Editorial: A Dangerous Campaign?

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Shortly after the Charity Commission published its public benefit assessments of five independent schools, two QCs wrote to The Times newspaper to express their concerns. Leolin Price and Stanley Brodie both highlighted the view that the Charities Act of 2006 ‘neither created a new public benefit test nor authorised the Commission to create one.’ On page 10 of this issue of Attain, Leolin Price QC expands further his legal opinion and the conclusions are extremely serious.

One of the greatest concerns expressed by commentators when the public benefit assessments were first mooted was the likely impact on small, non-endowed preparatory schools. It is highly significant that the two schools which did not meet the Commission’s assessment criteria – and who will almost certainly be compelled to increase the provision of means-tested bursaries – are not large, wealthy establishments with surplus capital. Any board of governors faced with this kind of scenario would endeavour to avoid a fee increase but, were it to happen, stuggling parents may be forced to withdraw their children. And if this happened in significant numbers, the survival of the school would be put at risk. As Leolin Price writes, parents ‘will rightly ask whether the new ‘rules’ about ‘public benefit’ are lawful. My answer is that they are not and the Charity Commission is now dangerously engaged in a campaign to establish what, if it is not stopped, will achieve what Parliament and the Law have not authorised.’

This is a devasting judgement on the Commission’s activities. He goes further and puts into jeopardy the whole purpose of the assessment: ‘A school is sufficiently compliant with our law of charity if it is established for ‘the advancement of education’ without also providing ‘relief of poverty’. The Commission’s view is mistaken.’ The ‘campaign’ which Leolin Price recognises is widely-viewed as political and certainly ideological. I read with interest a particular comment given by Dame Suzi Leather, Chair of the Commission, to the House of Commons Public Administration Committee, on the 9th October 2008. One item of discussion was the notion that other charities would be able to use the assessments to ‘work it out for themselves’ and ensure compliance with ‘public benefit’. Dame Suzi commented: ‘This is good regulatory practice. This is principle-based regulation, not rule-based regulation.’ In my recent questions to her, I asked what was meant by this statement. ‘What I meant was it is based on the outcome to be achieved – in this case ensuring that people who can’t afford high fees have sufficient opportunity to benefit from the activities of the charity, rather than narrowly focussing on prescribing specific processes to be adopted’, she replied. Is this really what is enshrined in the 2006 Charities Act?

But it would be wrong to look at the public benefit assessments in a wholly negative light. They have provided the opportunity for independent schools to demonstrate and highlight, in an overtly public way, the enormous level of indirect benefit they bring to their local communities and society in general. From shared lessons with local maintained schools, through to providing access to playing fields and other facilities, there are an enormous number of ways schools engage with their communities. But the assessment requirement that the benefit must be exactly in line with the school’s charitable aims is unfair. Pangbourne College’s stewardship of the Falkland Islands Memorial Chapel, for example, does not count towards its public benefit assessment as it is not related to the aims of the charity.

In some ways, I do feel sorry for the Commission and the task they have set themselves. They should take comfort from the comments of Thomas Garnier, Headmaster of Pangbourne College: ‘Looking to the future, I do have some sympathy for the Public Benefit Review Team. They have been given a difficult, even impossible task, as every charity is different and there are so many of them, and they are not resourced to carry it out.’ I also have some sympathy for Dame Suzi, who has received a considerable amount of unfavourable press coverage for her membership of the Labour Party. She also had the joyous prospect of returning from holiday to face written questions from me, raising valid concerns about her organisation’s activities.

But if, as Leolin Price asserts, the Commission has in some way gone beyond its brief, with whom does this fault lie? The Commission? Or further up in Government? Whilst the Charity Commission is the independent regulator of charities in England and Wales, it is a ‘non-ministerial government department’ – something Stanley Brodie QC described as ‘constitutionally puzzling’. It would require a legal challenge to establish whether the Commission’s remit has been incorrectly extended. No single school will have pockets deep enough to fund such an enterprise. But what will happen if sufficient numbers of schools failed to comply with the Commission’s now apparent requirements on means-tested bursary provision and merely continued to stick to their own ‘public benefit’ criteria? Despite the Commission asserting that charities should now have enough guidance to pass a public benefit assessment, the waters are perhaps even muddier than before.

Above and beyond all of this, one key issue gets buried. Every child educated at an independent school is one less taking up a State subsidised place at a maintained school. As the Independent Schools Council point out, the Commission ‘fails to acknowledge the estimated £235 million of irrecoverable VAT that schools pay HMRC each year; a single statistic which far outweighs the oft-quoted figure of £100 million of tax savings for charitable schools.’ There was one last question I wanted to pose to the Commission but knew would not be answered: how much has this cost the taxpayer?

Editorial: A Dangerous Campaign?

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