A new Government plan for Civil Society

At the end of the summer, the Government published its long-awaited Civil Society Strategy.

The main chapters cover the various areas of society towards which the Strategy is directed, with the chapter titles indicating their broader aims:

1. PEOPLE: enabling a lifetime of contribution
2. PLACES: empowerment and investment for local communities
3. THE SOCIAL SECTOR: supporting charities and social enterprises
4. THE PRIVATE SECTOR: promoting business, finance and tech for good, and
5. THE PUBLIC SECTOR: ensuring collaborative commissioning.

The Strategy's authors have then categorised the Government's various "missions" under these headings.

For the purposes of the Strategy, civil society "refers to all individuals and organisations, when undertaking activities with the primary purpose of delivering social value, independent of state control".

Chapters 1 and 2 - People and Places

These contain proposals that will no doubt open doors for local charities and community groups, but are less relevant to larger, national charities.

Chapter 3 - The Social Sector

This is, of course, most relevant to charities generally. The missions in this chapter are:

The voice of civil society

Among other things, the Strategy states that the Government wants charities and social enterprises to be confident in their right to engage in public debates and to have a strong campaigning and advocacy role. However, the Government has already said that it does not intend implementing Lord Hodgson's recommendations for reform of the Lobbying Act, and the Strategy maintains the Government's commitment to "gagging clauses" in public contracts.

On the up-side, the Electoral Commission has already started work on improving its third-party campaigning guidance for civil society organisations, and the Government intends to listen to charities when formulating policy, by convening a cross-government group to work with civil society "to establish the principles of effective engagement in the policy-making process". The Government will also renew its commitment to the principles of the Compact (being an agreement between the Government and the third sector).

Funding and financing the social sector

"Social investment" and "social impact investment" are a running theme throughout this chapter. It refers to a number of initiatives, aimed at helping charities and social enterprises become investment-ready and navigate the social investment market. It also mentions reducing restrictions on the size and type of projects that are eligible for Social Investment Tax Relief.

Leadership, support and regulation

In relation to leadership, the Strategy talks (somewhat vaguely) about investing in the skills of, and improving the diversity of, trustees.

Under the other headings, there are commitments to developing and implementing measures to strengthen safeguarding in charities, to reviewing the work of the Fundraising Regulator, and to working with the Charity Commission on options "for placing it on a secure and sustainable financial footing".

A social sector confident with digital

This starts from the premise that the sector has been slow to adopt digital technology and would benefit from assistance to develop confidence and skills in this area. There are already a few programmes underway, but the Government plans to add to these, and to support the creation of a Charity Digital Code of Practice.

Chapter 4 - The Private Sector

Some of the initiatives in this chapter will be applicable to social enterprises (or, at least, those that derive their income from trade). For instance, the Government will work with civil society partners to raise awareness, and enable the use, of community shares (a social investment model that gives communities an opportunity to purchase a stake in local community enterprises). There will also be a push to promote social impact investing, with a view to making it regular business practice for individual and institutional investors.

Chapter 5 - The Public Sector

For some charities, this may be the most interesting chapter of the Strategy. In the introductory section, there is a welcome acknowledgement that, whilst the use of contracts has brought some benefits, it has also – together with the focus on best value – led to a "transactional model of service delivery" that lacks flexibility.The Government wants to see public service markets enabling collaboration as well as competition, acknowledging that different types of funding are appropriate in different circumstances – including grants.

In addition, the requirement in The Public Services (Social Value) Act 2012 for public sector commissioners to "consider" economic, social, and environmental factors in their procurement will be replaced with an expectation that they will to "account for" those factors.

What next?

The Strategy only applies to England and is not the Government's final word. In its "Next steps" section, the paper says that since much of the Strategy consists of commitments to work in collaboration with partners in various sectors, it is, rather, "the beginning of what will be an ongoing and evolving programme of work across government and civil society". The Strategy is intended to be realised over a long period – the document refers to "multiple parliaments". The Government will look to develop a way of measuring the success of the Strategy, with the DCMS providing biennial updates on the commitments in it.

In coverage of the Strategy in the sector press, the changes to the 2012 Act and the revival of grants hogged the headlines. It should be borne in mind, however, that not only is the Strategy a very long-term vision, many of the ideas are expressed as aspirations rather than concrete plans, or are couched in terms of the Government "exploring options".

You can read the full strategy here. The Executive Summary is worth a read if you want a quick overview of the Government's plans (and is also available as a stand-alone document).

This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.

© Farrer & Co LLP, December 2018