THE CHARITY COMMISSION, PRIVATE SCHOOLS AND PUBLIC BENEFIT-MORE COCK UP THAN CONSPIRACY?

Charity Commission will leave it up to private schools to determine public benefit

And will only act if substantive complaints  made against a school

Comment

The Sunday Times covered the recent news that the Charity Commission has backed down in a six-year battle with private schools over the tax breaks they enjoy from their charitable status. The commission, chaired by Dame Suzi Leather, who irritates many  conservatives because of her close links with the Labour party,  and  her career in the quangocracy, has announced it will no longer carry out assessments of schools to decide whether they are doing enough to provide “public benefit” under legislation passed by the last Labour government. Alan Milburn said memorably that the Charities Act will have failed if most private schools   retained their charity status. On that basis it has failed. Public benefit is at the heart of what it means to be a charity. The Charities Act 2006 requires all charities to have aims which are, demonstrably, for the public benefit. A Trustees’ Annual  report must include  ‘ a report of those activities undertaken by a charity to further its charitable purposes for the public benefit.’  Many on the left had seen the new Act as a means of attacking and fatally undermining the private sector by removing charity status. Politicians though passed the buck to the Charities Commission to define what Public Benefit actually meant in education and in schools. Its initial guidance was   a study in opacity and left schools largely in the dark and uncertain as to what they had to do to demonstrate public benefit. There was a pilot programme in which  five  schools were examined by the Commission  to see if they measured up to the new public benefit criteria. Or, as the Commission put it, ‘to illustrate how the public benefit principles identified in its guidance apply in practice’. Two of the five  schools were told that they had failed the public benefit test.  In the opinion of the Commission they ‘failed to demonstrate that they made more than minimal or tokenistic provision for the poor to benefit (identified in the Commission’s fee-charging guidance as a requirement of charity law) and so were required by the Commission to prepare plans to address this. Both schools subsequently did this to the Commission’s satisfaction.’ The Commission then came under intense pressure from private schools, who through the ISC   immediately threatened to launch a legal challenge to its interpretation of the Act (the ISC lawyers said that the Commission was making up the law as it went along). The Commission had created the perception that the number of bursaries offered by a school would provide the clearest indicator of public benefit.  This managed, simultaneously, to alienate both sectors. State schools were worried that this would provide a licence for private schools to up their game in poaching their best pupils. Private schools, on the other hand, were determined to preserve the independence of trustees to determine what measures would satisfy the public benefit requirement.  In May 2011 a judicial review was brought against the Commission’s guidance by the ISC challenging the legal basis of that guidance. The Upper Tribunal gave its judgment in October and December 2011. In short, the judgement found that the Commission had failed in its  efforts  to provide clarity on this, albeit complex, issue. The Tribunal  found that parts of the Commission’s guidance on public benefit were ‘obscure’ or ‘wrong’. The Tribunal ruled that it is for the trustees of a fee-charging charity to decide how best to meet that obligation in the circumstances of their charity (not for the Commission, the Tribunal or the courts), provided they did so in a way that any reasonable trustee would have done, and that support should not be tokenistic. The Commission says it now will leave it up to schools to decide how to provide benefits to the community and will act against them only if they receive complaints with evidence that they are abusing charitable status. The Commission is currently in the process of redrafting the guidance and aims to publish it in draft form in spring 2012. There will then be a public consultation for three months before publication of the final guidance in summer 2012.However this is spun by the Commission, it amounts to a defeat for it, in that its initial guidance was found to be inadequate, a charge that had been laid firmly at its door by private schools at  the  very beginning of the process. Its been a pretty unimpressive performance from  Commission  and was entirely avoidable.

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One thought on “THE CHARITY COMMISSION, PRIVATE SCHOOLS AND PUBLIC BENEFIT-MORE COCK UP THAN CONSPIRACY?

  1. I’m old enough to remember when equally spineless politicians used the inland revenue as their fall guy to do something similar at Malvern College in the seventies. Besides pointing out that one man’s “public benefit” is another man’s waste of taxpayer’s money, I’d seriously suggest this whole business exposes the Charity Commission as a deeply flawed organisation. Doesn’t any attempt by one human being to impose a charitable act on another, by definition render that act…uncharitable?

    One reason I’ve always struggled a bit with the way some schools impose collections for charities on their pupils. It’s not really teaching them much about charity!

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