The charitable status of Scottish colleges has finally been assured after an order came into force compelling the Scottish Government to use the proceeds of any sale of their assets for other charitable purposes.
The status of colleges had been in question since the Office of the Scottish Charity Regulator ruled that any degree of ministerial control over them was inconsistent with charitable status. Last June, the Scottish Government used powers under the 2005 Charities and Trustee Investment Act to pass an order exempting colleges from that rule (Third Sector Online, 23 May 2008).
The latest order, which came into effect last week, answers the OSCR's concern about ministerial powers to demand that colleges hand over the proceeds of the sale of any of their assets. Ministers will now be required to give the money to another educational charity of their choice.
Fiona Hyslop, cabinet secretary for education and lifelong learning in the Scottish Government, said the ministerial powers had never been used. "This order represents the last brick in the wall in our steps to protect the charitable status of Scotland's colleges," she said.
Alan Eccles, an associate at the law firm Maclay Murray & Spens LLP, said the use of the order to deal with the special case of colleges demonstrated the flexibility of the 2005 act. "Without this secondary legislation, the OSCR would have had no leeway," he said.