
Happy New Year - our first newsletter of 2021! Throughout this year we will continue to bring you news and developments relating to the charities sector.
Brexit Update
The chaos surrounding Brexit continues following the Supreme Court’s ruling that the Prime Minister’s advice to Her Majesty regarding the prorogation of parliament was unlawful.
Amidst the uncertainty surrounding whether the United Kingdom will be leaving the European Union, the NHF has released a further briefing for registered providers of social housing (RPs) to help them prepare for a no-deal Brexit. The briefing identifies challenges for RPs following the Government’s release of Operation Yellowhammer documents, and these include a potential impact on:
Please refer to the Government’s updated guidance for more detailed information on how Brexit will impact immigration and construction.
Despite concerns surrounding how Brexit will affect the housing sector, the Quarterly Survey published by the Regulator of Social Housing (RSH) for the first quarter indicates that the financial position for the social housing sector is stable.
Specifically, the regulated sector has access to £20.4 billion in undrawn facilities and agreed new finance of £1.4 billion. Investment in new housing supply was £3.1 billion in the first quarter, and this is expected to increase with a £16.1 billion investment forecast over the period to June 2020. Cash balances total £5.3 billion – this is forecasted to reduce to £3.4 billion over the next 12 months to fund planned capital expenditure.
NHF publishes the revised Together with Tenants (“TWT”) plan and Charter
Following a two-month consultation, and taking into account over 2,500 responses, the NHF has laid out its plan to be piloted by 130 ‘early-adopter’ organisations. The rethink (released July 2019) builds on the original TWT plan, introduced in the wake of the Grenfell tragedy to give a greater voice to tenants, and focusses on testing four key actions:
Following consultation feedback, the NHF has carefully chosen wording that is universally understood, making the TWT Charter a resource which works for both landlords and tenants. The revised commitments are left to each RP to implement in a way that works for their tenants, and centres on themes of:
In the current early-adopter phase, the objective is to iron out the way RPs and tenants use the TWT Charter. At this stage, the commitments are there to guide RPs as to what is expected from them by tenants, and further opening the dialogue between the two. The early-adopter phase is earmarked to finish in Spring 2020, and we will provide an update of the NHF’s findings and what they mean to your organisation once they have been released.
In the meantime, the NHF has recently released a leaflet designed to help RPs prepare for the full launch of TWT, which can be found here.
Company Secretary update – Law Commission report on electronic execution of documents
The Law Commission published a report on 4 September 2019 detailing its view regarding the electronic execution of documents.
The report concluded that electronic signatures could be validly used to execute documents. The main findings of the report were:
Further information about this Law Commission’s report can be found in our e-briefing.
Charity Regulator – ‘Concerned’ by external charity accounts scrutiny
A study published on 28 August 2019 by the Charity Commission found that only around half of the randomly sampled charities met the external scrutiny benchmark for accounts. The benchmark is intended to ensure that charities meet basic requirements. This is particularly concerning given the number of recent cases of charities’ accounts falling short of expectations. The Commission has issued updated guidance in response.
The study found 77 cases where related party transactions were not properly disclosed, indicating that there may be issues where the trustees’ failure to manage conflicts may be under-reported. One recent example of this is in the Charity Commission’s recent inquiry into Bristol Sheltered Accommodation and Support (BSAS). In 2015, a trustee was also the director of a company that purchased one of the properties leased by BSAS. The inquiry found that this conflict was not properly managed. More information on the BSAS inquiry can be found here.
Good financial control is a key concern of the Charity Commission. In the BSAS inquiry, significant weaknesses were found in the charity’s historical accounts. Similarly, an on-going inquiry is examining potential misconduct at seven charities that are linked by two common trustees. Discrepancies have been found in the reported annual returns of the related charities, raising concerns over the financial controls, governance and management. More information can be found here.
Non-compliance with the benchmark may be used by the Charity Commission to raise formal complaints with professional bodies. The key message to take away, therefore, is for charities to check their financial controls, keep good governance practices and obtain advice from its advisors where there are concerns over the external scrutiny benchmark.
Happy New Year - our first newsletter of 2021! Throughout this year we will continue to bring you news and developments relating to the charities sector.
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