Welcome to our November newsletter.

This month we will be considering the impact of the Autumn Budget and Spending Review on the charity sector, trustee good practice concerning benefits and net carbon zero plans.

Readers whose organisations collect individuals’ personal data may find this ebriefing, written by Niamh Millross, an informative read.

Impact of the Autumn Budget and Spending Review on the charity sector
Rishi Sunak announced his Autumn Budget on 27 October. Whilst the statement was light on points directly aimed at charities, several of the policy aims will have an indirect effect on the sector.

The increase in the national living wage to £9.50 for those aged 23 and over, will be welcomed by those on the lowest incomes; however, it will be wiped out in many cases by the 1.25% national insurance increase. Also, for charities in the social care sector, it is yet another cost increase whilst they will see none of the benefits of the health and social care levy until 2025. In the meantime, for a sector that has worked tirelessly to care for the most vulnerable during the pandemic, and is now struggling with staffing shortages and increased costs, there was no offer of any alternative funding boosts for the intervening years.

For charities working internationally, there is no comfort that accounting sleights of hand which recategorise debts, International Monetary Fund​ (IMF) handouts and the costs of Covid-19 vaccines as official oversees aid, will significantly reduce the UK’s aid budget. This continued drop in funding is likely to cause serious suffering to those living in poverty internationally, damage the UK’s reputation in the aid sector and stifle funding opportunities for charities looking to tackle inequality internationally.

Children’s charities will welcome the budget’s £500m support package aimed at young families. £200 million will go towards the Supporting Families programme, over £80 million will be directed towards family hubs, £100 million will fund mental health support for new and expectant parents and a £120 million investment towards other family support programmes. However, the serious impact of the pandemic on children and the pressures it has placed on families are significant. This support package is a start to supporting families out of the crises many have found themselves in since the beginning of the pandemic, but further investment will be needed.

The £800m announced as a 'post-pandemic funding boost to breathe life back into our world-renowned cultural and heritage hotspots' and the £700 million promised for youth clubs and sports facilities may sound like a welcome investment into our arts, sports and heritage sector, however, charities should be mindful that not all of this is new money. A portion of this has already been pledged. The figures may seem high but the direct investment in the sector may be less than it first appears.

The Government has proposed keeping existing business rates reliefs. This includes discretionary and mandatory reliefs for charities.

If you have any queries on these issues, please contact your usual contact at Anthony Collins Solicitors (ACS).

Trustee benefits: Outcome of Manor Building Preservation Trust Limited inquiry  
The Charity Commission’s inquiry into the Manor Building Preservation Trust Limited (the Trust) has found that there was 'serious misconduct and/or mismanagement in the charity’s administration and management'. The charity trustees had purchased Goldington Hall in 2010 to renovate and to generate an income for the charity. They had occupied the property rent-free from this period, claiming household costs such as utility bills, phone and internet expenditure from the charity. This was not acting in the best interests of the charity, the inquiry found, and the trustees were instead treating the premises as their family home.

Further, the trustees used charity funds to purchase and maintain luxury cars. These provided no, or very little, benefit to the charity and their legal ownership was registered to the individual trustees. The Trust did not have an expenses policy; a formal or informal procedure to claim expenses. They were unable to evidence that they had considered any of the claimed expenses or that they had been incurred reasonably or properly. The situation was further exacerbated by the fact that the trustees were all related to each other and could not, therefore, make quorate non-conflicted decisions when deciding expense claims.

The outcome of the inquiry highlights that trustees should remember their legal duty to ensure that the funds of their charity are applied solely and reasonably to further the objects of the charity. To demonstrate this, trustees should maintain good record keeping and an adequate audit trail.

Trustees also need to be clear that they cannot receive any benefit from their position as trustees unless they have legal authority either from the governing document of the charity, the Commission or the courts. Charity Commission guidance on trustee expenses and payments can be found here.

When making decisions trustees have a legal duty to act in the best interests of the charity. Should trustees find themselves in a position where their personal interests conflict with the interests of the charity then trustees must follow the Commission’s checklist set out in Conflicts of interest: a guide for charity trustees (CC29).

If you have any queries on these issues, please contact your usual contact at ACS or Edwina Turner. The outcome of the inquiry can be found here.  

Net-zero consultation with the Church of England  
As part of their plan to achieve ‘net-zero’ carbon by 2030, the Church of England has released a routemap for the coming decade. They are inviting responses to their plan and welcome input from everybody. Whilst the consultation is primarily aimed at diocesan structures, national church bodies and cathedrals, due to their organisational reach, views from other organisations and individuals are welcomed. To view the routemap and to respond to the consultation survey please click here.

As landowners and community organisers, religious organisations can make a significant contribution to tackling climate change and biodiversity loss through the effective management of their premises.

If you have any queries on environmental issues, please contact your usual contact at ACS, Natalie Barbosa or Gayle Monk. Our short film on the Green Economy sets out how we can assist you with environmental planning for the future.

Help for unresolved banking disputes
The Business Banking Resolution Service (BBRS) has estimated that up to 6,000 charities in the UK may be eligible for financial rewards due to unresolved banking disputes. Eligibility criteria for assistance from BBRS can be found here. The maximum financial award for historical cases is £350,000 and for contemporary cases it rises to £600,000. However, BBRS may be able to recommend in excess of this in suitable cases. You will be assigned your own 'customer champion' by BBRS who will support you through the process. Charities should note that the historical complaint’s deadline for applications is 14 February 2023.

Updated financial sanctions guidance
Following the Taliban’s takeover in Afghanistan, updated guidance has been released by the treasury regarding financial sanctions - the new guidance can be found here. Charities are reminded that breaching financial sanctions is a criminal offence. This burden applies both to the organisation and to individual staff members. If your charity becomes aware of a breach, then you must report it to the Office of Financial Sanctions Implementation immediately. The guidance gives updated information about interactions with designated persons and hawala banking.

If you have any queries on these issues, please contact your usual contact at ACS, Phil Watts or Edwina Turner.

Funding opportunities
Esmée Fairbairn Foundation
£10m has been allocated by the Esmée Fairbairn Foundation for impact investing. They will be piloting it as part of a longer-term investment strategy and hope to 'test the potential for achieving financial returns by investing into impact funds that align to our impact goals and which generate a measurement impact'. They will invest exclusively in funds rather than making direct investments. The funds do not need to be UK focused but they 'will be required to target, and report on, social or environmental performance as well as financial'. More information on this experimental approach can be found here.

Reach Fund
Access - The Foundation for Social Investment and Social Investment Business has confirmed that the Reach Fund program will be extended until 2025/26. The fund 'is a grant programme that helps charities and social enterprises raise investment' and is open to organisations in England. The average grant size is £13,600. Details on how to apply can be found on the Reach Fund website.

Fundraising Live 2022
Bookings are open for the Civil Society’s Fundraising Live 2022 event and the Charity Technology Conference. Both events are planned to be in person on 2 March 2022 at the ILEC Conference Centre. The theme for this year’s events is, aptly, 'strategies and tools for success in the new world'. They will consist of interactive workshops looking at digital fundraising, diversity, crowdfunding, boardroom’s digital agendas, cyber security, and data visualisation tools.

To view the programme and book tickets please visit their website.

For more information

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