Policy round-up: November 2016

Here below is a glimpse into the many policy issues that have happened in November. I have not included the Autumn Statement, which was perhaps the most important event last month: for an expert analysis of what the Chancellor’s announcements mean for charities please see Michael’s blog post.

Charity Commission board appointments

Minister for Civil Society Rob Wilson has announced three new appointments to the board of the Charity Commission for England and Wales.
They are Laurie Benson, Paul Martin and Catherine Quinn. All three have taken up their new posts this month and will serve a three year term.

See our statement in response to the appointments.

Charities (Protection and Social Investment) Act implementation

The introduction of the Act’s provisions on automatic disqualification has been put back until at least September 2017. The initial date was April 2017, but following concerns expressed by NCVO and others (particularly charities working in rehabilitation and with ex-offenders), the commission has postponed the timetable.

This is a welcome decision, considering the potentially far reaching impact of the provision, which apply not only to trustees but also to individuals in a ‘senior management’ position. It is therefore important that before implementation goes ahead a full impact assessment is carried out, as well as a review of the waiver process so individuals have the opportunity to apply.

Independent inquiry into the future of civil society

The inquiry, chaired by Julia Unwin, has appointed a secretariat led by Forum for the Future in partnership with Goldsmiths University, Citizens UK and Open Democracy.

The work will start in January 2017 – see here for more information about the timeline and plan of activities.

New transparency requirements – Common Reporting Standard

The Automatic Exchange of Information regime, also known as the Common Reporting Standard, is an international tax transparency regime aimed at tracking money flows through financial institutions to those account holders tax resident in other jurisdictions.

The purpose is to pass this information on to the relevant tax authorities. While it’s aimed primarily at banks and financial management services, charitable trusts and foundations will be considered to be financial institutions if they rely on investments for 51% or more of their income and where some or all of those investments are externally managed by a financial institution under a discretionary mandate.

Charities that fall within the scope of the regime will therefore have to comply with a number of new requirements.

The Association of Charitable Foundations has published this update on how the new regime affects trusts and foundations.

Code of Good Governance

A new version of the charity sector Code of Good Governance is now subject to consultation. The consultation runs until Friday 3 February 2017. Proposed new features include the following recommendations:

• Boards should use the code as a tool for continuous improvement, rather than simply as an aide to meet minimum standards.
• Boards should take account of the wider voluntary sector in making sure that their charity operates responsibly and ethically.
• Boards should regularly review the external environment and assess whether the charity is still relevant. In particular the code recommends trustees consider partnership working, merger or dissolution if others are seen to be fulfilling similar purposes more effectively.

The code also proposes higher standards in a number of areas, including the following:

• Increased expectation in relation to aspects of board composition, dynamics and behaviours with explicit good practice recommendations about board size, frequency of board performance reviews and trustees’ terms of office.
• A new emphasis on the chair’s role in promoting good governance.
• Emphasis on board diversity, supporting its leadership and decision-making with a recommendation that larger charities publish an annual statement of the steps they have taken to address the board’s diversity.
• A presumption that charities should be open in their work, including a public register of trustees’ interests, unless there is good reason not to.
• A recommendation that charities use their annual report to say how they apply the code and an explanation of any aspects which they do differently.

The draft code and consultation questions are available at www.governancecode.org. It’s really important to make your views known, so please send your responses to contact@governancecode.org.uk.

In related news, a new Code for Sports Governance has also been launched by UK Sport and Sport England. The Code sets out the levels of transparency, accountability and financial integrity that will be required from any organisation seeking funding from Sport England or UK Sport, regardless of size and sector, including national governing bodies of sport, clubs, charities and local authorities.

DFID funding for civil society organisations

The Department for International Development (DFID) has set out a new system of central funding for civil society organisations in its Civil Society Partnership Review.

The stated aim is to simplify the system for funding civil society while ensuring it enhances existing high performing relationships and broadens the availability of support.

DFID’s main funding for civil society organisations will be:

• UK Aid Match – a scheme that match-funds public donations to charity appeals for projects to reduce poverty in developing countries, giving the British public a say in what international development issues are important to them. Doubling UK Aid Match is a manifesto commitment.
• UK Aid Direct – providing grants to small and medium-sized civil society organisations, primarily for work to directly tackle poverty in poor communities around the world.
• UK Aid Connect – a new partnership approach that will allow civil society organisations to work collaboratively, bringing together knowledge, practice and expertise for solutions to some of the most difficult development problems.
• UK Aid Volunteers – which will include the manifesto commitment to triple in size the International Citizen Service (ICS) youth volunteering scheme and provide opportunities for new partnerships with volunteering agencies.

Data protection

The Secretary of State, Karen Bradley MP, confirmed to the Culture, Media and Sports Select Committee on 24 October 2016 that the UK will be implementing the General Data Protection Regulation (GDPR) in May 2018. However, it remains unclear what amendments may be made to data protection laws once the UK has left the EU. The Information Commissioner’s Office (ICO) has published this blog post about how the ICO will support implementation of the GDPR.

Brexit

Arts Council report

The Arts Council England conducted a survey and shared the results alongside other evidence about the sector’s relationship with Europe following the referendum in its report ‘The arts and culture sector and exit from the European Union’.

Funding, ease of movement, legal and regulatory framework, and trade with the EU and other countries are the four main topics that have shaped the structure of the report.

Department for Exiting the European Union FAQs

The Department for Exiting the European Union has published a list of answers to frequently asked questions about the UK’s departure from the European Union. The list answers questions relating to the referendum, including a government statement that a second referendum will not take place, and questions on the process by which Article 50 of the Treaty on European Union will be activated. See the FAQs.

Great repeal bill

The House of Commons Library has published a briefing paper on ‘Legislating for Brexit: The great repeal bill’, following the Prime Minister’s announcement of this legislation in October.

The briefing paper considers issues likely to be raised by the bill, including the extent to which directly applicable EU legislation, such as EU regulations, will be transposed into UK law.