An order laid before the Scottish Parliament on Wednesday will come into force later this year if approved by MSPs.
The plans follow a ruling last year by the Office of the Scottish Charity Regulator that ministerial powers to direct further education colleges were incompatible with the requirement in the Charities and Trustee Investment (Scotland) Act 2005 that charities should operate independently of government (Third Sector, 12 September 2007).
Further education colleges feared that they would lose millions of pounds of funding from charitable foundations and government funding to the charity sector if they were compelled to sacrifice charitable status.
Alex Salmond, Scotland’s first minister, said: “The Scottish Government needs to be able to keep further education in line with the needs of business and growth, while allowing colleges to maintain the charitable status that allow them to deliver.”
But Stephen Maxwell, associate director of the Scottish Council for Voluntary Organisations, said that the exemption undermined the independence rules set out in the 2005 Act. “It’s an irritant for the charitable sector,” he said.
“The colleges want to have their cake and eat it – to have charitable status and still be subject to government direction because they see that as their bread and butter.”
He said that colleges should follow the governance model of universities, functioning as charities reliant on public funding but remaining independent.