One of the first tasks the Office of the Scottish Charity Regulator (OSCR) undertook shortly after its inception was a review of the charitable status of 52 independent fee-charging schools.
OSCR published a report on 8 December and a summary of its findings were:
- 40 schools met the test for charitable status and no remedial action was required;
- 10 initially failed the charity test, but after the schools took corrective action under the direction of OSCR, all 10 are now compliant; and
- two schools have other issues and, as a result, their reviews have been suspended.
As the review is complete, what is next for fee-charging schools?
OSCR has advised that it will carry out ongoing monitoring of independent schools to ensure that they continue to meet the charity test. This ongoing monitoring is not exclusive to schools: trustees of all charities on the Scottish Charity Register are under a continuous obligation to ensure that their charity acts within its charitable purposes and continue to provide public benefit. However, independent schools are now particularly within OSCR's crosshairs in its Targeted Regulation programme, especially since 20% of independent schools initially failed the charity test, which OSCR has said is a high percentage and keeps schools high on the risk agenda.
Most of the schools which initially failed to meet the charity test failed because a condition for accessing the benefit they provide, namely fees for attending the school, were considered by OSCR to be unduly restrictive. The process used by OSCR to determine if such a condition is unduly restrictive or not is set out more fully in their report. OSCR also comments on how an undue restriction can be tackled, including through facilitated access for those less able to pay.
What charities outwith the schools sector can take from the review is that OSCR is proactive in its review programme. It would be prudent for charity trustees to carry out an internal review to ensure their charity is compliant: preventative action rather than curative action!
For further advice on meeting the charity test (whether within or outwith the schools sector), OSCR's review programme or general charity law advice, please contact our Charities Legal Team on email@example.com.