DCH 156 Bedford Charity (The Harpur Trust)
DRAFT CHARITIES BILL - EVIDENCE BY
THE BEDFORD CHARITY
(THE HARPUR TRUST)
Independent Schools - Charitable Status
Introduction
1. This evidence is forwarded to inform the Pre-Legislative
Scrutiny of the draft Charities Bill generally and specifically
on those factors that might be considered in applying the test
of Public Benefit to the work of independent schools. It is also
forwarded in response to the evidence put forward under DCH 27
- Eileen Brown of Buckfast Avenue, Bedford, dated 29 May.
2. The Bedford Charity (The Harpur Trust) is
a local, generalist grant-making foundation that also runs four
independent school and two almshouses. The Charity is governed
by a Scheme issued by the Charity Commissioners in September 2000
and the Trustees of the Charity (who include four members of elected
local authorities) administer the Charity in accordance with the
Scheme.
Financial Factors
3. The four schools of the Charity currently
educate 3,794 UK pupils using money provided by the parents of
the pupils who, of course, also pay UK taxes. It would cost the
state over £17M pa to provide maintained sector education
for these pupils if the schools did not exist[4].
The approximate benefit to the Charity of charitable status is
£1M pa which arises from the tax-free status of income from
the Charity's investments and the reduction in business rates
applied to its non-investment property. On these figures alone
it is clear that the public is benefiting financially considerably
from the activities of the schools.
4. The Charity currently uses about £1.6M
pa of income from its permanent endowment to provide means tested
bursaries to support the education at its schools of over 220
children of parents on lower incomes and to build a bursary fund
for the future.
Educational Factors
5. Ms Brown argues in her submission that by
paying teachers better salaries independent schools deprive the
maintained sector of their services. This is by no means necessarily
the case. Many of the teachers in the Charity's schools have
come from and return to the maintained sector, exercising their
right to seek employment where they wish and broadening their
professional experience. This flow of teachers between the two
sectors assists both to raise standards and develop the individuals
professionally. Nevertheless, the Charity would support more
state resources being made available for education.
6. Ms Brown also argues that foreign pupils are
subsidised by UK charitable activity. This is not the case; it
is, in fact, quite the opposite. Pupils from abroad come overwhelmingly
from affluent, developed countries and their parents seek education
in UK independent schools because they are renowned for their
academic standards. No subsidy is offered to such parents and
they are not eligible for fee support; in paying full fees they
assist in providing support to those pupils of parents who are
less well-off.
7. Ms Brown also argues that only a small proportion
of the Charity's income supports state education. "Promotion
of Education" is, in fact, only one of three charitable
objects of the Charity and similar sums are also spent in relief
of those in sickness, hardship or distress and in the provision
of recreational facilities with a social welfare purpose.
8. The Charity does support the local maintained
sector schools financially. Several grants have been made to
schools seeking specialist college status. To achieve this status
and thereby access additional state funds, each school is required
to raise £50,000 of non-public money. This task has proved
impossible for many schools, particularly those that serve wards
with high indices of multiple deprivation. The Charity has helped
by awarding grants of £25,000 to several local secondary
schools thus enabling them to overcome this financial hurdle and
to bid for specialist status. Over a period of five years this
will draw in an additional £1.5M of government money to these
schools and their partner middle and lower schools in the area.
Other grants are made for a variety of different purposes to
many local schools but the public benefit provided by the Charity
is not limited to financial factors.
9. The Charity's schools cooperate with maintained
schools and other bodies in several ways to the benefit of all
the pupils and the wider community. For example, one independent
school has entered into a very successful joint science programme
with a secondary school that has particularly challenging problems.
Another is developing an innovative partnership with the LEA,
Sheffield University and maintained schools in video-conferencing.
"Opening up" higher education to all sections of the
UK's socio-economic spectrum is an important part of the government's
educational agenda. Tapping into the universities' human resources
(lectures, seminars, Q&A sessions on a range of issues) by
schools can be done more effectively using modern video-conferencing
technology - the universities come directly into the schools,
avoiding transport and opportunity costs, and the use of the most
modern technology has the valuable sub-text of emphasising the
excitement of, and opportunities in, higher education. One of
the charity's schools, Bedford School, and Sheffield University,
in conjunction with Bedfordshire LEA, are piloting such a project.
Wider Factors
10. The Charity operates two almshouses providing
sheltered accommodation for 51 local, frail, elderly people and
it liaises with housing association partners on extra care schemes.
This fulfils a need in the community and it is hoped that it
will offer additional opportunities for pupils in the Charity's
schools to develop their sense of community and public service
through volunteering.
11. Currently, the grants programme provides
£500,000 pa in awards for various activities in pursuit of
the charitable aims outlined earlier. In addition, the Charity
makes occasional major awards; these have included grants of £485,000
to the new Child Development Centre in Kempston where children
with a wide range of developmental disorders are treated by personnel
from Health, Education Social Services and the voluntary sector
working in partnership; £150,000 to the local "Foyer"
to provide accommodation and training for homeless young people
and £350,000 to the Huddleston Way project for young people
with learning difficulties to assist them in making the transition
from living at home to supported living in the community.
13. The Charity's Officers, staff and Trustees
assist in many non-financial ways by offering advice and guidance
to other local voluntary organisations and by sitting on the Steering
Groups for many of the larger projects to which grants are made.
14. The Trustees of the Charity have been engaged
for the last 15 months in refining the strategic direction of
the Charity. It is hoped that a new Strategic Plan will be in
place before the end of this month. This Plan will certainly
seek, inter alia, to widen access to the Charity's schools
and their facilities even further, enhance the already strong
public service ethos and spirit of volunteering within its schools
and to develop its grants programme.
15. Ms Brown argues that the schools are run
as businesses and therefore should not qualify for charitable
status. The Charity is not a business but it is run in a business-like
manner; the Trustees would be failing in their duty to make the
best use of the Charity's assets for the benefit of its beneficiaries
if it were not. It should always be remembered, however, that
the Charity has no shareholders and makes no profits that it distributes.
Any operating surplus is used to further the pursuit of the three
charitable objects.
Summary
16. Many of the points above apply equally to
other independent trusts and foundations and to independent schools.
On a narrow, financially based definition it is arguable that
independent schools provide immense public benefit. It is submitted,
however, that Public Benefit is broader and more complex than
can be shown by a mere balance sheet. The Bedford Charity (The
Harpur Trust) is one example of a complex grant-making trust,
which contains within it independent schools and almshouses.
Its benefit to the community and that of its schools is demonstrable
financially, but more importantly, in many other ways. This is,
incidentally, a demonstration of the powerful argument for not
attempting a statutory definition of public benefit.
17. It is appreciated that many people hold deeply
held convictions that the state should be the only provider of
health and education. Without entering into philosophical arguments
about this, it is submitted that independent schools do promote
and advance education and do so at a significant net benefit to
the public purse whilst providing wider public benefit to the
community in other less easily quantified ways. For these reasons,
it is also submitted that they should be allowed to demonstrate
their charitable status by addressing the emerging requirements
of the Public Benefit test as it develops; a task most of them
will relish.
David Russell
Chief Executive
The Bedford Charity (The Harpur Trust)
4 Chancellor of the Exchequer, Budget Speech, 17
March 2004 and The Prime Minister, Speech to the National Association
of Head Teachers, 3 May 2004. Back
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