Why charity status of private schools should be reviewed

It’s been ten years since the Charity Act was introduced in Scotland and while it has been a largely successful piece of legislation there are areas which could do with some attention. One of the main reasons the Scottish Council for Voluntary Organisations is calling for a review is that we don’t agree that the charity test can be working if it allows some of the fee-paying schools to obtain charitable status. To be clear, this isn’t a campaign against private schools or the people who do undoubtedly benefit from them. This is a call for a review of the current system which allows some charities to restrict access to services through high fees which exclude the majority from benefitting. The Office of the Scottish Charity Regulator's report into 32 fee-paying schools found that the median amount of income these charities spent on means-tested bursaries was 6.1%. The median percentage of pupils receiving means tested bursaries was 10.2%. So, almost 90% of the pupils attending these schools have to pay to attend with day fees from £1,500 to £11,237 per year and boarding education ranged from £15,450 to £25,860.

Loss of charitable status might not mean the end for the bursaries and other community work at these schools

This means that access to the service provided by these charities is in 90% of cases restricted to those that are wealthy. For SCVO this is not charitable activity. The places these schools provide to those on low incomes and the provision of facilities for community use are to their credit, but as the figures above show, this is clearly not their main function or their reason for existing. Of course there are other charities in the sector that have high fees such as care homes or facilities for people with disabilities, but these fees are normally paid for by the local authority meaning places are allocated based on need rather than ability to pay. We’re not suggesting that all these schools should be immediately stripped of their charitable status and some are clearly doing better than others. However, we would like to see the bar set much higher for the "undue benefit" part of the charity test which assesses charges and fees and whether they restrict access to benefit. Where that level is set is up for debate and should always be a consideration of a variety of factors, but 10% of students receiving bursaries is not nearly enough. Loss of charitable status might not mean the end for the bursaries and other community work at these schools. It’s possible they could continue with similar governing documents and purposes and provide services as non-profits if they choose not to meet the requirements of a new charity test. The third sector is a broad collection of organisational types and its diversity is part of its strength. But charitable status is a part of the sector that needs to be protected, to ensure public trust and confidence. We’ve had 10 years of the Charity Act in Scotland so a review would be timely and a debate on fee-paying schools welcome.