The Cabinet Office has published a timetable that explains when the different sections of the new Charities Act are going to take effect. Largely these are broken down into three separate phases – July 2016, October 2016 and April 2017. 
Many of the Act’s provisions help to address gaps in the Charity Commission’s protective powers and will only affect a relatively small number of charities and individuals.
However, it also makes a few significant changes – most notably on disqualification - of which all charities will need to be aware. The timetable gives trustees sufficient time to take any action that is needed.
The main changes cover:
1. Consultations on how the Charity Commission use their new powers to disqualify and administer official warnings
The Charity Commission are going to be consulting about how they use their power to disqualify individuals from being trustees and holding senior management functions. They will seek views on an updated version of last year’s policy document which set out how they plan to use the power and the factors that will affect the length of the disqualification. The consultation will last three months.
The Charity Commission will also be consulting on how they will use their official warning power that will be available to them from October. That consultation is likely to start in late June and will be publicised widely.
2. Power to make social investments
The Charity Commission are going to be updating their investment guidance in time for the introduction in July of this power which allows trustees to invest their charity’s money to get a financial return (even if it’s below a commercial rate) and, at the same time, further its charitable purposes .
3. Other protective powers
In July, a number of protective powers will come into force including the power to direct a charity to wind up and the power to direct charities to not take a particular action. Some of these powers can only be used when the Charity Commission have opened a statutory inquiry. As such, most charities and trustees will not be affected but these powers will improve the Charity Commission’s ability to resolve cases with a better regulatory outcome when they are used.
4. Fundraising agreements – new terms, new accounting requirements
October will see the introduction of changes to fundraising agreements, following last year’s concerns about charities’ fundraising activities. They will require, in addition to existing requirements already in force, agreements with commercial fundraisers to be clear about certain standards, how they protect the public (including vulnerable members of the public) and how the charity monitors their compliance. They will also require auditable charities to include statements about these matters in their annual report. Look out for more information about these requirements in the updated version of the fundraising guidance (due in June) and in the updated accountancy guidance.
5. Automatic disqualification changes
Next April will see some badly needed strengthening of the list of reasons that will automatically prevent someone from being a trustee and will include, for example, unspent convictions for terrorism or money laundering, or individuals who have been convicted of certain sexual offences. It’s also going to mean that all the automatic disqualification provisions (including the existing ones covering bankruptcy, individual voluntary arrangements, convictions for dishonesty and deception related offences) will cover senior managers such as those in chief executive and finance director positions.
The Charity Commission will be issuing more information to help charities identify if these disqualification provisions will affect them. The start date is 1 April 2017. Those who are disqualified will need to stop acting in these positions or apply for a waiver, which will be decided upon on a case by case basis. A timetable and more information on this will be issued soon.
The overall timetable that has been published will help the Charity Commission plan and prepare to use the new powers they have been given. It will also give charities and trustees the opportunity to plan for any changes that they need to make as a result of some of the new provisions.
For further information, visit: https://charitycommission.blog.gov.uk/2016/05/20/how-will-the-new-charities-act-affect-your-charity/