Public Benefit – An Update

Since Dame Suzi Leather (the head of the Charity Commission) was reported in The Times as saying that public benefit would be tightened year on year for independent schools, you will probably have read Jonathan Shephard’s report of his conversation with her.  Dame Suzi clarified that the test will not be ratcheted up each year.  Rather, schools will be given a number of years to make appropriate changes so that they can pass the test.

The Commission is still analysing responses to the consultation and re-drafting the guidance accordingly.  It should be published “by the end of the year”.   The sub-sectoral consultations (which will address fee-charging charities and educational charities) are apparently being drafted, but there is no fixed timetable for publication.

In our view, the Commission’s comments on the third principle in the main public benefit consultation (ie that people on low incomes must be able to benefit) went further than the case law.  The Commission can only widen this principle (and only in relation to given charitable purposes – not in relation to charities generally) if it reasonably considers that social conditions have changed so much since the time those cases were decided that it is now appropriate to expect charities furthering those purposes to provide greater (or different) benefits.  Farrer & Co submitted this view in its detailed response to the consultation.

When the re-drafted public benefit guidance emerges, it will be interesting to see if the Commission has revised its view of principle three.

Public Benefit in Scotland

OSCR, the Scottish charity regulator, has concluded its pilot review of charities and public benefit and produced a report on it.  One charity covered was the High School of Dundee, a fee-charging independent school.  Although it must be remembered that Scottish law on public benefit is not the same as that of England and Wales, there is a degree of overlap and the report makes interesting reading.

Although OSCR found that the school did provide public benefit, it emphasised that each school would be judged on its own merits and that this case should not be treated as indicating that all independent schools would pass the test.

The school’s fees ranged from £5,841 to £8,304 per year.  OSCR considered that this was not unduly restrictive and that the school increased its level of public benefit by:

·           Offering bursaries: the availability of bursaries was widely advertised and about 13% of all pupils received some sort of financial assistance (either from the school or another source).

·           Opening its facilities to the local community.

·           Contributing to teacher development, by taking on probationary teachers.

OSCR also found that selecting pupils by academic ability was acceptable.

Towards the end of the report, OSCR describes how it determines whether conditions limiting access to a charity’s benefits are unduly restrictive.  Fee-charging is covered as a special topic.  OSCR asks the following type of question:

·           Are the fees proportionate to the cost of providing the benefits?  OSCR considers both benefits for which fees are charged and those which the charity provides for free;

·           Are the arrangements for financial help clear (eg as to what levels of support are available, eligibility etc) and well-publicised?  Where support can be obtained from sources other than the charity itself, charities should aim to give this information to prospective beneficiaries.

To find out what the English approach might be, we will probably have to wait for the Charity Commission to produce its consultation on public benefit and fee-charging charities.  In our view, offering bursaries will not always be the most efficient way for a school to widen its public benefit and we have made this point to the Charity Commission.  Still, it is unlikely to harm independent schools to consider OSCR’s approach when reviewing their own positions.

Academies & Independent Schools: Prospectus

On 2 October, Lord Adonis launched a prospectus designed to encourage independent schools to involve themselves with the Government’s Academy programme.  This followed a change to the rules for sponsoring Academies, which now exempt ‘high performing education institutions’ from the usual £2 million sponsorship requirement.  The prospectus recognises the difficulty schools would face if asked to divert substantial funds towards Academies, given their obligations to fee-paying parents.

The prospectus describes a range of ways in which independent schools can get involved with Academies, and case studies are included.

Undoubtedly, appropriate involvement with an Academy could have a positive bearing on a school’s public benefit profile.  As ever, careful consideration will need to be given to the arrangement, in light of the constitutional objects and powers of a sponsor school.  In addition, the architecture of any link needs to maximise the effectiveness of the arrangement – not least on a public benefit footing – whilst maintaining appropriate protection and control for the sponsor school.  

Corporate Manslaughter and Corporate Homicide Act 2007

As the name suggests, this Act – passed in July – creates a new statutory offence of corporate manslaughter.  It replaces the common law offence, which had proved unworkable in the case of large organisations.  The offence is committed if an organisation’s activities are managed or organised in such a way that (a) they cause someone’s death and (b) they amount to a gross breach of the duty owed by the organisation to the deceased.  A gross breach of duty is defined as a standard falling well below what would be expected.

To be guilty, the way in which the organisation’s activities were managed or organised by its senior management must be a significant element in that breach of duty.  The Act defines “senior management” as people making decisions about how activities are to be organised as well as those who are responsible for managing at least a substantial part of the activities.

If found guilty, the court can impose an unlimited fine.  It can also order the organisation to rectify its failings or to publicise details of the prosecution.  It goes without saying that this latter measure would have a detrimental impact on the organisation and, quite conceivably, a loss of business.

