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The Road Ahead 2023: Responding to new laws and regulations

In this series, we examine the trends that will impact charities and volunteering in 2023. Here we shine a spotlight on new laws and regulations that may affect you.

This year, we’re expecting a series of new laws and regulations with implications for the voluntary sector. Here we share the highlights, along with tips to help you stay legally compliant.

For a more detailed breakdown, read this guide by law firm Withersworldwide.

New guidance on investments

In April 2022, the High Court issued its judgement in a landmark case about charity investment: the ‘Butler-Sloss’ case. The ruling confirmed that trustees have wide discretion (where appropriate) to exclude certain investments based on non-financial considerations when making financial investment decisions.

The judgement clarifies the process trustees should follow when making decisions about responsible investment. It also allows trustees to ensure their organisation’s investments align and don’t conflict with their charitable purpose.

This year the Charity Commission will continue with a planned redesign of its guidance on charities and investment matters. This redesign will:

  • provide guidance on the law around making financial investments on behalf of charities
  • incorporate updates to broader social investment guidance.

Learn more about the judgement in this article by Withersworldwide.

A number of laws currently going through parliament will affect how charities work – we’ve outlined some key ones here. The current session in parliament is due to end this spring but could be extended to autumn.

If you want to influence these bills, consider the points we raise in our article on adapting to political change.

Worker protection bill

The government’s backing a new bill that will create new legal liabilities for employers for failing to take reasonable steps to prevent third parties from harassing their employees.

It will also place a duty on employers to ‘take all reasonable steps to prevent sexual harassment’ of their employees, enforced by the Equality and Human Rights Commission. Third parties could include service users or volunteers.

Read more about the worker protection (amendment of Equality Act 2010) bill.

Data protection and digital information bill

Plans for new data protection laws will significantly impact how voluntary organisations collect, process, and gather data from supporters.

This bill was published in July but has been delayed. We don’t know when the bill will continue through parliament but further consultation is due.

Look out for updates on the data protection and digital information bill.

Online safety bill

This bill has gathered headlines for its impact on big tech companies like Twitter and Meta. But it could have implications for discussion forums run by voluntary organisations or volunteers too.

The bill’s currently undergoing major changes, and it’s unclear what the final requirements may include.

Keep an eye out for online safety bill updates.

Procurement bill

This bill aims to improve public procurement regulation – the process central and local government go through to source and purchase goods, works or services. We’ve been pushing for improvements to the bill since it was introduced in May 2022.

Whatever the outcome, we can expect changes to the way public services carry out commissioning and contracting with voluntary organisations this year.

Read more about the procurement bill and what it means for charities.

Protect duty

This duty will require those responsible for certain public venues to consider the threat from terrorism and implement appropriate and proportionate mitigation measures. It’s now known as Martyn’s Law, in tribute to Martyn Hett, who was killed alongside 21 others in the Manchester Arena terrorist attack in 2017.

Learn more about the protect duty.

Changes to annual reporting

This year, we can also expect major changes to how charities are accountable to regulators, partners and the public.

New and expanded annual return

Each charity must submit an annual return to the Charity Commission, which asks questions about the charity’s staff, finances and risk management.

New requirements came into force on 1 January 2023 and apply to charities’ financial years commencing on or after that date. The change significantly increases the number of questions charities must report on.

Find out what information you’ll be asked to share.

Changes to accounting rules

The Financial Reporting Council is currently consulting on changes to reporting that will take effect no earlier than 1 January 2025. This will impact the rules for financial reporting and auditing for charities, commonly known as Charity SORP.

You can expect more information on the impact for charities later this year.

Charity registration under scrutiny

This year we’ll also learn the outcome of a tribunal reviewing the Charity Commission’s powers to register charities.

Focused on whether the Charity Commission acted lawfully in registering the LGB Alliance, the ruling may have broader implications for how charities are registered, including opportunities for others to challenge registration decisions.

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