House of Commons Library

Charitable status and independent schools

Published Tuesday, September 19, 2017

This Commons Library briefing paper deals with the charitable status of independent schools, including the public benefit requirement, together with recent developments in this area

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This note deals with the law in England and Wales except where specifically stated.

Definition of charity

The Charities Act 2011 (a consolidation act) defines a charity as an institution which is established for a charitable purpose and provides benefit to the public.  The advancement of education is a charitable purpose and so independent schools are capable of being charities.  There is no longer a presumption that any type of charity is for the public benefit.  Educational charities, like all other charities, must demonstrate that they are for the public benefit.  There is no statutory definition of what this means. 

Tax concessions

Charities are able to take advantage of various tax concessions. The Government has stated that no estimate has been made of the savings which might accrue from changing the tax status of charitable independent schools.

Public benefit guidance

The Charity Commission is required by statute to issue guidance to promote awareness and understanding of the operation of the public benefit requirement. In 2008, it published guidance, including guidance on public benefit and fee charging, in which the Commission set out issues to be considered by charities charging high fees that many people could not afford.  The guidance stated that offering free or subsidised access was an obvious and, in many cases, the simplest way in which charities could provide opportunities to benefit for people who could not afford the fees; it also stated that this was not a requirement.

Legal challenges to public benefit guidance

The Independent Schools Council was granted permission by the High Court to bring a judicial review of the Charity Commission’s public benefit guidance. This was heard by the Upper Tribunal at the same time as a reference by the Attorney General asking the Tribunal to consider how the public benefit requirement should operate in relation to fee‑charging charitable schools.  The Upper Tribunal’s decision, published in October 2011, concluded that, in all cases, there must be more than minimal or token benefit for the poor, but that trustees of a charitable independent school should decide what was appropriate in their particular circumstances.  Benefits could be provided in a variety of ways. 

Revised guidance

The Charity Commission published revised public benefit guidance in September 2013. The Charity Commission has also provided some specific examples of ways in which charitable educational establishments, such as charitable independent schools, might make provision for the poor to benefit.

Some other Charity Commission publications have been revised to take into account concerns raised in debate in both Houses of Parliament on the Bill which is now the Charities (Protection and Social Investment) Act 2016.

Government consultation

In September 2016, the Government launched a consultation paper, Schools that work for everyone.   Among other things, this included proposals relating to independent schools.

The Government considered that independent schools could do more to benefit children from a wider variety of backgrounds as a condition of enjoying the benefits of charitable status. It proposed that independent schools with capacity and capability would be expected to sponsor academies, set up a new free school, or offer more fully funded bursaries.  There would be different expectations for smaller independent schools which lacked the capacity and capability to take on full sponsorship.

The consultation paper stated that the Government would consider legislation to remove the benefits of charitable status from schools which did not meet new benchmarks.

The consultation closed in December 2016. The Government has not yet published its response.  However, in June 2017, Justine Greening, Secretary of State for Education, indicated that the Government intends to continue to work with the ISC to agree how to take forward the proposals for more independent schools to support state schools.

New System Partnership Unit

In September 2017, Sir David Carter, National Schools Commissioner, spoke about the Department for Education’s newly formed System Partnership Unit that is working to support the independent schools sector to broker partnerships and relationships with the state sector.

Angela Rayner, Labour’s Education spokesperson, and Layla Moran for the Liberal Democrats, were reported to have criticised the seemingly voluntary basis of the new arrangements.

The position in Scotland

Charity law and regulation is devolved. An Office of the Scottish Charity Regulator (OSCR) briefing paper expresses the view that fundamental differences between the law in England and Wales, and that in Scotland, mean that the main principles underlying the Upper Tribunal decision have little application in Scotland.

In December 2014, OSCR published a report on its review of the charitable status of 52 fee-charging schools following a two-year assessment of individual schools.


In October 2014, a petition called on the Scottish Parliament to urge the Scottish Government to remove charitable status, and thus taxpayer support, from private, fee‑paying schools. The petition was closed in September 2015. This was on the basis that that the Committee had taken the petition as far as it could, and that the Scottish Government had made it clear that it had no plans substantially to review the 2005 Act.

Following a review of the non-domestic rates system, the Scottish Government stated that it would give further consideration to the recommendation that fee-paying schools should lose their entitlement to a rates reduction, before deciding how to proceed.




Commons Briefing papers SN05222

Author: Catherine Fairbairn

Topics: Charities, Schools

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