Public benefit and schools

We hope that many of you were able to attend our session on public benefit and schools/Higher Education Institutions.  In that session, we looked at the implications, for independent schools, of the Charity Commission’s sub-sectoral consultations on the advancement of education and fee-charging.

We strongly encourage you all to submit your own responses to the Commission’s consultations, to make sure that the voice of the independent schools sector is clearly heard.  Below are some of the points we think you might want to mention:

·                     The sheer volume of paperwork that comprises the draft statutory guidance is daunting and raises questions as to whether and how charity trustees can properly absorb it in order to be able to have regard to it, as the new Act requires them to do.

·                     There is, in our view, a lack of clarity as to what the law requires and what the Commission views as good practice.  Much of what is recommended in the draft guidance should be regarded as aspirational (at best) rather than mandatory.  We take the view that the Commission should be clear and transparent as to what the law actually demands of charities; and that the guidance documents could be improved with this in mind.

·                     We believe that a school’s purposes should be construed reasonably broadly and that the place a school occupies within its community should inform an understanding of what a school is established to do.  Obviously education is at the core of any school’s purposes.  However, we believe that the Commission’s interpretation of schools’ purposes is too narrow and in part unclear.

·                     There is no legal basis for the suggestion that a fee-charging charity should make its services available to all those who cannot afford the fees.  The law states that the services should be available to a sufficient section of the public and that people in poverty should not be excluded from benefit.

·                     Similarly, it is not clear on what basis the Commission asserts that a charity which charges high fees needs to do more to demonstrate public benefit than a charity that charges lower fees.

·                     The Commission may wish to rethink some of the financial assumptions that inform parts of the fee-charging guidance.  For example, the suggestion that a charity may seek to surcharge fee-payers to fund access to those who cannot afford the fees is financially illogical.

·                     We question whether the distinction drawn between direct and indirect benefits is as clear as the Commission suggests.  A benefit provided in furtherance of a charity’s objects is a legitimate benefit.  Whether it is provided in return for fees is not the primary issue.

·                     We imagine there will be many ways in which a fee-charging school might engage with the broader community.  The list given by the Commission is somewhat narrow in scope.

·                     Some of the Commission’s questions appear to be seeking to gauge public opinion.  Such questions should be answered with some caution, given that the guidance is intended to explain the legal requirements.

·                     Finally, schools may wish to stress (again): (a) that public benefit is about opportunity and not take-up; (b) that the independent schools sector is characterised by variety and therefore what works for one may not work for another; (c) that proportionality is a legitimate factor in assessing public benefit; and (d) that educating pupils is itself of benefit to the public.

Responses to the consultations on Education and Fee-charging should be submitted no later than 11 July 2008.

Education and Skills Bill

At the time of writing, this has finished its passage through the House of Commons and received First Reading in the House of Lords.

Although the Government introduced some amendments toward the end of the proceedings in the Commons, none related to independent schools.  The main changes dealt with admissions policies for maintained schools.

Special Educational Needs (Information) Bill

This is a private member’s Bill that has been passing through Parliament with cross-party support.  It is reasonable to suppose that it will become law.

It obliges the Secretary of State to exercise his information-gathering powers to collect information that would be likely to help improve the well-being of children in England with special educational needs.  It also obliges the Secretary of State to publish such information, where publication is likely to help improve their well-being.

The Secretary of State has powers to collect information from independent schools, so this Bill may, in due course, affect your school.  According to the Regulatory Impact Assessment, the costs impact of the Bill is minor and will fall on the public sector. 

Birkdale School, Sheffield  -v- Revenue and Customs Commissioners

Birkdale School is an independent school in Sheffield.  It ran a scheme whereby parents had the right to have a proportionate amount of fees repaid to them if their child was unable to attend the school for a certain period of time.  The 'price' for this right was an increased fee.

HMRC (and, subsequently, the VAT Tribunal) held that the right to a proportionate refund constituted a taxable supply for VAT purposes, separate from the exempt supply of educational services.  On appeal, the High Court overturned this decision and found that there was just one exempt supply.