Only “corporations” can be found guilty, so although the Act will apply to schools constituted as companies and Royal Charter bodies, it will not apply to unincorporated schools.  (The Act is not clear as to whether the offence could be committed by the corporate trustee of a school established as a trust, though there seems no reason why it could not.)  At first glance, this may seem like a reason to avoid incorporation.  However, in our experience, the absence of a corporate entity in this sort of situation can lead to individual trustees being prosecuted, for example under health and safety legislation, for want of any other legal 'person' to charge.  So although incorporation is not a liability panacea, trustees of corporate bodies enjoy greater protection from personal liability and those schools that have not incorporated might want to consider doing so.

The Act specifies the circumstances in which an organisation owes a duty of care.  If your school is caught by the Act, you owe both pupils and staff a duty of care, in the way you organise activities and in ensuring that your premises are safe.  So far as the safety of your premises is concerned, you also owe a duty to visitors to your school.

In practical terms, the Act does not require schools to which it applies to do anything more than establish good safety protocols, both for on‑site activities and – so far as they are under the school’s control – on field trips and school-arranged holidays.  Other laws, such as health and safety legislation, already require schools to make these arrangements.  What the Act mainly does is make it easier to prosecute by broadening the old common law offence and by allowing a jury to look at an organisation’s health and safety culture when determining whether it has committed a gross breach of duty in relation to the deceased. 

The Act does not replace health and safety obligations; it will be possible to prosecute an organisation for corporate manslaughter and for health and safety offences at the same time.

The Act comes into force in April next year.

The Education (Listed Bodies) (England)

Order 2007

This repeals earlier orders and lists the bodies recognised as providing courses in preparation for a degree and bodies preparing for foundation degrees.

Education (School Performance Indication) (England) Regulations 2007

These replace earlier regulations on the information schools must give to the Secretary of State.  Little has changed.  Independent schools will only have to provide data about the school or about pupils in the 15 – 18 age bracket if the Secretary of State requests it.

Becta Guidance on Biometric Technologies in Schools

Becta has produced this guidance in conjunction with the Information Commissioner.  Its aim is to help schools understand what biometric technology is, outline examples of possible uses in schools and offer guidance on relevant legal and other issues

Briefly, schools may use unique physical traits of pupils - such as fingerprints - in aspects of school life.  The guidance gives examples of practical uses, listing possible benefits as (a) speeding up processes and (b) potentially reducing bullying by limiting the amount of cash pupils carry (if, say, used at lunchtimes to identify pupils and deduct the price of their meal from a pre-paid account) and making it impossible for pupils to impersonate others, eg by indicating class attendance on their behalf.

Biometric data is personal data, so the main legal issue is data protection.  The guidance is drafted to help you determine why you want to use this data and to design strategies that will comply with data protection law, by ensuring that you use the data fairly, in a way that is proportionate to meeting your stated goal.

The best way to ensure that processing is fair is to get consent, both from parents and pupils themselves, unless the pupils are too young to give consent.  The guidance goes into some detail on this.  What it does not mention is that using biometric data can be quite controversial.  As charity trustees, Governors must consider whether using it will be in the school’s best interests, both in terms of cost and relations with the school community.

The guidance is available here.

Updated Guidance on Exclusion

In September, the DCSF published Improving Behaviour and Attendance, which updates earlier guidance on exclusion and pupil referral units.  The guidance does not apply to independent schools, but outlines good practice and so may be worth looking at.  It can be downloaded here. We have wide experience of advising independent schools on exclusions, so please get in touch if you have any issues at your school.

New Guidance on Bullying in Schools

The DCSF has published new guidance on bullying in schools, to replace the Don’t Suffer in Silence guidance.  The law required independent schools to consider this guidance when formulating their own anti-bullying policies, so we advise you to look at this new guidance and review your policies accordingly. 

The guidance is in three documents: the first deals with bullying generally; the other two deal specifically with cyber-bullying and homophobic bullying.  They set out the legal issues and offer guidance on establishing and implementing anti-bullying policies.  There is a strong emphasis on involving the whole school community – staff, pupils, parents and, possibly, outside agencies – in creating policies and in implementing them. The documents also have useful annexes (such as specimen letters to parents, checklists, and guidance on how to address bullying issues with different age groups).

All three documents are available here. You may also want to look at our briefing on cyber-bullying, which is in the schools section of our website, www.farrer.co.uk. 

R –v‑ James Porter t/a Hillgrove School

In this case, the headmaster of a private school was found guilty of breaching health and safety laws after a three-year-old child died jumping from some steps in the playground.  He was fined £20,000.  We are in the process of obtaining a transcript of the judgment.  However, from media reports, it appears that two significant factors in the case were that (a) only one teacher was supervising 59 pupils in the playground and (b) the steps where the incident occurred were in a part of the playground that was out of bounds to children but which was not gated off from the rest of the premises.

The main points to take away from this case are that you need adequate supervision at break times and that you should put age-appropriate measures in place to mitigate risks inherent in your premises.

For further information about any of these topics, please speak to David Smellie or your usual contact at the firm on 020 7242 2022.

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

© Farrer & Co, Autumn 2007