A hot topic in UK Education News this week is the Independent Schools Council (ISC) challenging the 2006 Charities Act at tribunal. But what’s the right decision? Should independent schools be allowed to run as charities or should they be forced to run as businesses?
Up until the 2006 Charities Act came into force, schools had an automatic right to claim charitable status as they were fulfilling the aim of ‘advancing education’ – one of thirteen charitable aims. This had been the situation for many years and Independent Schools ran as charities claiming significant tax benefits until the 2006 Charities Act came along.
In summary, section 2 of the Charities Act 2006 stated that any activity or institution can only be classed as a charity it if is of public benefit. This means that in order to remain charities, independent schools must demonstrate the benefits they offer to the wider public, beyond their own fee-paying pupils. And whether or not independent schools pass this test has been a hotly contested topic for some time.
It’s a pretty key issue for independent schools, as charitable status saves them, collectively, in the region of £100million in tax relief each year. Not a small amount of cash in these austere times. Forcing independent schools to become businesses and lose this tax relief will increase fees, reduce bursaries and penalise those middle-income families who are already stretching themselves financially in order to meet the fees required to send their children to independent schools the ISC argues.
The Independent Schools Council also argue that the Charities Commission is placing too much emphasis on the need to provide bursaries in order to widen access and that those schools who do not offer significant bursaries should be able to pass the ‘public benefit test’ by sharing facilities or developing partnerships with local state schools.
The Charities Tribunal is expected to last more than a week. Its outcome will be crucial to the future of many Independent Schools in the UK.
So what do you think? Should independent schools be allowed to run as charities or should they be made to run as businesses? I’d love you to share your thoughts on this political hot potato!