Scottish schools threatened with end to charity status

Four of Scotland’s top private schools have been threatened with the loss of their charitable status if they fail to increase their spending on bursaries.

The four schools, which include Huthesons’ Grammar in Glasgow and Merchiston Castle in Edinburgh, have failed to meet the “public benefit test” needed for a charity. The Office of the Scottish Charitable Regulator (OSCR) stated that they have a year in which to put forward plans to expand bursaries to meet the test’s standards.

Jane Ryder, the regulator’s chief executive, said that they had failed “mainly due to significant fees and the fact that there was not sufficient help in place so that those who cannot pay the fees can also benefit from what the charity does.”

The schools which have been criticised—including Lomond school in Helensburgh, whose pupils comprise of many navy children from Faslane submarine base, and St Leonards in St Andrews—fear the financial impact of losing charitable status. The 50 Scottish independent schools registered as charities save approximately £4.5m a year in taxes because they do not have to pay business rates or VAT. The sector claims that losing charitable status could force up their fees by between five and eight per cent.

30 charities were examined and assessed by the OSCR on their adherence to the 2005 law stipulating that every charity must pass a public benefit test in order to justify its tax breaks. Gordonstoun, an institution favored by the royal family, was cleared and told its provision for students who cannot afford fees was adequate, along with five other schools that came under inspection.

The four schools that failed were shocked to hear the result and are still waiting for the Charity Commission to publish its final guidance. Dr Ken Greig, Hutchesons’ rector, posted a message on the school website to “reassure current and prospective parents that we have no intention to increase fees, as we recognize that the majority of parents make considerable sacrifices to send their children to Hutchesons.”

Merchiston, a boys’ school whose seniors pay £16,395 a year, have pointed to notable charitable projects, including mentoring at a local primary school, and scholarships for gifted pupils.

However, only 16 boys were found to have means-tested bursaries, with just four getting 100 per cent support. The OSCR said: “These arrangements were not currently on a scale sufficient to mitigate the exclusory impact of the fees.”