Is the tide turning against charitable independent schools again?


Charitable independent schools are once again in the spotlight, as the controversy over whether they do enough to justify charitable status has re-emerged in the news recently. The Department for Education’s consultation (which closes on 12 December 2016) received a proposal from the Independent Schools Council to provide 10,000 free places to pupils from lower income families – but only if the government contributes £5,500 per pupil.

Critics (including the Chief Inspector of Schools, according to the BBC), argue that this is inadequate and that the places should be fully funded by the independent schools. However many independent charitable schools would struggle financially under the burden of fully funding such places.

There is also a concern that the scheme would cream off the brightest pupils from the state sector, further disadvantaging state schools.

Charitable independent schools benefit from various special rates and taxes as a result of their charitable status. In exchange for this status, charities are obliged to provide a public benefit. Opinions vary as to how far such schools should go in ensuring the educational benefits and facilities they provide are available to a sufficiently wide sector of society. Arguably there is insufficient public benefit if only rich people can afford the fees charged, because less well-off people are excluded from benefit.

The same issue was hotly debated following controversial Charity Commission guidance in 2008. The guidance applied to all charities, not just schools; but it attempted to set out in detail the sort of things a school should do in order to comply with the public benefit requirement, for example offering free places to poorer pupils. The controversy culminated in a legal case in 2011 which largely found in favour of the independent schools and criticised the Charity Commission’s approach. As a result the Charity Commission re-wrote its guidance with a less strict approach.

The result of the consultation is expected to be reported in Spring 2017 and will, no doubt, provoke fresh debate.

Penny Wright

Inheritance Protection
Charity Law

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