Private schools expect to keep charitable status as regulator reveals ruling

PRIVATE schools in Scotland look set to retain their status as charities in a ruling to be published next month.

The Office of the Scottish Charity Regulator (OSCR) began an investigation into four schools in 2008 after claims that Hutchesons’ Grammar in Glasgow, Lomond School in Helensburgh, St Leonards in St Andrews and Merchiston Castle in Edinburgh did not “provide public benefit”, charged high fees and did not offer enough support to those who could not afford to pay.

The schools were urged to make changes or face losing their charitable status.

With the independent regulator expected to announce its decision next month, there is optimism within the independent schools sector that the four will retain their charitable status and the associated tax relief.

John Edward, director of the Scottish Council of Independent Schools (SCIS), said private schools had been working hard to improve access.

He said: “We always thought that the schools did a disproportionate amount in terms of widening access and representing the local community, and we expect that to be recognised.

“A lot of people see this as purely an issue of tax benefits, but for our schools it is about the reinforcement of their ethos, with many of them set up as charitable bodies several hundred years ago.

“It’s difficult for people outside the sector to see this, but the schools are already a lot more diverse than people think they are. You can’t have 32,000 pupils in a country the size of Scotland and not have people from a range of different backgrounds.”

According to SCIS, around £35 million has been given away by schools across Scotland this year in bursaries.

Alan Eccles, a charity specialist with law firm Maclay Murray & Spens, said he expected the regulator to find in favour of the four schools.

He said: “Given the interim update provided by OSCR in February 2010, which said it was happy with the direction of travel the schools were taking, unless something has gone off the rails we would guess OSCR will probably say things are OK, but that the schools must continue to demonstrate public benefits.

“I suspect the schools will probably retain their status. But that doesn’t mean the private schools sector as a whole passes the test, and the regulator may turn its attention to other schools.”

Legislation was introduced by the Scottish Parliament in 2006 to tighten up control of charities following scandals involving cancer charities. The new rules mean charities must show they have a charitable aim, such as providing education, but also that they have a wider public benefit.

In the case of independent schools, where the benefit is only provided to a section of the public, the charity must show it does not operate unduly restrictive practices, such as overly high fees.

At the time of the OSCR ruling in 2008, just two of the 583 pupils at Lomond School in Helensburgh received means-tested assistance, while at St Leonards, in St Andrews, less than 1 per cent of pupils received help.