Tax threat could hit hundreds of public schools

£100m of benefit in jeopardy after dramatic Charity Commission ruling

Hundreds of independent schools will be forced to raise their fees to take in more pupils from poorer backgrounds, following a landmark ruling by the Charity Commission. Two of the first five schools investigated by the watchdog have been told they fail to meet tough new standards for retaining their charitable status – worth about £100m in tax breaks across the sector.

The leaders of Britain's 2,500 private schools fear the verdicts could be a foretaste of what is in store for all of them. Most independent schools, including Eton, Harrow and Winchester, have charitable status they say is vital for their survival.

The two schools singled out by the commissioners – St Anselm's in Bakewell, Derbyshire, and Highfield Priory in Preston, Lancashire – are ranked among the top 100 private preparatory schools. They have been given 12 months to start doing more to help disadvantaged children in their communities, or risk losing their charity status altogether.

A spokeswoman for the commission said: "All charity trustees are being required to ensure they carry out their charity's aims and for the public benefit." However, she said no decision had yet been taken about how it would proceed with future public benefit assessments.

David Lyscom, the head of the Independent Schools Council, an umbrella group representing 1,280 independent schools in the UK and Ireland, said the watchdog's ruling would inevitably lead to higher charges for most parents who paid full fees for their children to attend private schools.

He added: "We are deeply disappointed with the approach taken by the Charity Commission – which focuses on the amount of means-tested bursaries provided by each school.

"The implication of the commission's findings appears to be that many schools must aim to provide a significant but unspecified proportion of their turnover in full bursaries. This will inevitably lead to fee increases for the vast majority of parents, putting the benefits of an independent education beyond the reach of a greater number of children."

The Charity Commission's report on St Anselm's revealed that the 250-pupil school provided only two bursaries, up to the value of 90 per cent of fees. This cost £20,000, or 1 per cent of its total income. It also provided £30,800 in assistance to nine children of armed forces personnel through a Ministry of Defence grant, and scholarships offering a 10 per cent discount on fees to a further seven children. The report concluded that the school was "not currently operating for the public benefit".

Highfield Priory did not provide any bursaries, the commissioners found, concluding that it did "not ensure that people in poverty are not excluded from the opportunity to benefit". The school, however, insisted that it kept fees as low as it could – £5,975 a year – so that as wide a range of children as possible could benefit from its tuition. Simon Northcott, the headmaster of St Anselm's, said: "[The commissioners] haven't told us what they want us to achieve. We believe we can play ball with what they want but it obviously makes a difference whether they want us to go up to spending 2 per cent of our income or 6 or 7 per cent."

He said a recent fundraising drive to provide the school with more resources had not been as successful as was hoped because of the recession. The only other way to find extra money for bursaries would be to raise fees at a time when families were suffering from the downturn.

Today, the Charity Commission publishes a report setting out the key issues and offering information on how charitable organisations can meet its public-benefit test. Under a section on fee-charging, which affects private schools, it states that a charity which charges high fees that many people cannot afford must demonstrate that "there is sufficient opportunity for people who cannot afford these fees to benefit in a material way that is related to the charity's aims".

It sets out a number of ways that charities might fund fee assistance, including income from fees, from specific funds set aside for that purpose, using funds from a third party and setting fees at a "slightly higher" level in order to create a fund to assist those who cannot afford them.

But Mr Lyscom warned that small schools which had tight budgets could find themselves vulnerable in the future – a rise in fees might mean some parents could not afford to keep sending their child to the school.

He also condemned the commission for failing to specify how many bursaries a school needed to provide to meet the test. "The schools are being found guilty without knowing what innocent looks like," he added.

But Dame Suzi Leather, chairman of the Charity Commission, said: "The majority of the charities we have assessed are already providing public benefit in a variety of ways. The other charities are capable of doing so and remain registered but they must now agree with us in the next 12 months the changes that are needed."

In all, 12 charities acted as "guinea pigs" for the pilot inspections and eight passed the test. These included Manchester Grammar School, the only school to volunteer for the pilot.

The other two charities to fail were fee-paying residential care homes.

