Schools threatened with loss of tax-free status

Refusal to share facilities with people in their neighbourhood could lead to independent schools being stripped of their assets and their tax-free charitable status, the Charity Commission said yesterday.

At a seminar of independent school staff in London, Kenneth Dibble, director of legal services of the commission, warned that "very exclusive" schools with "very high fees" and "no engagement with the wider community" could face "serious consequences".

The commission's most recent guidance on "public character" said charities should charge "reasonable" fees and ensure they were not set at a level that excluded a substantial proportion of the public. Charities should also ensure there was "sufficient general benefit" to the community.

Mr Dibble admitted that some poorer and geographically remote independent schools would struggle to meet the criteria but said the new system would "rest on a whole matrix of factors including the particular circumstances of the charity".

The commission was in talks with the Home Office, he added, but would not confirm when the draft Bill on charity reform was due to be published.

Independent schools have warned that many small schools could be forced to close under the new rules. Dick Davison, a spokesman for the Independent Schools Council, which represents 1,280 schools, said: "This would be a very extreme scenario and we have no evidence that any school would face this situation. However, it is an extreme situation that would have very grave results for a school. If a school was separated from its assets it would effectively be closed down.

"Although lots of schools are charities their situations differ enormously. We look forward to working constructively with the Charity Commission as they develop their framework."