Fee-charging schools public benefit case returns to court

Charity Commission and the Independent Schools Council have failed to agree

The Royal Courts of Justice
The Royal Courts of Justice

The Upper Tribunal has held a further hearing in the public benefit case between the Charity Commission and the Independent Schools Council, after the parties failed to agree on whether sections of the regulator’s guidance should be quashed.

The tribunal ruled in October that key parts of the Charity Commission’s guidance on public benefit were wrong and must be rewritten. The ruling came after the ISC argued that the guidance, which sets out what fee-charging schools must do to provide the public benefit required for charitable status, was based on an incorrect interpretation of the law.

In its ruling, the tribunal said the commission and the ISC should work together to agree which sections of the commission’s guidance, if any, should be quashed, meaning that they would lose their legal status and would not be valid during the period when the regulator drafts a new set of guidance.

However, the two parties could not reach an agreement on quashing the guidance, and at a hearing on 22 November the ISC asked the tribunal to rule on it.

Matthew Burgess, general secretary of the ISC, said the organisation believed all of the commission’s guidance on fee-charging and public benefit should be quashed, as should some sections of its more general public benefit guidance.

The Charity Commission said during the original hearing that if its guidance was found to be wrong in law it should not be quashed. It said it would make any "immediately necessary amendments" to the version of its guidance that appears on its website, but that the guidance should stand until the commission produced a new version.

"We were clear from the beginning that if part of the guidance was proved to be misleading then, because it is statutory guidance, the correct remedy is quashing," Burgess told Third Sector. "The commission’s stance would mean that trustees would still have to have regard to its old guidance, even though it has been judged to be wrong in parts, until the new version was ready. We think that is not fair to trustees."

Burgess said the ISC had tried to communicate with the commission, as requested by the tribunal, but it had quickly become clear that the two parties would not agree, so it referred the matter back to the tribunal.

In a statement, the commission said: "The tribunal’s decision invited the Charity Commission and the Independent Schools Council to agree the wording of a formal order regarding the impact of the decision on the commission’s guidance. Following the decision, we entered into discussions with the ISC over the form the order should take.

"However, the ISC referred the matter back to the Upper Tribunal for a hearing, which took place on 22 November. We are currently awaiting the tribunal’s decision."

A spokesman for the tribunal confirmed that it would publish its order in due course. He said he was unable to give an indication of when this would be.

The hearing was before Justice Nicholas Warren, Alison McKenna and Elizabeth Ovey, the judges that heard the original case.

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