Monday, January 14, 2008

Charitable education

Something I have noticed being bandied about by columnists in the wake of the new Charities Act has been caught precisely by Ross Clark in today's Times.
I am all in favour of bursaries: but still there is a part of me that wishes one or two schools would call the Charity Commission's bluff and say stuff charitable status. Its benefits are worth only 2.5 per cent of the average private school's turnover, so why not stop subsidising the poor and cut fees so that our middle-class customers can better afford their villas in Tuscany?
The belief is that if independent schools, which are almost all charities under the original 1601 Act, feel that they have more to lose by upholding the new 'public benefit' test in the Charities Act than they gain by being charities, well why not up sticks and give up on the whole charity thing? But there's a very good reason why they don't.
However, the loss of charitable status is a very serious matter.The reason is that, under the current law, charitable assets remain charitable. If a charitable school loses charitable status, the assets remain charitable and will be used for charitable purposes which are the same as, or close to, the charitable objects of the school.
It is believed, or hoped, by some people that loss of charitable status does not involve more than the loss of the (generally small) fiscal benefits of charitable status, and that the school can continue as before, minus these fiscal benefits.That is not the case. Loss of charitable status involves major change.
A scheme will need to be approved by the Charity Commission under which the assets are applied to charitable purposes.Although that could possibly involve the school continuing in something like its former state (because its assets might be applied to another charity which wished to run the school much as before), this is only one of many possibilities, of which closure of the school and loss of its assets is equally likely.
In other words, the loss of charitable status will lead directly to the death of the school. This is the danger with the new Charities Act. The Charities Commission will have the power to close down every independent school in the land, by judicious application of the public benefit test. Worth bearing in mind, that.

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