On Friday, 14 October 2011 the long awaited Tribunal decision on public benefit and charitable fee paying schools was issued.
The Independent Schools Council were quoted as being “delighted” that the Tribunal ruled that certain core elements of the Charity Commission’s guidance were wrong in law. The Charity Commission also claimed that it was “pleased” that the Tribunal agreed with its interpretation on certain key issues, although the Commission acknowledge that their guidance will need to be rewritten.
The key issues which emerge from the decision which help clarify the existing law are:
- A trust which expressly excludes the poor from benefitting cannot be a charity.
- Charitable fee paying schools must operate for the public benefit. This means that they must ensure that the poor can benefit in a way that is more than “minimal or tokenistic”, although this is not defined further.
- Trustees, rather than the Commission, must decide how their charity provides for the poor. In doing so they must act fairly in considering the interests of all beneficiaries and take into account the circumstances of their charity. The Charity Commission cannot set a specific level or amount of benefit as a minimum level.
- Crucially, bursaries are not the only way in which a way a school can deliver public benefit to those who are otherwise unable to afford the fees. This in particular is very helpful as it was originally mooted that a specific level of fees would need to be shown to be ‘given away’ in order to meet the public benefit test and it confirms the view that other activities, for example, providing facilities for teaching local state school children, can also count towards public benefit.
It is clear that the public benefit test will have to take account of the individual circumstances of each charity and that defining what is sufficient in each case is a subjective judgement.
The implication for now is that independent schools should continue to record the different elements of public benefit that they provide, and report on such, but that there is no definitive criteria that must be satisfied in relation to bursaries.
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