Independent Schools Council v Charity Commission [2012] Ch 214

The Independent Schools Council challenged Charity Commission guidance on public benefit for fee-charging schools. It argued that the guidance went beyond the law and interfered with trustees' decisions about how educational purposes should be pursued. The Attorney General also referred questions concerning independent schools and charity law to the tribunal. The dispute concerned whether education supplied mainly to fee-paying pupils could satisfy public benefit and what provision should be made for those unable to afford the fees. It required distinction between an institution's charitable purposes, its administration and the fiscal advantages Parliament attaches to charitable status.

What public-benefit provision must a fee-charging school make for people unable to pay, and how far may the Charity Commission prescribe the trustees' choices?

The Upper Tribunal held that education could provide public benefit, but fee-charging charities could not simply exclude the poor from meaningful benefit. Provision had to exceed a merely token or negligible level. Once the legal minimum was met, the form and extent of further provision were for trustees acting properly within their discretion, rather than a level imposed by the Commission as its preferred policy. The tribunal found parts of the guidance erroneous or unclear. It also distinguished charitable purposes from a failure in administration: improper operation does not necessarily mean that an institution's underlying purposes cease to be charitable. There was no universal bursary percentage or single compulsory method suitable for every school.

Fee-charging educational charities must provide more than token benefit for those unable to afford fees. Within the legal requirements, trustees determine the appropriate provision. Public-benefit analysis is contextual and does not impose one fixed bursary quota on all schools.

The case is useful for separating public benefit from political arguments about independent education. It also distinguishes lawful regulatory guidance from substituting a regulator's preferred choices for trustees' discretion. An exam answer should consider purposes, operation and access independently. Charitable status does not itself settle every tax or rating consequence, since Parliament can attach different fiscal rules. The decision must therefore be used for the charity-law issue it resolved, rather than as a guarantee of current tax exemptions.