Newsletter on Review of Charitable Status – Further Education Colleges
The Office of the Scottish Charity Regulator, OSCR has published the results of the pilot scheme to review charitable status.
The Charity & Trustee Investment (Scotland) Act 2005 (the ‘2005 Act’) introduced a new charity test for all charities in Scotland. Any new charities formed since 1st April 2006 have been measured against this new test and the Act contained a requirement for OSCR to carry out a rolling review to ensure that all existing charities met the new test.
As part of this process OSCR carried out a pilot review on eight organisations who volunteered to be the first Scottish charities to be appraised. John Wheatley College in Glasgow was one of these charities.
Part of the new definition of a charity in Scotland requires that the organisation be independent from the control of Scottish Ministers or a Minister of the Crown.
Findings;
OSCR’s findings in the review of the College included;
The Further and Higher Education (Scotland) Act 1992 (as amended by the Further and Higher Education (Scotland) Act 2005) is the College’s constitution, because it is the legislation which establishes the College and sets out its purposes.
The 1992 Act gives Scottish Ministers (the Secretary of State) a wide range of powers in relation to Further Education Colleges e.g. the power to alter and determine how Boards of Management go about their business, consent / approval of the Secretary of State required for certain financial transaction, the requirement to pay part of the proceeds from the sale of property to the Secretary of State.
Conclusion;
OSCR concluded that although John Wheatley College met the charity test in respect of its activities and the provision of public benefit, the charity test was not met overall because of the ability of Scottish Ministers to direct or otherwise control its activities. OSCR further commented that the potential requirement to pay part of any proceeds from the sale of property appeared to contravene section 7(4)(a) of the 2005 Act in allowing the distribution of property for non-charitable purposes.
As a result of these findings OSCR have issued John Wheatley College with a direction under section 30(1)(a) of the 2005 Act to take steps to ensure that either;
a) the powers highlighted are removed from or amended in the Further and Higher Education (Scotland) Act 1992 (as amended by the Further and Higher Education (Scotland) Act 2005), or
b) an order is made to disapply sections 7(4)(a) and (b) of the 2005 Act in relation to John Wheatley College.
OSCR recognises that it is outwith the power of the college to amend an Act of Parliament or make an order to disapply parts of the 2005 Act and they have therefore informed Scottish Ministers of their interpretation of the 2005 Act and how it applies to Further Education Colleges.
The direction issued to John Wheatley College allows two years for a resolution to be found in recognition that this will be a complex legal and parliamentary process.
If you have any questions on the newsletter or OSCR’s findings, or if you would like further copies of the newsletter, please do not hesitate to contact me at jenny.simpson@wyliebisset.com
