Also see under Scotland below.

Social finance

Law Commission call for evidence on pension funds and social investment

On 8 November 2016, the Law Commission published a call for evidence on pension funds and social investment. The Law Commission's current project focuses on defined contribution (DC) pension schemes, particularly those where funds are chosen by the individual. The call for evidence seeks input on a number of issues that might be acting as a barrier to social investment, including DC default funds, DC chosen funds, and the Financial Conduct Authority's suitability test. Access the call for evidence here.

Prudential Regulatory Authority (PRA) 2016 annual assessment of category 5 credit unions

On 7 November 2016, the PRA updated its webpage on credit unions to publish letters sent to directors of category 5 credit unions, setting out the findings of its 2016 assessment of these firms. Access the letters here.

European Parliament briefing on third country equivalence in EU banking legislation

On 8 November 2016, the European Parliament published a briefing on third country equivalence in EU banking legislation (dated 7 November 2016). This briefing focuses on the difference between passporting rights and third-country equivalence rights, and also includes a summary of existing equivalence clauses in some key EU banking and financial services legislation.

Financial Conduct Authority (FCA) – extracts from annual Financial Crime Conference

The FCA has published extracts from key speeches from its annual Financial Crime Conference, discussing challenges and approaches in fighting financial crime, including the effectiveness of anti-money laundering regimes and the impact of technology:

FCA announces successful regulatory sandbox participants and second cohort application window

On 7 November 2016, the FCA published a press release in which it identified those firms that have succeeded in their applications to begin testing in the first cohort of its regulatory sandbox. The sandbox is part of Project Innovate and aims to create a "safe space" in which businesses can test innovative products, services, business models and delivery mechanisms in a live environment while ensuring that consumers are appropriately protected. Read the release here.

FCA letter to Treasury Committee on post-Brexit financial services regulatory landscape and role of passporting

On 8 November 2016, the House of Commons Treasury Committee published a letter (dated 28 October 2016) from Andrew Bailey, FCA Chief Executive, to Andrew Tyrie, Treasury Committee Chair, in which Mr Bailey provides further details on the questions raised at a committee hearing with the FCA on 20 July 2016. The letter includes an assessment of the post-Brexit landscape including the implications of ‘third country’ status for the UK, and passporting. Access the letter here.

Social enterprise

research report published by Social Finance and the independent trust Power to Change, shows that the number of community businesses in England has grown by 5% in the last year, outstripping growth by both charities (1%) and small businesses (2.3%).  

Children's services

A new legal protection for whistleblowers applying for jobs in the children’s social care sector has been announced.  The government has worked with Lord Wills to agree an amendment to the Children and Social Work Bill which will mean people applying for roles relating to children’s social care functions in local authorities will have legal protection to ensure they are not treated unfairly because they have previously made protected disclosures about their organisation.


Early years

See here for HM Treasury’s “Top things childcare providers need to know about Tax-Free Childcare”.  


An Islamic faith school has been successful in the judicial review of a proposed Ofsted report into the school which found that the school practiced unlawful sexual discrimination in maintaining a segregation policy for boys and girls between the ages of nine and 16. The court held that the Ofsted report was flawed in this regard since it was artificial to hold that each sex had been discriminated against in the sense required under the Equality Act 2010, of being treated less favourably than the other. There was no evidence to support such a conclusion.   The finding that the school library contained books which tacitly condoned domestic violence did justify the placing of the school into special measures.  On the basis of the court's decision, the current version of the Ofsted report could not be promulgated and would need to be redrafted to remove the offending findings of unlawful discrimination.  

Higher education

Thousands of new degree apprenticeships are to be created through a new multi-million pound development fund.


See first item under Procurement below.

Faith based organisations

See under Education - Schools above and Northern Ireland below. 

Independent Inquiry into Child Sex Abuse

See here for a BWB summary of the first update published by the Inquiry's fourth Chair.


BWB has responded to HM Treasury’s consultation on the transposition of the fourth money laundering directive into UK law.  The consultation proposed changes to the existing rules on people with significant control, which currently affect companies. The proposal is that the regime should be expanded to encompass other legal forms, including charitable incorporated organisations and Royal Charter bodies.  BWB has pointed out that the Directive is primarily aimed at commercial entities, and the proposals could pose a significant administrative burden for not-for profit organisations.

Data protection

A historical society was fined £500 by the Information Commissioner’s Office (ICO) last week after a laptop containing sensitive personal data was stolen whilst a member of staff was working away from the office. The laptop, which wasn’t encrypted, contained the details of people who had donated artefacts to the society. An ICO investigation found the organisation had no policies or procedures around homeworking, encryption and mobile devices which resulted in a breach of data protection law.

A will-writing company which made unsolicited marketing calls to people registered with the TPS (Telephone Preference Service) for over a year has been fined £30,000.  The ICO investigation was prompted by nearly 100 complaints, a number of which occurred even after the ICO had contacted the company to give advice and guidance on compliance with PECR.  

The Information Commissioner's Office has prosecuted a former employee of Ipswich Hospital NHS Trust who accessed the personal medical records of people she knew, including estranged family members. She was fined £650 and ordered to pay £638.60 in prosecution costs and a victim surcharge of £30.

Freedom of information

The Grand Chamber of the European Court of Human Rights has found that Article 10 of the European Convention on Human Rights includes a right to information held by a public authority in certain circumstances – Magyar Helsinki Bizottsag v Hungary.  See here for more details and comment from BWB Partner Rupert Earle.

Public procurement

On 2 November 2016, the Crown Commercial Service (CCS) published the Public Contracts Regulations 2015: Guidance on social and environmental aspects.  This is guidance for contracting authorities about including social, labour law and environmental criteria in a procurement process and in contract performance obligations.  BWB is campaigning for a step-change in the way social policy is incorporated into public sector commissioning, most especially in relation to public services. The new Government guidance gives a limited version of this and does not draw on the wider perspective of the European Commission’s Social Business Initiative, which underpinned the clarifications, points of emphasis and limited changes in the new 2015 Regulations. The selection criteria in the Regulations is "Most Economically Advantageous Tender", which means selecting the tender providing the optimum balance of price, quality and social value. Public sector commissioning in public services may be significantly enhanced by an increased engagement with advanced concepts of Social Value, Social Impact Measurement and Social Innovation, combining the perspectives of commissioners, social enterprise suppliers and social investors. Please see the BWB co-publication with HCT Group and E3M entitled "The Art of the Possible in public procurement" , which was produced in large part because official guidance tends to recite regulations, rather than describe the potential for their positive and creative use for social and environmental benefit. Please see also a recent article by BWB partner Julian Blake on Social Value (at pages 7 to 10 of this link).

Judicial review

See under Education - Schools above.


The Office of the Scottish Charity Regulator (OSCR) has issued a statement explaining why The Fundraising Preference Service is not being used in Scottish fundraising regulation.

OSCR’s Communications Manager, Ian Grieve, has published a blogpost entitled “Is social media in your charity’s DNA?

Northern Ireland

NICVA has launched a short online survey for all faith based organisations in Northern Ireland.  

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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. 

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Christine Rigby

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Posted on 15/11/2016 in Legal Updates

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