Spotlight_Winter2012-13
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Transcript of Spotlight_Winter2012-13
Spotlight
The press is ablaze with talk of increasing possibilities for
charities and social enterprises to start delivering public services.
The Public Services (Social Values) Act, coming into force on 31st
January 2013, is adding further excitement. For the first time,
public bodies in England and Wales are required to consider how
services which they commission might improve the economic,
social and environmental well-being of their relevant area.
Procurement law already enables public bodies to take factors
other than cost into account, but many believe this legislation
will make it easier for voluntary sector organisations to compete
with the commercial sector when tendering to take on functions
from the public sector.
Whether your organisation is sharpening your pencil to start
writing bids or taking an interest from afar, there are important
issues to consider when tendering and contracting for such
services. Key considerations are as follows:-
◆◆ Can you do it? Ensure that any activities are within your
objects – this is particularly important for charities, but may
be relevant to others. For instance, if you are established to
benefit “children”, you might not be able to take on services
for 19 – 25 year olds.
◆◆ Plan ahead – ensure that you understand the arrangements.
If something is not clear, the contracting body may not have
thought about it. Producing a comprehensive business plan will
help minimise problems. Be particularly aware of overheads,
transitional costs and tax (including VAT).
◆◆ Structure – if this is a significant contract, consider your
organisation’s structure, perhaps with your accountant. For
example, do you require a trading subsidiary? If you are not a
charity, would charitable status lead to significant savings? Also
be aware of maintaining your independence in light of controls
that the public body may require.
◆◆ What is the public body doing? You may think that what
the public body does is not your concern, but it may affect
you. For instance, is a local authority allowed to transfer
particular services and, if so, is it complying with procurement
requirements? State aid may also be an issue.
◆◆ Income streams – will you be paid only by the public body or
are you reliant on third party income streams? If the latter, how
can you minimise possible risks (e.g. competition, popularity).
Will the public body pay you in any event or are you required to
meet targets? Payment by results grabbed headlines last year –
Jumping on the Public Services Bandwagon
Working with the Not-for-Profit Sector Winter 2012/13
CONTENTS
1–2 Jumping on the Public Services Bandwagon
2–3 Charities in Court: An update on recent caselaw
3 Client Focus – DEBRA
4–5 Energy Update 5 CIO Update 5 Meet the Team:
Julia Davenport-Cooper
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broadly, these can be divided into output and outcome-based.
If your payment is based on outcomes, there may be a time-lag
before money starts flowing.
◆◆ Staff – if staff will transfer to your organisation, carry out
appropriate consultation and checks and ensure that you have
protections in case problems arise. Ensure that you can provide
access to an appropriate pension scheme as required.
◆◆ Premises – if premises are part of the arrangements, will
there be a lease or licence? If premises are shared with other
organisations, understand how the arrangements will work
– you may need separate joint use arrangements. Ensure you
have the access that you require.
◆◆ Assets and liabilities – in short, consider which assets and
contracts your organisation will require and ensure that you
are receiving them, preferably without any historic liabilities.
We would recommend that you seek legal advice if you are
unsure about any of these issues and, unless you are very
experienced with contracting, definitely before entering into a
significant supply contract. For more information, please contact
Hannah Kubie [email protected]
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Jumping on the Public Services Bandwagon – continued
With the opening of the Charity Tribunal, we have seen a
slow but steady rise in the number of cases involving charities
reaching court. Vicki Bowles and Matt Watson discuss two
recent cases, and the lessons to take from them.
Catholic Care (Diocese of Leeds) CA/2010/0007Catholic Care is a charitable adoption agency, that receives
the majority of its funding from the Catholic Church. When
equality legislation came into force that made discrimination on
the grounds of sexual orientation unlawful, the charity sought
to amend its objects to take advantage of an exception to the
discrimination rule for charities with reference to a protected
characteristic in their objects. The charity argued that without
the amendment, the Church would withdraw funding, forcing
the charity to close, and thus impacting on the number of children
able to be placed with adoptive families. Since same sex couples
could access the adoption process in other ways, the charity
argued that potential harm to the children waiting to be adopted
if the charity closed outweighed any harm to potential adoptive
parents who could not access their services as a result of the
amendment.
