Talking to the Commission

Attain’s Editor, Matthew Smith, was given the opportunity to talk directly to the Chair of the Charity Commission, Dame Suzi Leather, on the day after publication of its new guidance for schools.

On the 11th March, the Charity Commission published its 'Draft Supplementary Guidance for Consultation' relating to charities for the 'Advancement of Education' and for 'Fee-charging' charities. Attain put its questions to Dame Suzi during a 30 minute interview:

The draft supplementary guidance has been published for public consultation. Do you anticipate significant changes to the guidance to occur and how would you take into account the feedback you receive? 'Well, first of all on feedback, I am very much hoping we will get a very large amount of feedback. We had the benefit of having fantastic feedback when we did the public consultation on the general guidance. We got nearly 1,000 responses and gained an awful lot from that and made some changes to the general guidance in the light of the consultation responses. I am very keen that in this consultation we hear from everyone concerned with the school sector, so that we hear not just from the charity lawyers but that we also hear from heads and bursars and teachers and parents...'

And the feedback that they give - that really will be taken into account and incorporated? 'Absolutely. We have got a really good track-record of listening well to results of consultations. In fact, the Independent Schools Council praised us for carrying out genuine consultation on the general guidance so...'

Unfortunately they didn't praise you quite so much yesterday. The Independent Schools Council called for guidance which is 'free from inconsistency, sound in law and workable in practice' but they feel that the Commission's latest guidance 'falls short in each of these areas'? 'Well, obviously I disagree. I believe that we have very good guidance for which there is good legal underpinning - so you wouldn't expect me to agree with that. But obviously, we will take into consideration anything which the ISC says to us as a response to consultation, after they have read the document.'

Well, I only got to read it late [on the afternoon of the 11th March], so their response was quite quick! 'So at this stage I can't say whether there would be huge changes - that will depend on the feedback we get.'

Parents of children currently attending independent schools will be angered by the suggestion in the guidance for 'increasing fees for some beneficiaries to subsidise fees for others who cannot afford the fees'. When independent schools have no means of opting out of their charitable status, surely this represents an extremely unfair outcome for parents already struggling to afford fees? 'I think it is really important that what we actually said is understood. We have given schools a very wide degree of flexibility in responding to the demands of the public benefit requirement. We are not being prescriptive about how they respond to that. We are not saying that schools should do it through bursaries - clearly bursaries are one way of doing it but they are not the only way and, in fact, we say that they may not always be the best way of delivering public benefit. [...] And I don't think, frankly, that it will be possible for many schools to raise fees... because many schools, particularly smaller schools, would find it well nigh impossible to do that, and that's why we have given them a range of other things they can do. So I don't think you can assume that fees will go up and I think that it is very important that parents actually understand that - so that there can be some parent power in this - can tell us what they think of [what] the school is already doing for public benefit... armed with the knowledge that we, as the regulator, are not pushing schools down a particular route...'

I think the concern is that there was a lot of emphasis on bursaries in the document and therefore the schools are feeling that they are either going to have to raise their fees or dip into reserves and a lot of the very small prep schools have got no reserves. 'But there is also emphasis on the other things which schools can do. One of the reasons why I think this is an important consultation is that we, as the Commission, will have a better idea of what the range of other activities can be [and] that range can then be shared with the sector through umbrella organisations. And that gives individual Boards of Trustees a much wider range of options from which they can choose.'

One option which was talked about was making facilities available. Should schools share their facilities with neighbouring LEA primaries and secondary schools and if so, does this constitute public benefit? 'I am not going to tell individual Boards of Trustees what they should be doing. This is a really, really important aspect. One of the most important aspects of charities is that they are independent so we, as the Commission, are not saying to Boards of Trustees that you have to do it this way - we are making suggestions about the ways you can meet the public benefit requirements, explaining what the requirement is, and what the legal underpinning is, we are treating schools no differently to any other charity...

I think that the frustration amongst Heads - and I spoke to three yesterday - was that once they had read it [the draft supplementary guidance] through they didn't feel things were any clearer. They are looking at it as 'tell us what you want us to do, and we will try and do it' and there wasn't enough clarity there. 'But I think that the discretion we are giving them is hugely important and if we weren't giving them that discretion I think that they would then feel that we were being overly prescriptive in how they run their businesses, and we are not prepared to do that. And the other thing is that you can't say what is 'one standard' that should be met by such a wide range of organisations doing such a wide range of things, in very different circumstances. So when we make those decisions we have to make them case by case.'

