Kaye Wiggins and David Ainsworth look at what the ruling means for the Charity Commission, fee-charging schools, charities in general, and the political debate
Independent schools: some pointers, but no certainty
The ruling says that trustees of independent schools must make "more than de minimis or token provision" for the poor, but they should do this by deciding what is appropriate in their individual circumstances.
The tribunal expressly avoids being prescriptive about how trustees should act. "We decline to give any sort of ruling which is intended to be definitive," it says. "Each real case will depend on its own factual circumstances."
The tribunal does, however, answer a series of questions, posed in the Attorney-General's reference to the tribunal, about how schools in particular circumstances could do enough to provide a public benefit. These answers might come to be seen as a general guideline.
They say a school providing bursaries or scholarships to 10 per cent or more of its students probably passes the public benefit test. Below that, the picture is less clear. "Where the line is to be drawn between 1 per cent and 10 per cent is not possible to answer on a hypothetical basis," the decision says.
It says a school where the only public benefit provision was a scholarship to one person each year would be unlikely to be doing enough. On the level of bursaries, it says, "we consider that 1 per cent remains too low".
Once the commission's new guidance is published, schools will face an uncertain process of determining whether their provision is more than "de minimis". Stephen Lloyd, head of charities and social enterprise at the law firm Bates Wells & Braithwaite, says: "This might be a lawyer's charter. Trustees will be very tempted to take professional advice."
Charity Commission: rewriting its guidance
The Charity Commission has publicly welcomed the tribunal's ruling and says it is happy to amend its guidance on public benefit, as instructed. However, the ruling does present the regulator with a number of new difficulties.
Chief among these will be the decision on what to make of the tribunal's repeated use of the terms "de minimis" and "tokenistic". The judges have said schools must offer a benefit beyond this level to those who cannot afford the fees, but have offered little by way of an explanation of what this might mean in practice.
Trustees will no doubt want some explanation from the regulator about how they can be sure the public benefit their school offers will be deemed to be more than tokenistic or de minimis. But the commission will be wary of taking a prescriptive approach - not only because the tribunal's decision censures it for having done this in the past, but also because this would leave it vulnerable to further legal challenge from the Independent Schools Council.
The commission's new guidance is likely to stress the importance of trustees being free to make their own decisions about the level of public benefit they think it is appropriate to provide.
But even this approach carries a risk; it will be possible for those opposed to private education to lodge a complaint with the regulator that a particular school is not meeting the de minimis level. The commission will then have to assess whether this is the case - and make a decision that could well lead to further legal action.
Other charities: only a limited impact
The judgement makes it clear that what defines public benefit for educational charities is not binding on all other charities.
But it has implications for charities that charge high fees, such as charitable care homes and arts organisations. It makes it clear that they also cannot exclude people unable to afford the fees.
A spokesman for the Royal Opera House says arts organisations are unlikely to face the same public benefit problems as independent schools because it is relatively easy to make their activities accessible to the wider public.
"We provide many free and cheap educational services," he says. "That's our public benefit."
The ruling also makes it clear that if a charity is not fulfilling its objects, it is the trustees who will face censure, rather than the charity itself.
Tom Murdoch, a charity lawyer at Stone King, says: "If in practice a charity isn't fulfilling its public benefit, it is the trustees who are in breach of trust. Registration of a charity depends on its purposes.
"This still gives the commission scope to examine charities' public benefit, but not quite in the way it claimed in its guidance on fee-charging organisations."
The political debate: up in the air again
The Prime Minister, David Cameron, said in his speech to the Conservative Party conference earlier this month that private schools should do more for those unable to afford the fees.
"The apartheid between our private and state schools is one of the biggest wasted opportunities in our country," he said. "Let it be this party that helps tear it down. I want to see private schools sponsor academies in the state system."
But the tribunal's judgement does nothing to encourage fee-charging schools to go this far. In fact, it says, "in some circumstances, it may be that the trustees would be acting properly if they provided a quite modest benefit for the poor in excess of the de minimis level".
The judgement does, however, kick the issue back into the political arena. The "public benefit" requirement in the Charities Act 2006 resulted from a compromise between factions of the Labour Party. One, including the Chancellor at the time, Gordon Brown, wanted to force charitable private schools to offer social value, but others - including the then Prime Minister, Tony Blair - wanted to avoid a confrontation with the powerful public schools lobby.
As a result, the Charity Commission was given the unenviable task of deciding what private schools should do to justify charitable status and its tax exemptions. The tribunal's decision makes it clear this should be the job of parliament, not the judiciary or the regulator.
"Our decision ... will satisfy neither side of the political debate," it says. "But political debates must have political conclusions, and it should not be expected of the judicial process that it should resolve the conflict between deeply held views."