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Last Updated: Wednesday, 16 January 2008, 02:04 GMT
Charity rules for private schools
Eton wall game
Independent schools such as Eton must show a public benefit
Independent schools will have to show they are offering a public benefit if they want to keep their charitable status, updated regulations state.

The Charity Commission is publishing guidance which will require charities to demonstrate that they are not "exclusive clubs".

The guidelines will expect charities to be "outward-looking and inclusive".

Charitable status is estimated to save 100m in tax breaks for the independent school sector.

Following the Charities Act 2006, organisations wanting to have charitable status are expected to be able to demonstrate that they are operating for the public benefit.

Public accountability

The Charity Commission is now publishing its guidelines on what constitutes "public benefit", with supplementary information, specifically for schools, to be published next month.

"There is a two-way relationship between charities and society - registered charities enjoy considerable benefits in terms of their reputation and the tax advantages that go with their status," said the Charity Commission's chairman, Suzi Leather.

"In return, they should publicly account for what they do to benefit society, including people in poverty."

Charging fees is not a barrier to remaining a charity, but independent schools will be expected to show that they are offering benefits to a wider public.

Many independent schools already share their facilities or staff with local state schools and they might have bursaries or subsidised places.

But the guidelines warn that "charities must not be seen as 'exclusive clubs' that only a few can join".

"So, where the aims of a charity are more closed, inward-looking and exclusive, greater justification for the restriction may need to be provided," they say.

'Little to fear'

The Independent Schools Council (ISC) welcomed the guidelines, saying that they recognised that education was a charitable purpose.

The ISC said that schools had "little to fear" from questions about public benefit and that where there are concerns, there will be time and support for schools to adapt.

The body also said that the question of tax breaks needed to be put into the context of the 2bn per year that the existence of independent schools saves the state education sector.

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