Charities commission withdraws guidance on public benefit and fee charging

The Charity Commission has now withdrawn parts of its guidance on public benefit, fee-charging and the advancement of education.

This follows the ruling made by the Upper Tribunal that parts of the Commission’s guidance were ‘wrong’ and ‘obscure’.  The judgment did not, however, provide any detailed rules as to how charities, and private schools in particular, could meet their obligation to provide public benefit.

The key points arising from the Tribunal’s decision are that:

• the assertion that private schools are charitable simply by providing educational services is wrong;
• governors of private schools which charge high fees are required to take into account the whole of the class of beneficiaries for which the charity is set up to provide. Accordingly, they have a duty to make provision for the poor.  That provision must be more than minimal or tokenistic and must be related to their charity’s aims;
• the governors, rather than the Charity Commission, must decide how best to run their school and deliver their legal obligation to provide public benefit – in good faith, within reasonable parameters and on a case by case basis;
• bursaries are not always the best or only way to meet the obligation to provide public benefit; and
• governors could be challenged for doing nothing or for excessive “gold-plating”, but any such challenge would be to the governors’ policy rather than the school’s charitable status.

The Commission has issued interim advice for charity trustees.  It has also established a working party to review its guidance and aims to produce draft guidance by the end of March 2012, which will then be the subject of public consultation.

For more information, help and advice please contact Chris Hook on 0191 211 7929 or email [email protected].