A fee-charging school in Scotland has failed the 'charity test' of the Office of the Scottish Charity Regulator because it does not offer enough bursaries that cover a significant proportion of its fees.
The OSCR has today revealed its decisions on nine of the 40 fee-charging schools whose charitable status it is reviewing as what it calls a "priority group" for assessment by summer 2014.
The OSCR says Loretto School in East Lothian, which is described on its website as Scotland’s oldest boarding school, has failed the charity test. The eight other fee-charging schools passed the test.
In a statement, the regulator said it had issued a direction to the school requiring it to "widen access to the benefit it provides". The school has 18 months to comply with the direction.
The OSCR’s report into Loretto School says the proportion of its income that the school spent on means-tested bursaries – 6 per cent – was higher than that of some other fee-charging schools. The proportion of pupils at the school who received assistance – 15.6 per cent – was also higher than at many other schools, says the report.
But it says the means-tested bursaries offered by the school were mostly valued at up to 30 per cent of the school’s fees, although some could be increased to 50 per cent, and the majority awarded in 2012/13 covered only a small percentage of the total school fees.
The school charges £18,150 a year for junior boarding and an average of £25,935 for senior students to board.
"This means the impact of this assistance on removing the restriction constituted by the charity’s fees for those on low or no incomes is very limited," says the OSCR report.
It says the school provides public benefit in other ways, such as by allowing a local primary school to use its grounds, but these activities do not "mitigate the fees it charges, taking into account the level of those fees and the other forms of facilitated access it offers".
The school has until 31 March 2015 to "remove the undue restriction on obtaining the benefit provided by the charity", says the OSCR report.
In doing so, says the report, the school must increase "the impact of means-tested bursaries on the fees charged and taking other measures, as appropriate, to ensure that the charity meets the charity test".
In a statement, Loretto School said: "We are naturally disappointed by this outcome but strongly believe that, by working with the OSCR, we can satisfy the requirements of its charity test within the prescribed timescale. We are looking carefully into the OSCR report with a view to meeting the charity test as soon as possible.
"We are committed to providing means-tested bursaries whenever we can, and we shall continue to increase this support to families who need it most."
The eight schools that passed the charity test were Albyn School, Aberdeen; Hamilton College, Hamilton; Compass School, East Lothian; Glasgow Academy, Glasgow; Lewis Independent Christian School, Lewis; Mannafields Christian School, Edinburgh; Moray Steiner School, Forres; and Lathallan School, Montrose.