The Charities Act 2022 – what does it mean for schools?

The Charities Bill has now worked its way through parliament and, having been given Royal Assent on 24 February 2022, is now law as the Charities Act 2022.

It is essentially a technical piece of legislation which makes changes designed to smooth and simplify the processes which charities have to follow in certain areas of their operation.

What are the key changes?

Rules on property disposals

Rules on property disposals have been relaxed. Instead of having to obtain a report from a RCS qualified surveyor on a disposal, the Act broadens the group that can provide the report to include fellows from either the National Association of Estate Agents or the Central Association of Agricultural Valuers.

The extent of the report can also now be more proportionate to the property being sold. These changes will be welcomed by schools which from time to time sell residential properties.

Amending governing documents

The rules which apply when charities wish to amend their governing document have been harmonised for all types of charity. Regulated alterations (being changes to objects, trustee benefit provisions and dissolution provisions) will still require Charity Commission consent.

Governing permanent endowment

The regime governing permanent endowment has seen a number of changes, including the ability to borrow up to 25% of permanently endowment funds without the consent of the Charity Commission and the ability to make social investments (which can result in a negative or uncertain return).

Ex gratia payments update

Charities will now be able to make small ex gratia payments (being payments which do not themselves further the charity’s objects) without the need for Commission consent and decisions can be delegated to staff.

Provisions benefit

Trustees can now benefit from provisions allowing them to be paid for the supply of goods supplied to the school (not just those provided with a service).

When will these changes occur?

Although the Act as a whole is now in force, the implementation of these provisions will take place gradually between now and Autumn 2023, as the Charity Commission updates its guidance and the necessary secondary legislation is enacted.

Therefore, although we now know what the changes will be, governors and senior leadership teams will need to stay alert as to when the timetable for implementation is published and the changes actually take effect.

How Moore Barlow can help

If you require guidance on what these changes mean to you and your school, please contact our independent schools team today.