The majority of independent schools in England are registered charities, which means that they need to comply with charity law including the Charities Act 2011. The Charities Act 2022 has made some technical changes to the 2011 Act to simplify the processes that charities must follow in certain areas of their operation.
These changes are being implemented gradually, with the first tranche having come into force on 31 October 2022. Further changes are expected to be implemented in Spring 2023 and Autumn 2023, but at the time of writing, no precise dates have been confirmed yet.
New Powers already in force – Supply of Goods and Fundraising Appeals
Since 31 October 2022, charity trustees have been able to benefit from new statutory powers allowing them to be paid for supplying goods to their school, even if these goods are not connected with the provision of a service.
Changes have also been made to reduce the complexity surrounding what trustees need to do in situations where fundraising appeals have not raised enough money to deliver their intended aim or raise too much so that there are funds left over.
However, there has been a postponement to the introduction of new powers which would have enabled charities to make small ex-gratia payments without consent from the Charity Commission. These provisions are under further consideration and no date has been given as to when they will be implemented.
Spring 2023 – Property Disposals and use of Permanent Endowment
The changes expected to come into force in Spring 2023 include some slight relaxations to the rules for charities selling land. Currently, trustees need to obtain a report from a RICS qualified surveyor. However, the group who will be able to provide the report will be expanded to include fellows from either the National Association of Estate Agents or the Central Association of Agricultural Valuers. The requirements setting out what the report must cover are also expected to be simplified. These changes will be welcomed by charitable schools who are considering selling property.
Other changes will give greater flexibility to charities to make use of permanent endowment. These will include a new statutory power to enable trustees to borrow up to 25% of the value of permanent endowment, subject to repayment within 20 years, without having to seek an order from the Charity Commission.
Autumn 2023 – Amending Governing Documents and Appointment and Remuneration of Trustees
Further amendments to the 2011 Act are expected to come into force in Autumn 2023. These will include changes to the rules which apply to charities who wish to amend their governing documents. Charitable companies will still need the Commission’s consent to change their charitable purposes, but the Commission will be required to apply a new test when deciding whether to grant consent.
Other changes to be made in Autumn 2023 will include new powers to enable the Commission to ratify the appointment of a charity trustee where there is uncertainty as to whether they were properly appointed or any defect in their appointment. The Commission will also be able to order a charity to remunerate a trustee for work carried out for the charity where they consider it to be inequitable for the trustee not to be paid.
How Moore Barlow can help
If you have any queries or require guidance on what these changes mean to you and your school, please contact our Independent Schools Team.