In the latest Upper Tribunal judgement, the Judge has again
refused the appeal of the charity, on the grounds that the
evidence provided did not support the conclusion that there
would be a significant enough impact on children were the
charity to close to justify the discrimination.
This is a rather fact-specific case, but it does illustrate the
importance of working with your funders to ensure that
beneficiaries needs are best met. Cabrini – a charity with a
similar potential issue that operates in the South East – has
worked with local Bishops and is continuing to provide adoption
services in compliance with anti-discrimination legislation.
Cifci and others v Erbil and others [2012] EWHC 3170This case concerned an unincorporated association, where
there was a dispute as to the properly appointed trustees. The
charity had been established in 1993, with a formal constitution
dated 1994. In 2006, there was an attempt to pass an amended
constitution, which significantly changed the membership
application process, and how trustees were elected. The court
was asked to rule on which constitution was now valid, and due
to a lack of evidence that the 2006 constitution had been properly
Charities in Court: An update on recent caselaw
implemented, the court ruled that the 1994 constitution stood.
This case highlights the importance of minutes, and record
keeping. Although the charity had kept very detailed meeting
minutes, the AGM minutes for the relevant period had been
lost, and no “final” version of the 2006 constitution had been
produced. Good record keeping can really make a difference in
disputes, and where significant decisions such as amending a
constitution are being made, it is important that the note of the
decision is as detailed as possible. Although detailed minutes
will not avoid disputes occurring, they can play a significant role
in any resolution.
If you would like to discuss any of the issues raised above, please
get in touch with your usual Stone King contact, or Vicki Bowles
DEBRA is the national charity that supports individuals and
families affected by Epidermolysis Bullosa (EB) – a currently
incurable genetic skin condition which causes the skin to
blister and shear at the slightest touch. EB is caused by a
breakdown in the natural proteins that hold the skin and
internal membranes together, causing blisters and sores
that have to be lanced and dressed daily – an excruciatingly
painful procedure, taking hours.
Often, the blisters caused by EB leave scarring which can
result in permanent changes to the skin. For example, the
fingers may fuse together or tissue in the hand contract,
reducing movement. In the worst cases the mouth, throat
and tongue can be affected making eating and swallowing
very painful and difficult.
Three year old Mason has a severe form of EB meaning that
he has to cope with sores and blisters that constantly form
on his skin. Mason’s body is bandaged and he lives a routine
of lancing blisters, bandaging, coping with the pain and trips
to hospital.
His mum Kerry explains: “DEBRA has been a lifeline to us
since Mason’s EB was diagnosed. Mason is so precious, he
brings us so many tears but yet so much joy and pleasure.
When you see your child suffering, you treasure every day,
every smile, word and moment, as life with an EB child can
change so quickly. It’s Mason’s smile that has helped me
through the bad times.”
Caring for a young child who has EB can be an overwhelming
responsibility for many families and this is where DEBRA
helps. From the child’s birth, families can rely on DEBRA’s help,
emotional support and reassurance. DEBRA, in partnership
with the NHS, funds specialist nurses, as well as providing
social care staff to work directly with people affected by EB. It
also funds ground-breaking research into the condition with
the aim of one day providing treatments and, ultimately, a
cure for this excruciatingly painful condition.
Certain types of EB are fatal in infancy and others are severely
life-limiting causing aggressive skin cancer in young adults.
Children with EB are often described as having skin as fragile
as a butterfly’s wings. Around 5,000 people are affected by
EB in the UK and around 500,000 worldwide. EB appears in
all populations and racial groups and in both sexes. There are
many different kinds of EB.
With your support DEBRA can help other children like Mason
and their families and can continue to commission world-
leading research into EB with the aim of finding effective
treatments and a cure.
