Public benefit update
October 2007
Scottish independent school assessed for public benefit
The Office of the Scottish Charity Regulator (OSCR) – the Scottish equivalent of the Charity Commission – has recently undertaken its first pilot assessment of an independent school in light of the new Scottish law on public benefit. Although charities in Scotland are subject to slightly different law compared to their English counterparts, both jurisdictions have recently agreed to the removal of the presumption of public benefit for all charities. Accordingly, OSCR’s recent decision provides an interesting insight as to how the Charity Commission may assess whether independent schools provide sufficient public benefit.
The High School of Dundee (“the School”) is an all-through co-educational independent school that selects on academic ability and charges fees that are broadly average for Scottish independent schools. OSCR found that the School did provide sufficient public benefit to qualify as a charity, taking into account the following factors:
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fee levels were not unduly restrictive taking into account the cost of education and the provision made for bursaries. Around 13% of the pupils were in receipt of bursaries which were awarded on the basis of financial need once the academic assessment had been made. In its last financial year the overall cost of bursaries was £475,091, of which the School awarded approximately £260,000 (this is set against an income of £7,565,000). OSCR noted the School’s efforts to publicise the bursaries available | |
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the selection of pupils on the basis of academic aptitude and ability was justifiable and reasonable in light of the School’s objects to advance education | |
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the amount of direct and indirect benefits provided by the School and associated with its charitable purposes. These included curricular and subject development work involving development of the Curriculum for Excellence and providing markers, moderators and other scrutineers in a wide range of subjects at all levels | |
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that the School made its facilities available to a range of third parties including those that were not involved with education (e.g. the Dundee Asian Society). This represents a slightly different approach to that stated in the Charity Commission draft guidance on public benefit which states that public benefit is only relevant for the purposes of satisfying the ‘charity test’ in so far as it is related to a charity’s objects. In the instance of independent schools this would typically be the advancement of education and would not extend to the advancement of sport or communities | |
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perhaps of most interest, was OSCR’s response to the argument that the existence of an independent school has a negative impact on state schools in the same area and/or that independent schools are a divisive influence in society. OSCR decided that “we cannot find any strong evidence in support of either of these views in the context of the charity test. Fundamentally, these arguments appear to relate to the independent school sector as a whole rather than to, in this case, the High School of Dundee” |
The full OSCR report is available at: http://www.oscr.org.uk/DocumentViewer.aspx?ID=790454db-c467-4fa0-af8e-4fbc08c3450a.
Public Benefit Guidance
The Charity Commission is due to publish the final public benefit guidance ‘Charities and Public Benefit’ in October. Following this, a three month consultation on how public benefit applies to various specific sub-sectors (including charities concerned with the advancement of education) will commence in November. The Charity Commission will simultaneously, in the same way that OSCR has, undertake a pilot public benefit assessment of charities which may have difficulty in meeting the public benefit requirement and this will almost certainly involve an independent school.
The new legal requirements on public benefit will come into force early next year with the sub-sector guidance due in June 2008 and the results of the pilot assessments due in September 2008. It will not be until September 2008 that the Charity Commission begin its formal assessments of charities on the register.
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