This finding may come as a relief to other schools that run a similar scheme, or are thinking of running one.

HMRC -v- Principal and Fellows of Newnham College in the University of Cambridge

This case concerned a VAT scheme created by the college.  The college wanted to renovate its library.  It created a subsidiary company and leased the library to the company, having opted to tax the letting.  The college then claimed the input tax it had spent on the renovations.  HMRC held that the lease remained exempt and so the college could not reclaim the input tax.  The case turned on whether the college was in "occupation" of the library for the purposes of the VAT legislation.

Having let the library to the company, the college had entered into a series of agreements with the company, under which the college seconded staff to the company to run the library and the company allowed the college’s staff and students to access the library books.

The House of Lords found that the college was not in occupation of the library: the option to tax the lease was valid and so the college could reclaim input tax on the renovations.

Unfortunately, this case was very limited in scope and did not consider whether the arrangement fell foul of anti-avoidance provisions generally.  So although it may be interesting to schools looking to set up tax-efficient ways of developing their facilities, they should not draw too much comfort from this case and should obtain specialist tax advice.

Governing Body of X School -v- SP and SENDIST

In this case, the applicant was a 13-year-old with ADHD, who claimed that X School (in the maintained sector) had discriminated against her by imposing a series of fixed term exclusions upon her.  One exclusion had lasted 16 days.  Having reviewed evidence from the claimant’s paediatric specialist and looked at the school’s behaviour and educational support plans for the applicant, SENDIST agreed that the school had discriminated against the applicant, contrary to the requirements of the Disability Discrimination Act 1995.

The school appealed to the High Court.  The appeal was dismissed: the Court agreed with SENDIST.

There were two issues.  The first was whether the school had, for a reason related to her disability, treated the applicant less favourably than it would have treated someone without her disability.  If it had, was that less favourable treatment justified?

Secondly, had the school taken reasonable steps to ensure that the applicant was not placed at a substantial disadvantage in comparison to non-disabled pupils?

The court found that the applicant’s behaviour (described as "extreme" in some instances) was "related to" her ADHD.  However, the difficulty with these cases is that, when asking whether the ADHD sufferer was treated less favourably, the Court does not compare her with a badly-behaved person without ADHD, because the bad behaviour itself springs from the ADHD.  The correct comparator is someone who does not have ADHD and so does not display ADHD-related bad behaviour.  Obviously, the ill-behaved ADHD sufferer is going to be treated less favourably than her comparator, which means that the school will have to show that the different behaviour was justified.

On this point, the court found that the school had not taken reasonable steps to implement a strategy for making sure the applicant was not placed at a "substantial disadvantage".  It had not asked for guidance from the applicant’s specialist or systematically used strategies to help her.

Since the school had not taken such reasonable steps, its discriminatory treatment could not be justified.   The court added that even if the school had taken those steps, the 16 day exclusion would not have been justified.

There is a salutary lesson for schools here.  The threshold for determining that bad behaviour is "related to" a disorder such as ADHD seems low.  If you have disruptive pupils who have this kind of diagnosis, it will be prudent to approach disciplinary matters with anti-discrimination in mind.  The case also illustrates that, even if you have taken reasonable steps to support the pupil, you will need to ensure that any sanctions you impose are justifiable. 

Working Together

The DCSF has published new guidance on the participation of children and young people in decision-making in (among other places) schools.  In effect, it is an updated version of earlier guidance, produced in 2004.

Schools in the maintained sector are obliged by law to have regard to this guidance.  Although independent schools do not have this obligation, you should nevertheless consider following it as a matter of good practice.

The guidance is split into five sections.  The first section explains what is meant by participation.  Briefly, it means adults working with children and young people to ensure that young people’s views are taken into account in matters that affect them.  The guidance lists the potential benefits of promoting participation, including anecdotal examples from schools of how they have improved as a result of involving their pupils in decision-making.

