We summarise key policy and regulatory changes over the quarter.
Charity Commission
- The Charity Commission has announced changes to the Annual Return for 2018. Charities are now required to include information on executive pay and the Commission will make public the number of individuals paid more than £60,000 p.a. (in bands of £10,000). More information.
- In November, the Charity Commission published ‘Taken on Trust’, the most up to date and representative report on trusteeship in England and Wales. The infographic below summarises the main findings. The research highlights challenges around lack of diversity on boards, and that over 50% of trustees do not know their legal duties. It also highlights that more could be done in supporting trustees. We are delighted to offer trustee training events around the UK, with registration on our website here .
- In November, the National Audit Office published its report on the progress made by the Charity Commission since the critical 2013 report which concluded that the Commission was ‘not an effective regulator’. Since then the Commission has carried out a transformation programme, which was highlighted in the NAO’s 2015 report as a work in progress. This report found continued progress although it is clear that there are areas still to be addressed, with the conversation continuing about how the Commission should be funded going forward.
- In December the Charity Commission also announced their new legal board member, Kenneth Dibble (previously legal director at the Commission). This has been criticised by NCVO as 'poor governance'. The Commission are currently recruiting their new Chair (to follow William Shawcross) having appointed Helen Stephenson as Chief Executive in July 2017.
Government
- In November, the government launched a report, published by an independent Advisory Group, looking at how to grow a culture of social impact investing in the UK which found there was considerable demand for investment products with positive social outcomes but that there was a lack of products, and knowledge in the mainstream investment community about social impact investing. The report puts forward 5 key action areas; improving deal flow; strengthening competence in the financial services industry; developing better impact reporting; making it easier to invest and maintaining momentum. We were pleased to contribute to a number of roundtables hosted by the Treasury as part of this research.
- In December, the government responded to the House of Lords Committee on Charities report, ‘Stronger Charities for a Stronger Society’. The original report highlighted governance as a key priority and made recommendations for charities, umbrella bodies and the Charity Commission. The government response is positive and sets out each of the 43 recommendations from the report, agreeing with them broadly. However, feedback from sector bodies has been lukewarm, as despite the general positive tone there was perceived to be little real action or clarity.
- The Government has announced its intention to develop a Civil Society Strategy that will coordinate and improve how public sector bodies interact with the charity sector. The Office for Civil Society will lead the work, starting with the launch of a listening exercise early this year. The statement made by Tracey Crouch can be read here. It is the intention that the recommendations from the House of Lords report will inform this strategy.
Legal
- The Law Commission published their report on Charity legal issues and a new draft Charities Bill on 14th September 2017 and await a government response. They highlighted a range of technical legal issues that are problematic to the sector and cause unnecessary expense, preventing charities from dedicating their full resources to the public good. Recommendations included a simplification of the process to amend governing documents and increased flexibility to use permanent endowments (to adopt total return). More details
- Changes to Secondary legislation making it easier for charitable companies to convert into Charitable Incorporated Organisations was approved by Parliament in November. The Charity Commission has announced a phased timetable based on income bracket, beginning from 1 January 2018, and produced updated guidance.
- General Data Protection Regulation becomes law in May this year and applies to charities as well as other organisations. The Information Commissioner’s Office (ICO) has published a guide and launched a dedicated telephone service aimed at helping small organisations (including charities) prepare for the new data protection laws.
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