Simon Hebditch: Private schools raise questions about charitable status

Public benefit should be straightforward to prove, says our columnist

Simon Hebditch
Simon Hebditch

The charitable status of private schools continues to pose a challenge to us. I noticed the recent climbdown by Dame Suzi Leather of the Charity Commission on the amount of time such schools will be given to make sure they meet public benefit criteria in return for the £100m of charitable tax relief they receive.

Why offer them five years to get their act together? The implications of the legislation and accompanying guidance have been clear for some time. Schools could have taken decisive action over the past two years to make sure their education and facilities offered some benefit to disadvantaged people. They seem to have spent the time bemoaning what is being required of them rather than getting on with it. If the £100m was important to them, you would have thought they would have done what was required to pass the test.

The extended timetable - not to mention the fact that two out of the first five private schools assessed by the commission failed the public benefit test - has thrown the whole purpose of charitable tax breaks into stark relief.

Charity law exists as a guide to the regulation of the charity sector. The sector encompasses a whole range of charitable purposes - the foremost of which remains tackling poverty in our communities. Enabling pupils from poor communities to experience high-quality education (assuming, of course, that this is what you get from the nation's private schools) would count as a charitable purpose and thus qualify such schools for tax relief.

It should be easy. So why do some such schools still seem to be resisting the public benefit test?

For me, all this highlights the issue of identifying which organisations can or should be charities. For example, many commercial companies offer discounts to charities for their products or services. They may well cut 10 or 15 per cent off their prices, or offer other beneficial deals. But some charities are huge and have considerable resources - many of them, such as Arts Council England, have substantial public funding as well. They are often are larger in size and income than many medium-sized businesses in the private sector, which might feel pressured into offering such discounts.

If we want charities to grow and play a major role in service delivery and public provision, we should be happy for them to compete with others on a level playing field - and that could mean no special treatment. Just a thought.

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