08/10/09

By Andrew Holt

Charities, including independent charitable schools, could have up to five years to make any necessary changes if they are not currently meeting the public benefit requirement which now applies to all charities, the chair of the Charity Commission Dame Suzi Leather has affirmed to schools.

Following the Charities Act 2006, charities that advance religion, education and relieve or prevent poverty are no longer automatically charitable in law, but are required to show the public benefit they provide, in line with all other charities.

This includes independent charitable schools.

The majority of twelve charities recently assessed by the Charity Commission were found to already be meeting the public benefit requirement.

The charities that were not currently meeting the requirement were given three months to consider the assessments and respond, and a further nine months to provide the Commission with a plan saying what they intended to do, and sufficient time to implement it.

On how long a charity which was not currently meeting the requirement might have to make any changes, Dame Suzi said: "While we are certainly looking for a demonstrable commitment, year on year, to satisfying the public benefit requirement, where we judge that a charity needs an extended period of time to make the necessary changes, we will be prepared to give that charity time.

"We would not normally expect that period to be longer than five years. We recognise developing partnership activities or building up a bursaries fund will take time. We also recognise that in the current economic climate it is more difficult. We know you can't pull a rabbit out of the hat."

Speaking at the Headmasters and Headmistresses Conference, Dame Suzi said that the Commission did not "inhabit a parallel universe or stand aloof from the realities of running an organisation".

She added; "We understand not all charitable independent schools have large endowments. That many parents find it difficult to pay the fees. That it's not always easy to bridge the divide between the educational sectors and build relationships with neighbouring schools. These issues are not academic, if you'll excuse the pun, and we recognise what many of you are up against."

Dame Suzi Leather also addressed questions that have been raised about the Charity Commission's interpretation of the law and explained that the legal basis for its guidance and approach was very clear.

"The (Charities) Act preserves the current case law, and our guidance is based on it. The law is not static, and we have had to consider how the legal authorities, many of which were decided in a different social climate, should be interpreted in a modern context. We have set out our legal reasoning clearly and carefully alongside our guidance. We have seen no legal argument to the contrary that causes us to change our analysis."

She added: "There is no doubt that, in due course, the law in this area will be reviewed and clarified by the Tribunal and the Courts. We accept and welcome this as part of the process of the rational development of the law. Unless and until this happens, and our legal interpretation is overturned, then we are all working with the public benefit reporting requirement and our guidance with regard to the operation of the principles as they stand."

Dame Suzi also addressed the issue of how frequently charities, including independent schools, might expect to be assessed by the Commission.

"For all but the handful of charities which feature in our ongoing assessment programme, the answer is never. It is not principally by individual assessments that we, or the public, will know about the depth and breadth of public benefit being delivered by these thousands of charities - but by what these charities tell us in their Trustee Annual Reports."

The chair rebutted claims that the Commission has not been acting independently in its approach to public benefit.

"There are some who seem determined to believe that the Charity Commission is politically motivated. This is, as we have repeatedly said, untrue. The Commission, let me remind you, is independent of Ministers and accountable not to the Government of the day but to Parliament, and through Parliament, to the wider public.

"Our motivation comes straight from one of the statutory objectives we are charged by Parliament to deliver - to promote awareness and understanding of the operation of the public benefit requirement. We are the regulator and under the Charities Act this is our responsibility."

She ended by telling schools that she expected that the public benefit requirement would "show how with no fanfare so many of you have quietly, long before the new Act, been getting on with the business of widening access to the life-changing opportunities that education at your school brings. They are your achievements. You, I am sure, will far exceed our expectations."