Putting aside the 'case by case', would a partnership be beneficial between, let's say, a prep school and a local primary? 'Of course a partnership can be beneficial. Of course it can be.'

And that would be considered as part of public benefit. 'Absolutely. But this is up to individual trustees.'

But there seems to be this difference between 'direct benefit' and 'indirect benefit'? 'We are saying that indirect - other ways of providing the benefit other than direct subsidy if you can't afford the fees - for reduced costs in other words - that there are other ways that you can ensure that people who can't afford the fees, have the ability, to have the opportunity anyway to benefit. And a partnership between the independent sector and the maintained sector is clearly one way of doing it. And then there are loads of ways of carrying out that partnership and there are clearly, already, fantastically good things going on between the independent sector and the maintained sector. One of the things which the public discussion so far has done is to actually demonstrate, often for the first time, just how much is going on already. And I have no doubt that most schools will have no problem at all in passing the public benefit test.'

But if there was a situation where a school really felt that they had no additional money surplus which they could afford to use to reduce fees, and they couldn't actually put the fees up - they felt that would actually risk the running of the business at the end of the day - and they were solely reliant on other factors, whatever they may be, that would be acceptable? 'We would look at that. I can't, without looking at a specific...'

What I am getting at here is would there have to be some degree of change to the fees in some way for them to pass a public benefit test? 'No. Absolutely not, no.'

So it is possible that a school could pass a public benefit test without any change to its fees whatsoever, and without any additional provision in bursaries? 'I believe that to be the case, and I think that is what the guidance signals.'

Carrying on with the partnerships theme, partnerships between schools are very hard to achieve, hindered in part by misconceptions on both sides about each other's motives. What will the Commission be doing to help foster better links between schools and ensuring that where there is willingness on the part of an independent school to engage with its LEA neighbours, they will accept it? 'One of the things we say in the guidance is that we recommend that schools... discuss with the maintained sector what it would be useful to provide because clearly what might be useful in one situation, won't be so useful in another. And I think that this discussion between the two sectors is going to be one of the most important things - long term - that the public benefit requirement generates.'

I think that sometimes there is a hostility there, and then a frustration on the part of some of the independent schools when they make an approach to an LEA school and they are not interested. 'But the evidence that we already have is that there does not have to be hostility.'

I realise that there doesn't have to be hostility but they are ideologically opposed, whether we like it or not. I spoke to one Head who had made an approach to four local primaries and only one of those primaries was prepared to engage... and that is unfortunately the reality on the ground. And somebody - either yourselves or DCSF - actually has to say, 'No, you must partner with these [independent sector] schools'. And that's the difficulty. 'Well, I hope that there will be goodwill on both sides. And where there is good will, obviously it is going to be beneficial to children in that area, whether they are being educated in the maintained sector or in the independent charitable sector. I can certainly see the advantage of good relationships on the ground between the two sectors and I think it is clear that if more of that happens, all our children in the country will benefit. And perhaps in some places this will take a little time to develop, and we can't expect this to happen overnight, but actually I think that people who I have met, who I have talked to involved in education - whether it is charitable independent sector or whether it is in the state maintained sector - at the forefront of their mind is: 'How do we get this right for our kids?' And where that is people's number one priority, I think that we will see enormous gains and I think that the country as a whole will have better education.'

In the case of independent schools, what offers greater public benefit - a bursary fund to provide a small number of completely free places, or a bursary fund which widens overall access by reducing fees? 'I think it is quite hard to make overall generalisations and obviously this will be an issue for individual Boards of Trustees, but if the problem is that you as a parent just cannot afford the fees at all, then clearly you will then think it is better if you can get the whole fees reduced. The guidance is clear - and I think the law is clear as well - that the requirement is not just that people who are living in poverty should be able to have an opportunity to benefit from charitable organisations, but that people who may not be living in poverty but still face some difficulties must also have some opportunities. And of course, what that implies is some sort of sliding scale of fee reductions.'

Of course, the Chancellor announced [in The Budget] that he wants to get all children out of poverty by 2020... But I think the issue with Heads... is that they are looking for that clarity, to know which way they should be going with it - whether they should be increasing the number of existing bursaries, getting rid of scholarships, or whether or not they should just be trying to reduce their fees as much as possible to broaden the access. 'I think that there is, in general - and this is one of the areas in which we consult on - a move from scholarships towards bursaries. But I am being very clear and saying that schools don't have to assume that the only way to provide public benefit is through bursaries.'

