Charities fortnightly round-up 26

While Christmas is looking a little different and we may be feeling less festive than we normally would, it is still a good time to reflect on what we have overcome this year, national and local lockdowns, getting to grips with and adapting to the local tier systems, the good work and services of charities being halted, or having to run activities and services virtually which itself brings many challenges with new technology!

Charities have faced uncertain times especially with the loss of income streams due to the Covid crisis. However, what we have seen since the first national lockdown in March is the resilience of the charity sector. As a firm, we are proud to serve our charity clients and to see the tenacity of the sector and its willingness to adapt during the pandemic.

Spending review

1. Levelling up fund
In his 2020 Spending Review the Chancellor confirmed that there will be a £4bn levelling up fund in England. The Chancellor stated that it is designed “to drive growth and regeneration in places in need, those facing particular challenges and areas that have received less government investment in recent years”. Currently, there are no confirmed details about how the fund will be administered and how quickly it will be distributed to charities and other voluntary organisations.

2. UK Shared Prosperity Fund
As part of the Chancellor’s Spending Review, the Treasury has confirmed that a UK Shared Prosperity Fund will “at least match receipts from EU structural funds on average reaching around £1.5bn a year”. It is estimated that voluntary groups receive around £500m from EU sources each year. Further details about the UK Shared Prosperity Fund should be available in Spring 2021 but it is unlikely the funding will be available before 2022.

3. Temporary reduction in foreign aid
The Spending Review also brought some unwelcome news. The Chancellor confirmed that the UK’s foreign aid budget would temporarily reduce to 0.5% of the national income. Dominic Raab the Foreign Secretary said that UK aid would focus on climate change and biodiversity, Covid and global health security, girls’ education, science, research, technology, open societies and conflict resolution, humanitarian preparedness and response and trade and economic development.

Understanding the tier system from 2 December 2020
The Government have issued guidance for the safe use of places of worship. Communal worship can go ahead provided that in tier 1 areas, members must not be in a group of more than 5 other people from outside their household or support bubble. In areas with tier 2 or 3 restrictions, people must not mingle indoors with anyone who does not form part of their household or support bubble. Regardless of which tier you are in, you must continue to keep at least 1m distance from any person you do not live with or with whom you have formed a support bubble.

In respect of small groups and prayer meetings, it is important that you follow the restrictions relating to social distancing measures which will depend on your area’s local alert level.

The guidance for holding wedding ceremonies or funerals (not including wedding receptions) remain unchanged. This means that for wedding ceremonies there can be no more than 15 attendees and at a funeral, there can be up to 30 attendees. Please note that anyone working at the wedding or funeral are excluded from the limit.

The guidance also permits support groups to take place in a public setting for up to 15 people. Such groups could include assisting victims of crime or domestic abuse, new and expectant parents, those who suffer with or are recovering from an addiction of substance or behaviour or those experiencing bereavement or loss etc.

The Government have confirmed that organised parent and child groups can also take place with up to 15 people and that any children under the age of 5 are not counted within the limit.

Supervised activities for children such as Sunday school can continue without any limit on the number of children attending. However, such activities must follow the strict measures and adults who attend must observe social distancing.

Charity Commission chair speaks out
The Chair of the Charity Commission, Baroness Stowell has been criticised for writing in a national Sunday newspaper that charities should not engage in “party politics and culture wars” in relation to helping those who are in need.

Baroness Stowell’s statement contradicts the Charity Commission’s guidance CC9 which states that a charity can engage in a political activity if it is in fulfilment of its charitable purposes and is not the only way that it fulfils its objects. However, a charity must not have a political purpose. The Charity Commission’s CC9 guidance explains in more detail that a charity must always be independent and any involvement with any political party must be balanced.

Unauthorised trustee payments
The Charity Commission has published its findings in respect of its inquiry into The Moss Side and Hulme Community Development Trust. As part of its inquiry, the Commission found that the charity had not obtained consent for payments to its CEO. This was because the charity’s governing document did not permit the trustee to be paid for his role as chief executive. The Commission had explained that the CEO could have been liable to repay his directors’ fees back to the charity. It also highlighted that where a trustee steps down from the role of trustee to take a paid post with the charity the same principles regarding trustee remuneration continue to apply.

It is important that where a charity is looking to recruit a trustee as an employee or to provide goods/services to the charity that the trustees consider whether it is authorised to make any payment to the trustee (or, as the case may be, a connected person such as a spouse or partner) within its governing document. If the charity’s governing document is silent or expressly prohibits trustee remuneration then you must seek approval from the Charity Commission before any decision regarding employment or payments are agreed by the trustees.

Safeguarding of beneficiaries

1. Statutory inquiry by the Charity Commission – lessons to learn
Rigpa Fellowship was subject to a statutory inquiry by the Charity Commission. The Commission has recently provided its report about the charity’s failure to safeguard its beneficiaries. It was alleged by some students that the charity’s spiritual director had mentally, physically and sexually abused them. As part of an independent investigation, the allegations were upheld.

The Commission held that there had been serious mismanagement and misconduct in the administration of the charity by two former trustees on the basis that, despite being aware of the allegations of abuse against students, the trustees concerned failed to take proper and appropriate action and “sought to downplay” the allegations against the spiritual director. The former trustees failed to file a serious incident report with the Charity Commission which would have been expected of them. The safeguarding policies and procedures were woefully lacking and while the former trustees used policies of the international Rigpa body these were not adapted under the laws of England and Wales.

In exercise of the Commission’s regulatory powers, one of the former trustees was disqualified from being a charity trustee for 8 years and another was removed from his trustee post and permanently disqualified from acting as a trustee or senior manager of a charity.

Charities who work with vulnerable groups including children should take heed of the Charity Commission’s statutory inquiry report and ensure that at all times its policies and procedures are sufficient to create a safe environment for beneficiaries and to safeguard these vulnerable people against harm.

2. Disclosure and Barring Service
All charities working with vulnerable adults and children and who must carry out DBS checks on its employees, volunteers and trustees should familiarise themselves with the new filtering rules published by the DBS. The rules shall apply to DBS certificates issued on or after 28 November 2020. You can find the rules here.

3. Extension of holding general meetings electronically
In our newsletter on 12 October, we highlighted that the Corporate Insolvency and Governance Act 2020 (CIGA 2020) had extended the rules relating to general meetings to 31 December 2020. There has been a further extension to 31 March 2021 under the Corporate Insolvency and Governance Act 2020 (Coronavirus) (Suspension of Liability for Wrongful Trading and Extension of the Relevant Period) Regulations 2020 which came into force on 26 November 2020.

For further information

If you would like more details about anything in this newsletter please speak to your usual ACS contact or contact Katie Crosbie.

Katie Crosbie is an executive in the charities and social business team at Anthony Collins Solicitors. This year, Katie has enjoyed spending the extra time with her little boy and settling him back into nursery. She has also attempted to revisit her love of baking and made not one but two birthday cakes for her son’s birthday earlier this year!

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