Key changes to charity law

The Charities Bill, announced during the Queen’s Speech on 11 May 2021, proposes several changes to charity law with the aim of making life simpler for trustees – to ease some of the regulatory pressures and reduce bureaucracy.

The aim is to address a range of issues in charity law which hamper charities’ day-to-day activities, by implementing the majority of recommendations in the Law Commission’s 2017 report ‘Technical Issues in Charity Law.’

Five of the key changes proposed are:

1. Charities and trustees will be able to amend their governing documents or Royal Charters more easily. Charity Commission and Privy Council approval will still be necessary in certain circumstances.
2. Charities will have access to a wider pool of professional advisers on land disposal and to more straightforward rules on what advice they must receive. This could save time and money when selling charity land.
3. Charities will have more flexibility to make use of a ‘permanent endowment’ (assets or investments where the capital value must be preserved). This includes a change which will allow trustees to borrow a sum of up to £25,000 of the value of their permanent endowment funds, without the Charity Commission’s approval. Checks will be in place to ensure the protection of the funds in the long-term.
4. Legal barriers will be removed for charities merging where a merger is in the charity’s best interests.
5. Trustees will have advance assurance that litigation costs in the Charity Tribunal can be paid from the charity’s funds.

These provisions will extend and apply to England and Wales. There are approximately 169,000 charities in England and Wales registered with the Charity Commission who will no doubt welcome these changes.

It will be exciting to learn more about the upcoming changes and the positive impact these will have on the governance and management of charitable schools. We enthusiastically await further information on the implementation of these proposals at which point we will provide a further update.