Charities Newsletter – February 2021

We hope this e-bulletin finds you safe and well during this difficult time.

With the UK being plunged into a third lockdown at the start of 2021, many feel a sense of déjà vu as our lives are once again severely restricted. However, the charities sector continues to move forward, and is responding to the challenges of COVID-19. This newsletter brings you the latest of these updates for the charities sector.

Public Sector Network: Charities Update Webinar

Our charities team presented a webinar in conjunction with Blake Morgan’s Public Sector Network on Wednesday 17 February 2021. This gave a broad update on current issues affecting the charity sector, including the impact of the COVID-19 pandemic, recent updates to the Charity Governance Code, the implications of recent case law for charity members, and recommendations by the Law Commission for amendments to charity law. You can find out more and watch the recorded webinar in full here.

UK charities call on Prime Minister to set up emergency fund

Over 600 of the UK’s largest charities, including Cancer Research UK, Comic Relief and Samaritans, have signed a joint letter to Boris Johnson, calling on the government to set up an emergency support fund for the voluntary sector. The letter warns that hundreds of charities could be forced to close in the next few months, or have to make major cuts to services unless the government steps in and creates a fund to help voluntary organisations keep their services going. It is estimated that UK charities face an £10bn shortfall in income due to the pandemic, and there are concerns that the next year could be critical as funds and reserves run out whilst demand for charity’s services continues to rise.

The Government did create an emergency fund of £750m last year which was available to charities that provide domestic abuse services, health and social care services, food charities, mental health, homelessness, armed forces and loneliness projects. However, this money was required to have been spent by the end of March 2021. It remains to be seen how the Government will respond to the calls made in this letter.

Coronavirus guidance for the charity sector updated (again) in light of the third national lockdown

Since our last newsletter, the Government has updated its COVID-19 guidance for the charity sector several times, most notably to update the ‘charity meetings’ section to include recent government guidance about lockdown restrictions in England and Wales. Check the guidance for more information. Should you require any assistance or advice in relation to any of the new guidance, please do get in touch and we will be happy to assist.

The Government calls for evidence of success of funding support given to help frontline charities during the pandemic

The House of Commons Public Accounts Committee is seeking evidence to inform its inquiry into how well the funding support to help frontline charities who continue to operate during the COVID-19 pandemic has been distributed and whether it is achieving its objectives. The Committee will be questioning senior officials at DCMS and the Charity Commission, and has asked for any comments on the subject to be submitted here by 18:00 on 8 March 2021.

HMRC figures reveal that almost 9,000 voluntary sector organisations made use of the furlough scheme in December 2020

At the end of January, HM Revenue and Customs published the names of around 750,000 employers who have accessed the £46.4bn furlough scheme. The figures published shows more 7,200 charities and almost 1,500 community interest companies and societies made use of the furlough scheme in December 2020. HMRC have published this data to deter fraud and help employees spot cases where their employers were failing to pass on furlough cash. Further names are due be published in February.

Baroness Stowell warns charities against dividing people by supporting “woke” causes

In one of her final speeches as the chairperson of the Charity Commission, Baroness Stowell, has warned charities that “go out of their way to divide people” and allow people to takeover charities with political activism should expect to be investigated. Investigations by the Charity Commission have been launched into the National Trust over its publication of a report on some of its properties’ past links to slavery, and against Barnardo’s which was accused of “political activism” for publishing a blogpost on racial inequality and white privilege.

There has been some backlash against Baroness Stowell’s comments from charities, and the debate as to charities’ place in politics and activism continues on. Charity Commission guidance states that campaigning and political activity “can be legitimate and valuable activities” for charities, within the limits that require charities not to have a political purpose, and to also be independent of political parties.

Civil Society Forum to be set up as part of the UK’s Brexit deal with the EU

Charities are to be consulted by the UK and EU on the implementation of the UK-EU Trade and Cooperation Agreement, signed on 30 December 2020. There are two articles in the Agreement, under the heading “Institutional Framework” which outline the role of the voluntary sector in the implementation of the deal.

Article 6 states that “The parties [UK & EU] shall consult civil society on the implementation of this agreement and any supplementing agreement, in particular through interaction with the domestic advisory groups and the civil society.” Article 8 has a number of recommendations that include the organisation of a Civil Society Forum to discuss the implementation of part II of the Agreement. In addition, the forum should meet at least once a year, and include not only civil society organisations established in the UK and the EU, but also domestic advisory groups such as non-governmental organisations, business and employers’ organisations, and trade unions, the agreement states.

Green paper on reform of Government procurement rules published

The Government has published a green paper setting out new plans to overhaul Government procurement rules. The plans have been designed to encourage public bodies to support social issues and voluntary sector organisations, and to cut red tape, reduce bureaucracy and help unleash wider social benefits from public money.

There has, however, been some debate amongst charity leaders as to how effective the new procurement plans will be for charities. Kathy Evans, chief executive of Children England, and Paul Streets, chief executive of the Lloyds Bank Foundation, argued that grants were a better way for local and national government to guarantee quality and innovation from voluntary bodies. However, Streets said the plan “feels like an enormous opportunity lost”, he said, describing the paper as “a triumph of process over purpose” which would discourage charities and local authorities from working together to solve social problems.

Temporary change to Gift Aid on tickets sold for cancelled charity events made permanent

The Charity Tax Group have reported that a temporary change brought last year by HMRC allowing charities to claim Gift Aid on tickets sold to events that are cancelled if supporters decide against asking for refunds has been made permanent. There will be conditions for this to apply and formal HMRC guidance confirming the move is due to follow soon.

Our Charities team publish e-bulletins to keep you up-to-date with breaking news and topical issues affecting the sector.

To find out more about the Charities team and the work we do, please visit our Charities section.