Charities newsletter - February 2024

With an extra day landing in our laps this year, why not also leap into learning and join our employment team for a webinar on supporting neurodivergent employees in the workplace on 28 February. In this session, Katherine Sinclair, a legal director in our employment team will be joined by Karen Allen, head of people and development at Futures Housing Group. They will provide insight on what can be done to create an inclusive culture and how to bring out the best in neurodivergent employees. The session will also include an interview with Pooja Sudera, senior business psychologist at Lexxic, who will share some of what she has learnt in her eight years working in the field of neurodiversity.

Caution urged over online voting – friend or foe?

Online elections have become commonplace in the charity sector, not least due to the growing popularity of virtual meetings accelerated by the Covid-19 pandemic. However, recent news from the Actors’ Benevolent Fund has highlighted the importance of exercising caution and due diligence where elections are held online.

The charity, which has been involved in a long-running dispute garnering much media coverage since 2022, employed online voting as part of its council elections in January 2024. Following concerns raised by the independent scrutineer, it was found that 166 of the 339 votes received had come from only two IP addresses. If undiscovered, the invalid votes would have significantly impacted the election results.

This latest development adds to an already tumultuous period, during which the charity has been criticised for allowing an internal dispute to detract attention from the best interests of the charity’s purposes to the detriment of its beneficiaries. The matter perhaps highlights the importance of addressing and resolving internal disputes promptly. It also acts as a cautionary tale to those charities employing online voting as part of their voting processes.

If you or your charity have any concerns regarding online elections, please contact Sarah Tomlinson or your usual AC contact.

Consultation on Martyn’s Law – mitigating harm from potential terror attacks

The eagle-eyed among you will remember our update on Martyn’s Law in our January charities newsletter. This Bill proposes the implementation of a tiered system requiring venues to adopt ‘proportionate measures’ to mitigate harm from potential terror attacks.

A further consultation has now been launched by the Home Office, seeking responses from those ‘standard tier’ organisations (primarily made up of premises with a capacity of 100 – 799 individuals). The consultation document confirms that, unless they charge an admission fee, places of worship are expected to fall within the ‘standard tier’ regardless of their capacity.

The consultation will end on 18 March 2024, and those organisations likely to be affected by the legislation are encouraged to submit their responses here.

Yet another Charities Act 2022 update!

Readers might recall from our January charities newsletter that the Department for Culture, Media and Sport (DCMS) delayed the implementation of sections of the Charities Act 2022 relating to ex gratia payments. These sections were placed ‘under further consideration prior to commencement’ due to the implication that the provisions could affect the repatriation of national museum collections.

In a letter to the chairman of the Charity Commission dated 31 January 2024, the DCMS has confirmed that ‘the potential consequences of these provisions were not made clear by the Law Commission when the Bill was introduced’ and were therefore not subject to parliamentary scrutiny or debate. In this letter, the DCMS goes on to confirm that the ex gratia provisions of the Charities Act 2022 will specifically exclude national museums and galleries. Noting that the issue of restitution can arise in charities other than national museums and galleries, the DCMS has also confirmed that they are seeking to exclude the commencement of these sections from applying in situations where the recipient of an ex gratia payment is located outside the UK. This means that trustees will need to continue seeking consent from the Charity Commission before they make ex gratia payments in these circumstances. For those of you struggling to keep track of the implementation plan of the Charities Act 2022, please sign up to attend our webinar on 16 April 2024 where we will be breaking down what to expect as the next tranche of changes are rolled out.

If you require any further advice or assistance in relation to the Charities Act 2022 or ex gratia payments please contact Edwina Turner or your usual AC contact.

High Court’s refusal to appoint a receiver in respect of a charity

In a judgment handed down on 31 January 2024, the High Court has refused an application to exercise its power under section 37(1) of the Senior Courts Act 1981 to appoint a receiver. In Jaffer v Jaffer and others (re The World Federation of the Khoja Shia Ithna-Asheri Muslim Communities and the Charities Act 2011) [2024] EWHC 135 (Ch), the claimant argued that the appointment of a receiver would be in the best interest of the charity, but the court held that this in and of itself was not sufficient. In order to justify the intervention of a receiver, the court held that the claimant would be required to illustrate that something had ‘gone seriously wrong in the operation or management of the charity’. It was also noted that, given that the appointment of a receiver would ‘seriously damage the standing and confidence of the charity’ the court would need to be convinced that the benefits of such an appointment would outweigh the risks.