So my question leading on from this is what percentage of bursary places would be required to fulfil the requirements of public benefit - but that is a question you won't be able to answer. 'No. It is not possible for us to set an overall percentage. No, and I think it would be...'

And in the same way, what level of fee reduction would be considered as widening access? 'We are not being prescriptive. We are not saying that you must manage this minimum amount, because we will look at each school on a case by case basis.'

Well, that brings me back to [question] number one again as I know that any Governor reading this interview is still going to be very frustrated because they will be thinking, 'Well, what do we need to do?' - or should they just do nothing and wait until there is an inspection, and will the Commission then be more prescriptive? 'What, of course, many schools are already doing is reviewing what they are doing in the light of the guidance and are already even providing documents describing what they are doing for public benefit. To be charities, they must be providing public benefit. Doing nothing is not an option. I am confident that most schools will have no problem in passing the public benefit requirement. What I want Boards of Trustees to do is to look at the guidance, to look at all the ideas in the guidance, look at what they are doing against those public benefit principles and the ideas, and think about how they are going to describe in the next Trustee Annual Report what it is they are doing. And that is the most important start - it is to have that discussion at a Trustee level.'

I think that the problem is that they wish there was a benchmark that they could look at. 'But I think that they would find it very frustrating if that were the case. And also, what that would mean would be that we were not looking at organisations case by case, and I think that would be wrong. And, of course, this guidance is not just for schools - all charities have to be able to demonstrate public benefit and the guidance we have put out is for all fee charging charities, not just about schools. Schools are not being treated any differently from any other charity.'

To what extent does engagement with the Government's Academies programme satisfy the requirement of public benefit? 'We will look at what individual schools are doing. I can't say...'

But is it positive, or is it neutral? A lot of schools are spending a lot of money engaging in the programme. At the HMC Press Conference, Lord Adonis [Minister for Schools] was asked if a school engaged with the Academies programme whether this would satisfy the requirements of public benefit - he said it was a matter for the Charity Commission. 'Well, I think that the guidance is clear that partnerships are a very good way of demonstrating public benefit. Clearly it would depend on what the partnership was so I don't think that ahead of time you can say any engagement at all shows that you are doing sufficient public benefit.'

[Press Officer adds: 'I think that what you are trying to do is to look at a list of more than ten things in the guidance and somehow try and specify somehow which ones are worth more than the next, and that is not what the guidance is trying to say. It is looking at the public benefit as a whole not just picking out individual bits and saying, 'Is that enough? Is that enough?']

But it definitely has merit? 'Yes. It has merit. Of course it has merit, yes.'

And going back to the distinction between direct and indirect - it would be considered direct would it? If a school was fully engaged in the Academies programme, was sending staff to the school... [Press Officer comments: 'It is too early to say'] 'Well it is clearly an excellent way of demonstrating public benefit'

Does the Commission feel comfortable with the fact that small preparatory schools who cannot raise their fee income, and cannot afford to offer free places, run the risk of going out of business and thus depriving current pupils of their education. What would happen in a case such as this? 'We have been very mindful of the fact that there is a very wide range of size within the charitable education sector and wealth as well. And that's why we have been very clear to say that we don't have the same expectation of smaller schools that are much less well off than the larger, very well endowed schools. Clearly you ought to expect larger well endowed schools to be able to do far more than the smaller ones - and that's the proportionate approach. So we recognise that. We also said that we have no desire to remove the charitable status of any school; that if a school was having any difficulty in demonstrating that they meet the requirement that we would work with that school, over a period of time, to try to ensure that it could meet the requirement. That will require, of course, goodwill on both sides and I am confident that organisations will wish to retain charitable status, and the benefits that go with that, and will wish to be able to provide continuing good standards of education to their pupils. So, I have no reason to believe this will be a problem. But where it is - and where schools envisage that it will be a problem - please, please, come to us early and talk to us about it, because it is only then that we can help.'

And if they felt that there was nothing that they could do, then what would actually... happen? 'I don't believe that there will be nothing that they can do. There will always be something that schools can do.'

Matthew Smith is the Editor of Attain.
This article first appeared in the Summer 2008 issue of Attain.