Recent headlines that three of Scotland's independent schools have failed the"charity test" set by the Office of the Scottish Charity regulator (OSCR) have again raised the issue of charitable status for schools. Fettes College and St George's School for girls in Edinburgh, plus St Columba's School in Kilmacolm were told by OSCR that the high fees they charge were unduly restrictive and stopped the"public benefit" which charities must offer under the Charities and Trustee Investment (Scotland) act 2005.
No school has yet lost its charitable status – worth millions to the sector in tax breaks and other savings – but it's the second time that Scottish independent schools have failed the initial test, four doing so in 2008. All four have since complied with OSCR's directions to widen access to the school, and the latest three say they will also do so.
John Edward, director of the Scottish Council of independent Schools, says:"The three schools are working with OSCR already and I'm confident they will turn things around.
We have 23 schools which have passed the test now, and none has been stripped of its charitable status.
"This is a very tough test, tougher than in England and Wales, but I am confident that all our schools know what is expected of them and the remaining schools will be well on their way to delivering it."
Simon has long experience of advising independent schools about charitable status and is also a former chairman of Edinburgh academy.
Charities Must Prove Public Benefit
He says:"Under the old law, there used to be a presumption that any institution that was for educational or religious purposes or the relief of poverty was assumed to be providing public benefit. Now, every charity has to show that it is indeed for the public benefit.
"It's an 'on balance' assessment, and what has to be balanced up is the benefit to society as a whole from the activities of the charity against the private benefit to those who, for example, work for the charity."
OSCR is duty bound to examine "undue restrictions" that stop the gaining of public benefit.
Simon went on to say "OSCR is looking at 'undue restrictions' in terms of the fees that are charged by the schools, balanced against school bursaries – if you have a generous bursary scheme you will almost certainly pass the test."
Simon agreed that OSCR has indeed targeted independent schools:"When that new law came in, OSCR had to look at those charities which they thought were most at risk of failing the new test, and that included fee-charging charities such as schools, nursing homes and care homes.
"Schools have generated most of the complex legal work, and most of the headlines, but having started on the schools, OSCR now feels that it has to complete that area of its work.
"The first lot of schools that failed the test were given three years to comply, so I was quite surprised that OSCR only gave the three latest schools just 18 months to comply, so there is certainly a tightening of the timescales."
So far, independent schools have all sooner or later complied with OSCR's requirements, and Simon sees that as a good thing:"The 2005 act was intended to change behaviour, and I think you are seeing a law that is actually working," he said.