News
Ian Thorpe had Rio 2016 in his sights
people
Sport
world cup 2014LIVE BLOG: Hosts Brazil take on the Netherlands in third-place play-off
News
Tommy Ramone performing at The Old Waldorf Nightclub in 1978 in San Francisco, California.
peopleDrummer Tommy was last surviving member of seminal band
Life and Style
Swimsuit, £245, by Agent Provocateur
fashion

Diving in at the deep end is no excuse for shirking the style stakes

PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Life and Style
Several male celebrities have confessed to being on a diet, including, from left to right, Hugh Grant, Benedict Cumberbatch and Ryan Reynolds
life...and the weight loss industry is rubbing its hands in glee
Voices
Spectators photograph the Tour de France riders as they make their way through the Yorkshire countryside
voicesHoward Jacobson: Line the streets for a cycling race? You might just as well watch a swarm of wasps
Life and Style
lifeHere's one answer to an inquisitive Reddit user's question
Arts and Entertainment
'Eminem's recovery from substance abuse has made him a more potent performer, with physical charisma and energy he never had before'
arts + entsReview: Wembley Stadium ***
Sport
Joe Root and James Anderson celebrate their record-beaking partnership
cricketEngland's last-wicket stand against India rewrites the history books
News
peopleDave Legeno, the actor who played werewolf Fenrir Greyback in the Harry Potter films, has died
Independent
Travel Shop
the manor
Up to 70% off luxury travel
on city breaks Find out more
santorini
Up to 70% off luxury travel
on chic beach resorts Find out more
sardina foodie
Up to 70% off luxury travel
on country retreats Find out more
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Education

Linux Systems Administrator

£33000 per annum + pension, 25 days holiday: Ashdown Group: A highly successfu...

SEN Teacher, Permanent Role in Ashford

Competitive Salary: Randstad Education Group: Randstad urgently seeks a qualif...

Drama Teacher

Negotiable: Randstad Education Liverpool: We are looking for someone who can t...

**Science Teacher Urgently Required for September**

£120 - £160 per day: Randstad Education Liverpool: **Science Teacher Urgently ...

Day In a Page

A History of the First World War in 100 Moments: Peace without magnanimity - the summit in a railway siding that ended the fighting

A History of the First World War in 100 Moments

Peace without magnanimity - the summit in a railway siding that ended the fighting
Scottish independence: How the Commonwealth Games could swing the vote

Scottish independence: How the Commonwealth Games could swing the vote

In the final part of our series, Chris Green arrives in Glasgow - a host city struggling to keep the politics out of its celebration of sport
Out in the cold: A writer spends a night on the streets and hears the stories of the homeless

A writer spends a night on the streets

Rough sleepers - the homeless, the destitute and the drunk - exist in every city. Will Nicoll meets those whose luck has run out
Striking new stations, high-speed links and (whisper it) better services - the UK's railways are entering a new golden age

UK's railways are entering a new golden age

New stations are opening across the country and our railways appear to be entering an era not seen in Britain since the early 1950s
Conchita Wurst becomes a 'bride' on the Paris catwalk - and proves there is life after Eurovision

Conchita becomes a 'bride' on Paris catwalk

Alexander Fury salutes the Eurovision Song Contest winner's latest triumph
Pétanque World Championship in Marseilles hit by

Pétanque 'world cup' hit by death threats

This year's most acrimonious sporting event took place in France, not Brazil. How did pétanque get so passionate?
Whelks are healthy, versatile and sustainable - so why did we stop eating them in the UK?

Why did we stop eating whelks?

Whelks were the Victorian equivalent of the donor kebab and our stocks are abundant. So why do we now export them all to the Far East?
10 best women's sunglasses

In the shade: 10 best women's sunglasses

From luxury bespoke eyewear to fun festival sunnies, we round up the shades to be seen in this summer
Germany vs Argentina World Cup 2014: Lionel Messi? Javier Mascherano is key for Argentina...

World Cup final: Messi? Mascherano is key for Argentina...

No 10 is always centre of attention but Barça team-mate is just as crucial to finalists’ hopes
Siobhan-Marie O’Connor: Swimmer knows she needs Glasgow joy on road to Rio

Siobhan-Marie O’Connor: Swimmer needs Glasgow joy on road to Rio

18-year-old says this month’s Commonwealth Games are a key staging post in her career before time slips away
The true Gaza back-story that the Israelis aren’t telling this week

The true Gaza back-story that the Israelis aren’t telling this week

A future Palestine state will have no borders and be an enclave within Israel, surrounded on all sides by Israeli-held territory, says Robert Fisk
A History of the First World War in 100 Moments: The German people demand an end to the fighting

A History of the First World War in 100 Moments

The German people demand an end to the fighting
New play by Oscar Wilde's grandson reveals what the Irish wit said at his trials

New play reveals what Oscar Wilde said at trials

For a century, what Wilde actually said at his trials was a mystery. But the recent discovery of shorthand notes changed that. Now his grandson Merlin Holland has turned them into a play
Can scientists save the world's sea life from

Can scientists save our sea life?

By the end of the century, the only living things left in our oceans could be plankton and jellyfish. Alex Renton meets the scientists who are trying to turn the tide
Richard III, Trafalgar Studios, review: Martin Freeman gives highly intelligent performance

Richard III review

Martin Freeman’s psychotic monarch is big on mockery but wanting in malice