This power is separate from that afforded to the Charity Commission which can exercise its power under section 76 of the Charities Act 2011 to appoint an interim receiver and interim manager during regulatory inquiries. Whilst the case is not binding, it serves as a reminder of the perception that interventions of this nature carry a risk of being reputationally damaging.

If you or your charity need any further advice or assistance in relation to regulatory matters, please contact Edwina Turner, Phil Watts or your usual AC contact.

Charity Commission assessing conflicts of interest

A charity promoting voluntary action based in Colchester has come to the attention of the regulator following concerns regarding a £206,341 loan made to its chief executive. The Charity Commission has confirmed that it is assessing this concern, having had previous engagement with the charity regarding conflicts of interest.

Media reports on the matter have also noted an ongoing trading relationship between the charity and the chief executive’s spouse. Responding to these reports, the chair of trustees of the charity has denied any wrongdoing and emphasised that the trustees scrutinise all potential conflicts of interest.

Whilst there have been no findings of maladministration on the part of the charity, either in the regulator’s current or previous engagement with them, this matter serves as a reminder of the importance of monitoring conflicts of interest. It also highlights the potential for reputational harm at even the suggestion of unmanaged conflicts.

If you require any further assistance in relation to managing conflicts of interest or Charity Commission intervention, please contact Catherine Gibbons, Edwina Turner or your usual AC contact.

The Charity Commission announces its new chief executive

In a press release issued earlier this month, the Charity Commission has announced who will replace Helen Stephenson as the regulator’s longest-standing chief executive. David Holdsworth will take over this role from 1 July 2024 and is no stranger to the Charity Commission, having previously served as the deputy CEO and registrar. It is expected that David will take his experience leading the transformation of the Charity Commission’s data handling and digital capability into his new role.

Employment update

Our employment team have published several interesting blog posts recently which might be of interest to readers:

• In her blog post published this month, Hazel Findlay discusses the updated guidance published by UK Visas and Immigration for employers conducting right-to-work checks. Noting that the updated guidance has applied since 13 February 2024, Hazel explains what has changed and how employers can comply with the guidance.
• A further blog post by Jackie Morris discusses the announcement from the Home Office confirming that no changes will be made to English language requirements for care workers visas. In this article, Jackie explores how providers of social care can assess and manage the risks associated with employees who are identified as having very poor English.
• Of particular interest to those working in or adjacent to the social housing sector, Katherine Sinclair has published an article and ebriefing regarding the recent consultation document on mandatory qualifications for housing managers. In these publications, Katherine explores what we have learnt from the consultation document and encourages registered providers of social housing to respond to the consultation, which can be found here. The consultation will remain open until 2nd April 2024. 

For any advice on employment matters related to your organisation, please contact our employment team.

Consultation on social housing reform

The Department for Levelling Up, Housing and Communities has launched a consultation on reforms to social housing allocations. The proposals contained within the consultation, which have been coined by some as ‘British homes for British workers’, have already been met with some controversy. As considered by our own Helen Tucker in her recent article for LocalGov, some have questioned whether the proposals will lead to increased street homelessness and an uptick in litigation for providers of social housing.

The consultation will close on 26 March 2024. Whilst the consultation is open to the public, views are specifically being sought from organisations likely to be impacted by the proposals, such as housing associations. Social housing tenants and charities supporting the homeless, or those at risk of homelessness, might also be encouraged to provide their views and can do so here.

For more information

For more information, contact Edwina Turner, your editor this month. Edwina is a legal director in our charities team and leads our charity governance work. Edwina particularly specialises in mergers, hive offs and restructures, advising on regulatory issues involving the Charity Commission and working in the faith and health and social care sector. She currently holds three interim manager appointments for the Charity Commission. Away from work Edwina is involved in her local church, particularly working with teenagers and is a volunteer at Birmingham Repertory Theatre leading backstage tours.

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