For more information visit www.debra.org.uk
Client Focus – DEBRA
Energy Bill On 29 November, the Secretary of State for Energy and Climate
Change confirmed the introduction of the Energy Bill to establish
a legislative framework for delivering secure, affordable and
low carbon energy. Whilst charity law does not require charities
with non-environmental charitable purposes to engage in
environmental activity, the Charity Commission supports
and encourages all charities considering the development of
environmentally sustainable practices wherever possible as a
way of maximising their effectiveness.
The Bill seeks to improve energy efficiency and to encourage low-
carbon energy production. It also sets out how Britain’s energy
supplies will be made more secure. Charities should give due
regard to the wider environmental and ethical implications of
their activities with commitment to reducing their impact on the
environment. We will be producing guidance in relation to the
Energy Act and Green Deal and how this can affect your charity
in due course.
Green Deal Cashback The Government has just opened the online Green Deal Cashback
portal where Green Deal Providers, charities and Community
Interest Companies wishing to take part in the Cashback Scheme
must register. The Scheme is an incentive enabling households to
claim money from Government on energy saving improvements
under the Green Deal. Householders who apply for the Cashback
Scheme will have the option to donate automatically some or all
of their Cashback to a charity or Community Interest Company
of their choice, provided the charity has signed up with the
Cashback Scheme Administrator. More information on how to
register is available at gov.uk/greendealcashback
Energy Performance Certificates Charity Landlord’s should note that the Bill sets a deadline of no
later than 2016 after which it will be an offence for a landlord to
re-let or market for rent a property in England and Wales which
is an EPC Band F or G, and a date before 2020 by which it will
become an offence to let a property of EPC Band E or lower. This
in turn means measures must be taken to make buildings more
energy efficient.
However there are various schemes and incentives available to
charities to help with building improvements and in reducing
energy costs.
Carbon Reduction Loans & Contracts Carbon reduction charities are being established which offer
low-interest loans of up to about £100,000 to charities and
social enterprises seeking to develop clean energy projects
that qualify for the government’s feed-in tariffs and renewable
heat incentive. These funds may be open both to clean energy
charities and to organisations interested in reducing their fuel
bills and carbon footprints.
British Gas meanwhile has developed a Charity Energy Contract
which is a not-for-profit initiative offering reduced energy bills
and support to small charities.
HMRC: Energy and Charities HMRC provides various benefits to charities in relation to fuel
and energy use:
1) Charities may be able to claim the reduced rate of 5% VAT
where fuel and power is supplied for a ‘qualifying use’ ie:
◆◆ for use in a dwelling or certain other types of residential
accommodation, such as a children’s home, hospice or care
home for elderly or disabled people;
◆◆ for use in charitable non-business activities, such as free day
care for disabled people.
(See: HMRC VAT guidance for charities and not-for-profit
organisations – reduced rate VAT on fuel and power used for
charity non-business use.)
2) If your charity qualifies for the reduced rate for fuel and power,
you should be excluded from the Climate Change Levy.
3) Certain supplies of water for domestic and non-industrial use
for charities are zero-rated.
4) The installation of energy-saving materials, such as central
heating and insulation in a building used solely for a relevant
Energy Update
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Energy Update – continued
We have patiently waited and now, at the time of writing, the
Charity Commission has registered the first three Charitable
Incorporated Organisations (CIO).
To refresh your memory a CIO is a corporate vehicle which
was established by the Charities Act 2006 and which will be
regulated by the Charity Commission. The main advantage
of the CIO is that it retains the corporate structure, limited
liability of members and legal personality of a company,
without the dual regulation with Companies House. The CIO
will be particularly useful for smaller to medium charities and
all charities which are providing services. There is currently no
provision for a register of charges (such as mortgages) and
so this may not be a suitable form for charities which wish to
borrow money against property.
Although the Charity Commission will be accepting applications
as a CIO for new charities with income of over £5,000 from 10th
December, no CIOs were able to join the Register of Charities until
3rd January 2013, to allow time for the regulations to come into
force. The Charity Commission has also released an indicative
timetable for when unincorporated associations and new charities
with income of less than £5,000 may be able to register as a CIO.
Please do contact us if you would like to register a new CIO or if
your existing charity wishes to convert into one.
CIO – at last?