The document recommends that schools:

·                     make clear their commitment to participation, at the Head/Governor level;

·                     support participation by providing training to adults, putting support structures in place and offering a mechanism for feedback on how the participation programme is working;

·                     give all young people an opportunity to be involved and not exclude any groups (for example, on the grounds of age or ability);

·                     review their participation arrangements regularly.  Are they achieving what was intended?

Finally, the guidance offers examples of participation programmes, such as school councils, having pupils as associate governors, instituting peer mentoring or mediation etc.

The guidance is available here.

Bullying involving children with special educational needs and disabilities

The DCSF has produced new guidance on this subject, available here. This follows the same pattern as other anti-bullying guidance: it explains how to prevent, respond to and monitor bullying by and of children with SEN and disabilities.  It also considers the implications of disability discrimination law in this area.

A future Education and Skills Bill

The Government has released a draft legislative programme for the 2008-2009 Parliamentary session. The proposals include a Bill that would build on the Bill currently going through Parliament by:

·                     transferring responsibility for 16-18-year-olds' education and training to local authorities;

·                     creating a new non-departmental public body to perform certain functions on pre-19 education;

·                     strengthening the powers to regulate qualifications and transferring those powers from the Qualifications and Curriculum Authority to a new independent regulator;

·                     establishing a new agency to take over the QCA’s other functions;

·                     creating a statutory basis for the apprenticeship programme.

Proposed Heritage Protection Bill

Those of you who own heritage property may be interested to read our briefing on this proposed piece of legislation, which will overhaul the planning system for listed buildings and other heritage sites.  The briefing is on our website here.

R -v- James Porter t/a Hillgrove School

We reported on this case in our bulletin last autumn.  Mr Porter, the headmaster of a private school, was found to be in breach of health & safety legislation after a three-year-old child died jumping from some steps in the playground.  The Court of Appeal has quashed the conviction, with one of the judges saying that the child had been exposed to no more than the ordinary risks present in daily life.  The Court added that there was nothing that the school could reasonably have done to remove the risk of a child jumping and hurting himself.

Whilst schools will still have to be aware of – and manage – risks to pupils that exist on their premises,

this decision must be seen as reassurance that  schools are not expected to be able to foresee and forestall the possibility of any premises-related accident.

Harris -v- Perry

In this case, a woman (Mrs Perry) was found negligent when a boy (Harris) received a serious head injury while using a bouncy castle that she had hired for her children’s birthday party.  She had also hired a bungee run for the party.

The inflatable was set up on a piece of land to which the public had access, where Harris was playing football with his father and some other boys.  Harris went on the bouncy castle with a friend of his, after asking Mrs Perry for permission to use it.  Children of different ages and sizes were using the bouncy castle, including a considerably larger boy.  The larger boy did a somersault and struck Harris on the head. When this occurred, Mrs Perry was supervising the bungee run.

Although Mrs Perry claimed she did not give Harris permission to use the bouncy castle, the Court found it likely that she did.  Having established this, the Court then looked at the terms on which the inflatable was rented out to Mrs Perry.  The contract recommended that it be supervised at all times, that children should not be allowed to sit on the sides or climb it, and that children of different sizes should not be allowed to use it at the same time.  The Court also looked at other information produced by the hire company, which referred to similar matters and added that somersaults should not be permitted.

The Court found that Mrs Perry had not exercised adequate supervision of the bouncy castle and that, if she had, the accident would not have occurred.  It also held that Mrs Perry should not have allowed the older boy to use the inflatable at the same time as the younger, smaller children.

Interestingly, Mrs Perry tried to blame Harris’s father, claiming that he should have watched over his own son or not allowed him to use the castle.  The Court rejected this contention, finding that it was reasonable, in the circumstances, for the father to trust that the castle was safe and would be properly supervised.

Schools that hire this type of equipment for school fêtes should make sure they follow any safety recommendations in the hire contract, have someone supervise activity at all times and be willing to intervene to make sure it is not misused

This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.

For further information about any of these topics, please speak to David Smellie (Tel: 020 7917 7394/email: dcs@farrer.co.uk) or your usual contact at the firm on 020 7242 2022