Has OSCR misinterpreted the law?
Third Force News
The publication by OSCR of its first review of charities automatically entered on the Register of Scottish Charities under the 2005 Charities Act’s transition arrangements is an important stage in the development of Scotland’s new charity regime. It provides the first evidence of how OSCR will implement the charity test provided for in the new act.
To put it politely the results are mixed. The review looked at eight organisations selected because they each exemplified potentially problematic issues. The Eastriggs and Domock Children’s Gala Fund is a small organisation representative of the two thirds of Scottish charities, which have an annual income of less than £25,000. Pollokshaws Methodist Church stood for the large number of churches which are charities. Both are judged to satisfy the charity test in full. However Coalbum Miners Welfare Charitable’ Society is found to have outgrown its stated charitable objective by extending its activities from recreation and other leisure activities to ICT training and job access services. The Society is recommended to amend its charitable purposes and seek OSCR’s consent for a change within a year. The Voluntary Action Fund fails on the grounds that its constitution fails to define its charitable purposes by reference to the Scottish Charities Act citing instead tax law interpreted under English law. It too is recommended to submit an amended constitution.
The case of the John Wheatley College is found to raise a more problematic issue. While its activities and conditions of access meet the test its constitution fails by giving Scottish Ministers wide powers of control and direction under the 1992 Further Education Act. Recognising that the remedy is not within the control of the charity OSCR has notified Scottish Ministers of the conflict and given the College -and by implication other FE Colleges with charitable status – two years to regularise its position.
With similar judiciousness OSCR considers the cases of the University of Dundee and nine playgroups in membership of the Scottish Pre-School Play Association, all of whom are found to satisfy the test.
Then, with the High School of Dundee, OSCR goes haywire. The High School was chosen as a stand-in for charities which charge high fees. The report admits that it was the most complex and challenging of the pilots. Too complex and challenging apparently to maintain the common sense approach applied to the others.
The crux of the report’s consideration was whether access to the benefits provided by the school was ‘unduly restrictive’ under the terms of the Charities Act. The first possible restriction considered was the school’s selection on the basis of academic ability. OSCR fmds that academic selection is not ‘unduly restrictive’ in the light of the school’s charitable purposes even though those purposes are described simply as providing education rather than education for pupils of a particular ability level.
Even more baffling is the report’s consideration of fees, The High School charges fees ranging upwards from £5,841 per annum in the junior school to £8,304 in the senior school. The report offers two principal reasons for not considering these fees ‘unduly restrictive’ -the fact that 13 per cent of the pupils receive bursaries and the comparative cost of providing education. The bursary ratio of course means that 87 per cent of pupils have to pay the fees in full. Moreover the report’s own figures reveal that only five pupils receive bursaries covering l00per cent of the fees, in a city which is second only to Glasgow in its poverty levels and in which 22 percent of the population are in receipt of key social security benefits.
The comparative cost of education at the High School, which the report finds to be ‘not unreasonable’ in relation to state school expenditure, is a red herring. The issue is not how the High School’s costs compare with other forms of education but whether determining access mainly by the parents’ capacity to pay fees way beyond the capacity of the majority of Dundee’s population is ‘unduly restrictive’. That’s a no brainer,
The report is equally wall-eyed in its consideration of the possible public dis-benefit of the High School’s activities, blandly proclaiming that it can find no ‘strong evidence’ that independent selective schools have either a negative influence on state schools or are socially divisive. Where did it look?
In an Annex on its methodology for considering restrictive conditions the report comments that it cannot find any suggestion in the parliamentary record that the late addition to the bill of a reference to charges and fees in connection with ‘unduly restrictive’ access was intended to ‘give additional weight or importance to charges or fees’, When parliament reassembles that may be revealed as a misreading of the mood of parliament.