Page last updated at 23:19 GMT, Monday, 13 July 2009 00:19 UK

Private schools charity threat

Boarding school pupils
Charity rules now mean private schools have to prove "public benefit"

Independent schools in England are protesting about "too narrow" rules for charitable status - as two out of five test-case schools fail to qualify.

The loss of charitable status threatens tax benefits for independent schools.

The Independent Schools Council says the rulings rely too much on the number of bursaries, with fees likely to have to rise to fund subsidised places.

The Charity Commission says charities must "demonstrate how they bring real benefit to the public".

The publication of the rulings is the latest stage in determining how fee-paying schools can retain charitable status .

'Deeply disappointed'

The refusal of this status for two of the first test-case schools - St Anselm's in Derbyshire and Highfield Priory, near Preston, Lancashire - has angered the independent school sector.


The Independent Schools Council says that the Charity Commission's decision has been based too much on the level of bursaries available - without taking into account contributions such as sharing facilities with other local schools.

"We are deeply disappointed with the approach taken by the Charity Commission, which focuses on the amount of means tested bursaries provided by each school," said David Lyscom, chief executive of the Independent Schools Council.

"The implication of the commission's findings appears to be that many schools must now aim to provide a significant, but still unspecified, proportion of their turnover in full bursaries. This will inevitably lead to fee increases."

Mr Lyscom also challenged the Charity Commission to recognise the collective benefit of the independent school sector, which he says saves the taxpayer £3bn per year.

And he said there was still the possibility of legal challenge over the rulings.

The requirement for charities to show a "public benefit" was introduced in the Charities Act 2006.

Implementing this legislation has raised questions about what this requirement means for fee-charging schools.

'People in poverty'

This first round of assessments of private schools has seen the approval of charitable status for three schools, Manchester Grammar School, Pangbourne College and Moyles Court School.

But for Highfield Priory, in Fulwood, Preston, the Charity Commission concluded that sharing facilities, running a holiday club and hosting sports events for local state schools was insufficient.

The school, which has about 230 pupils between the ages of two and 11 and charges £5,795 per year, failed to meet the "public benefit requirement".

The assessment says the school "does not ensure that people in poverty are not excluded from the opportunity to benefit".

In response, the governors of the school said: "As an established charity, we are confident that we will be able to meet the necessary criteria to maintain our current status."

Simon Northcott, head teacher of St Anselm's in Bakewell, Derbyshire, which also failed to qualify, said that smaller primary schools in particular would be "nervous at the findings".

"Simply in terms of the scale and size of the bursaries, they don't have what senior schools have in terms of resources," said Mr Northcott, whose school teaches about 250 three to 13 year olds.

These schools will now have to work with the Charity Commission on changes they can make to meet the requirements, although the rulings are confirmed as final and not open to appeal.

Dame Suzi Leather, chair of the Charity Commission, said: "Charities do a fantastic amount of good and have a unique place in society, which is why they enjoy such high levels of public trust and confidence.

"They receive the reputational benefits of being charities, as well as tax breaks, so in return it's right that they demonstrate how they bring real benefit to the public.

"The majority of the charities we've assessed are already providing public benefit in a variety of ways. The other charities are capable of doing so and remain registered, but they must now agree with us in the next twelve months the changes that are needed."

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