Public schools 'may have to shut'

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Private schools that are stripped of their charitable status will not be able to reopen as businesses, the charities watchdog has warned.

Like other charities, independent schools will soon have to meet a public benefit test to keep their tax breaks.

But those which fail to meet that test will not be allowed to simply give away their assets for non-charitable aims, the Charity Commission has said.

New draft guidance on fees charged by education charities has been drawn up.

The guidelines says fee-paying private schools which automatically had a right to call themselves charities must now pass a public benefit test.

Academies programme

This means their benefits must be available to everyone - even those that cannot afford their high fees.

Many argue that these charges mean they are effectively private clubs rather than a charitable institution.

The Charity Commission suggests that independent schools could offer a number of benefits to the wider community to keep their charitable status.

These might include allowing state school pupils to attend certain lessons or events or use their facilities such as swimming pools.

They might collaborate more closely with state schools including city academies - state-funded, independently-run schools usually in deprived areas, it says.

In its draft guidance, the commission says: "It is not an option for the trustees of an existing registered charity simply to decide that the organisation will no longer call itself a charity, ask to be removed from the register of charities and keep its charitable land, money and other assets."

Although a charity can wind up, if its governing documents permit, its assets - which may have been raised through donations - cannot simply be transferred to another non-charitable organisation, the commission warned.

A commission spokesman used as an example the outcry that would be caused by an animal wildlife charity which suddenly decided it was going to become an organisation run for private profit.

The role of the Charity Commission is to apply the law, not to create it Jonathan ShephardISC chief executive

"Some commentators have suggested that trustees of charitable independent schools that are unable to meet the public benefit requirement could sell their schools as a going concern to a commercial or private enterprise to be run as a non-charitable school," the guidance says.

It adds that although a sale of a school's land and buildings could take place, any assets would have to be held by the trustees of that charity and used for the same charitable aims.

The Independent Schools Council has criticised the new guidance.

Its chief executive Jonathan Shephard said: "The independent schools sector delivers enormous public benefit and ISC shares the commission's wish for this to continue and increase.

"However, the latest guidance has drifted so far from the law that it comes close to ignoring - or even attempting to reverse - some fundamental legal authorities.

"The role of the Charity Commission is to apply the law, not to create it. Charity trustees need guidance from their regulator that is free from inconsistency, sound in law and workable in practice.

"The commission's latest draft guidance falls short in each of these areas."