Charity status under threat for private schools

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Attorney General Dominic Grieve has made a formal challenge to the Charity Commission's controversial new rules, which deny independent schools charitable status if they do not provide bursaries for poorer pupils.

Independent schools want a judicial review of the Charity Commission's interpretation of the law because the "public benefit" they must prove is too narrowly defined, with too muich emphasis on bursaries.

Mr Grieve has asked the Charities Tribunal, which covers England and Wales, to clarify the law.

Schools say the rules, due to come fully into effect in 2015, would force them to put up fees for the middle classes.

Under the shake-up, brought in under Labour, private schools are no longer automatically entitled to call themselves charities. They must now show they benefit the public in order to retain their charitable status and associated tax perks.

Last year, the first two schools to face the new test failed – although they were later allowed to keep their charitable status after they agreed to fund free places for the poor.

Mr Grieve has referred the commission to the Charity Tribunal over the legality of its rulings. The tribunal will be asked to rule on what exactly independent fee-paying schools may need to offer for the public or local community to maintain their status as charities.

A spokesman for Mr Grieve said: ‘It is the intention of the Attorney General that the law that underpins the guidance is clarified.’

Charities Commission chairman Dame Suzi Leather announced a partial climbdown last October, saying that schools failing to meet the new charity rules would be given six years to comply.

A spokesman for the Charity Commission said: "We accept, like any public body, that the way in which we carry out our statutory responsibilities is subject to legal challenge.

"In preparing all our guidance on public benefit, the Commission was at all times diligent in consulting charities and others affected, and in making clear the process we had followed.

"We stand by our approach and the legal analysis which underpins it and we are confident the commission has acted reasonably."

The Independent Schools Council, which represents 1,260 schools, 980 of which are charities, educating some 424,000 children across the UK, argues that the Charity Commission is failing to take notice of some of the other ways they benefit local communities, such as links with state schools.

David Lyscom, chief executive of the ISC, said: "We have been saying all along that there are serious misgivings among charity lawyers, as well as charities themselves, about the commission’s approach.

"The entire sector continues to be at the whim of the commission’s prevailing and subjective view as to what public benefit means."

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