Stone King is pleased to welcome
experienced construction lawyer Julia
Davenport-Cooper to the firm’s growing
commercial property team.
Julia joins Stone King from international
legal business DAC Beachcroft where she
specialised in major construction projects, Private Finance Initiatives
(PFI) and Public-Private Partnership (PPP) schemes.
Julia advised on a number of high-profile building projects including
the £800 million Pinnacle tower (the tallest skyscraper planned for
the City of London) and Brighton & Hove Albion FC’s new £60 million
stadium along with University student accommodation, commercial
office space, luxury residential schemes and Hackney and Kent BSF.
Prior to this Julia was a senior projects solicitor with UK law firm
Hammonds (now Squire Sanders) where she worked on large
projects acting for an SPV on a number of NHS LIFT schemes and
the governing body on the Manchester Schools PFI.
Partner Hugh Pearce, head of real estate practice development
at Stone King, said: “We are delighted to welcome Julia whose
construction experience and expertise perfectly complements the
team and completes the full range of property services that we can
offer to our property clients.”
Meet the Team: Julia Davenport-Cooper
charitable purpose is liable to VAT at the reduced rate. (HMRC
Reference: Notice 708/6).
Charity Commission – Going Green: Charities and Environmental Responsibility It is becoming increasingly clear that environmental sustainability
is an issue that charities, like other parts of society, cannot afford
to ignore. Charities exist to further their charitable purposes by
meeting the needs of the beneficiaries they exist to serve. By
participating in wider activities to support sustainability, there
are ways of actively enhancing charities’ reputations and making
a positive difference, whereas inaction may have a potentially
negative impact.
The Charity Commission publication “Going Green: Charities
and Environmental Responsibility” presents the Commission’s
findings from research into the ways in which charities are taking
environmental responsibility. It contains ideas that you may wish
to consider adopting, taking into account your charity’s own
particular situation.
For more information on Green issues please contact
Sally McFadden [email protected]
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Your Contacts
The Spotlight deals with some current legal topics. It should not be used as an alternative to specific legal advice on the individual circumstances of a particular problem. Stone King LLP - registered limited liability partnership no OC315280, registered office 13 Queen Square, Bath BA1 2HJ
Charity & Social Enterprise:Michael King Partner Jonathan Burchfield Partner Robert Meakin Partner Ann Phillips Partner Alexandra Whittaker Associate Hannah Kubie AssociateTom Murdoch AssociateVicki Bowles Barrister Sarah Clune Solicitor Darren Hooker Solicitor Reema Mathur Solicitor
Charity Legacy Team: Jonathan Burchfield Partner Robert Meakin Partner Paul Sutton Partner
Child Protection: Steven Greenwood Partner
Commercial Property: Hugh Pearce Partner Stephanie Howarth Partner Hugo Greer-Walker Partner Catherine Sanderson Senior AssociateAndrew Small Senior Associate Julia Davenport-Cooper Senior Associate Joanne Burton Associate Sally McFadden Associate Tamsin Simmonds AssociateDaisy Barnett Solicitor Chris Sharpe Solicitor Kathryn Williams Solicitor
Corporate & Commercial: Roy Butler Partner Brian Miller Senior AssociateCaroline Leviss Associate
Dispute Resolution: Paul Sutton Partner Antony Pidgeon Associate
Health & Safety: Andrew Banks Partner David Milton Associate Solicitor
Education: Roger Inman Partner Graham Burns Partner Stephen Ravenscroft PartnerJohn Clarke Partner Richard Gold ConsultantGeoffrey Davies ConsultantLaura Berman Senior Associate Michael Brotherton Senior Associate Kate Grimley Evans Solicitor Nicola Berry Solicitor Lydia Brookes Solicitor Ciara Campfield SolicitorLaura Giles Solicitor
Employment: Nick Watson Partner Peter Woodhouse Partner Jean Boyle Associate Tamsin Wilkinson Associate Victoria Blake HR Consultant Sarah Turner HR Advisor Amy Gordon Solicitor
Housing: Geraldine Winkler Legal Executive
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