The Charity Commission has announced it has withdrawn all of its guidance on public benefit and fee-charging charities following a legal challenge from the Independent Schools Council.
Charity trustees of educational charities which charge high fees, in consequence of their duty to administer their charity for the public benefit, are required to take into account the whole of the class of beneficiaries their charity is set up to provide for. Accordingly, they have a duty to make provision for the poor. That provision must be more than minimal or tokenistic and must be related to their charity's aims.
The ISC claimed the regulator’s public benefit guidance was onerous for trustees of fee-charging schools and was based on an incorrect interpretation of the law. The tribunal said earlier this month it would quash the guidance, removing its legal status, if it was not removed.
The commission responded by issuing a statement saying it had "withdrawn those aspects of its public benefit guidance that require rewriting to ensure that the guidance is consistent with the Upper Tribunal’s decision". "Most of the commission’s public benefit guidance still stands and most charities are not directly affected by the sections withdrawn," the statement said.
The commission has established a working party to review its public benefit guidance, both generally and in relation to the tribunal’s decision.
It aims to produce draft guidance by the end of March, on which there will be a public consultation for three months before it is published in summer 2012.