Richard Garner: Not every school will pass charity test

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The battle over independent schools' charitable status has been four years in the making. The first indication that they would have to prove they were "of public benefit" was contained in legislation first floated in 2005 and passed by MPs the following year.

That removed the presumption that independent schools could be deemed to have a charitable purpose because they provided education. Instead, they had to pass a new "public benefit" test which – among other things – meant they had to prove they did not exclude the poor from benefiting from their services.

Just before the Act came into force, Dame Suzi Leather, who had spent much of her career in the consumer movement and had formerly chaired the Human Fertilisation and Embryology Authority, became head of the Charity Commission and was charged with implementing the radical change.

The legislation sent shock waves through the independent sector. Charitable status is said to be worth £100m, but it is not only the exemption on paying taxes that benefits the independents. Many of the schools that have charitable status owe their lands and buildings to the fact they are charities.

If they lost their status, the schools would be required to sell them on to another charity. At first, there was a softly-softly approach to implementing the legislation. The consultation process lasted more than two years and only today have the results of the first private assessments of independent schools been made public.

A sign of what was in store for the private education sector came in one of the first interviews Dame Suzi gave on taking office. "It's hard to see how opening a school playing field for one Sunday afternoon a year could in any way come close to justifying charitable status," she said. "So in a sense that's a no-brainer. But it's going to be a difficult and contested territory."

The Government left it to the Charity Commission, and Dame Suzi, to determine how the new legislation should be implemented. In the meantime, there has been an awareness in the private sector that they will have to take action to show they are taking in children from the most disadvantaged neighbourhoods. An example of this can be seen in this year's annual report from the Independent Schools Council. It reveals that schools forked out £207m in bursaries and awards to children from less well-off homes – a 25 per cent increase on the previous year. It is still dwarfed by the £699.5m these schools spend on new buildings.

The suspicion in the private sector is that it will be the prep schools that are less well-prepared to deal with the new regime. Secondary schools, some of whom are bruised from brushes with the Office of Fair Trading over fee-fixing allegations, have concentrated on preparing for the battle ahead.

There were soothing words from Dame Suzi yesterday. "The majority of charities we've assessed are already providing public benefit in a variety of ways," she said. However, for many in the private school sector, it will be a case of watching and waiting.