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Item 2 is consideration of the Charities and Trustee Investment (Scotland) Bill. I welcome our panel of witnesses. We are joined by Judith Sischy, the director of the Scottish Council of Independent Schools; Janet Allan, the principal of Donaldson's College for the Deaf; John Stoer, the headmaster of St Aloysius' College; Margaret Fowler, the bursar of Edinburgh Rudolf Steiner School; and David Mobbs, the chief executive of Nuffield Hospitals. Thank you for joining us this morning. I am sure that, like some members of the committee, some of you have had a difficult time getting here and we are grateful to you for making your way to Edinburgh. Members of the committee have a number of questions for you, so I will get started.
It was unfortunate that we became aware of the process only on 8 December. Although we are happy to be here to help the committee in its consideration of the bill, we have had only a short time to prepare.
I was at the committee's meeting in Perth, which was a good meeting in that we were given a very fair hearing. It was clear that the committee members who attended the meeting wanted to understand our perspective and I was pleased with the quality of the hearing that we received.
Did the Scottish Executive engage with you during its consultation and its preparation of the bill?
On behalf of SCIS, I can say that we were very satisfied. We were part of the Scottish charity law advisory forum, which existed prior to the preparation of the draft bill. It was extremely helpful to hear the general debate on charities, to share ideas—almost with a carte blanche—and to have the opportunity to comment on the draft bill as it emerged. The Executive was willing to meet us if we did not understand something. There has been a good, democratic exercise.
As you know, it is proposed in the bill that the Office of the Scottish Charity Regulator should become a statutory body, in the form of a non-ministerial department that would report and be directly accountable to the Scottish Parliament. Do the proposals for OSCR ensure the office's independence in the areas that you represent?
Our knowledge of the matter is probably limited. I am not 100 per cent sure how a non-ministerial department works. However, I exchanged e-mails with OSCR on the matter and received reassuring responses that the office would be independent. Our main worry is that OSCR must be non-party political. I do not fully understand to what extent ministerial involvement will impinge on the workings of OSCR, but given the Nolan procedures and the other criteria that exist, a regulatory body must be independent and non-party political. We must rely on the structures to create such a body.
OSCR will certainly have to follow the normal public appointment procedures. I do not have the information in front of me, but I picked up from our most recent evidence-taking meeting that ministers would be able to make directions and advise on the annual report. Would that cause the witnesses concern?
The problem that I had when I read through the information that was available to me was that we are all on very new ground. Some of the challenges will relate to definitions of what we understand by "public benefit". Independence is important, but the bill was introduced by the Scottish Executive and is being considered by the Scottish Parliament. Therefore, it would seem that they have reasonable rights to guide the process, but there must also be mechanisms to preserve the independence of the regulatory body.
That will all be known about in time through guidance, regulations and so on. Should objectives for OSCR be included in the bill and should part of OSCR's statutory duties be to provide advice to the sectors that you represent on good governance as well as on adherence with the law?
I have read all the evidence that has been given to the committee, and the question whether OSCR should be about compliance, regulation, advice or support and whether a line should be drawn between compliance and advice is interesting. Our sector would certainly appreciate any advice and support that the regulatory body could give about how charities should best be governed and managed. We think that we do pretty well, but it would be nice to have a nationally acceptable framework within which to operate.
So you would like OSCR to have an advisory capacity on matters other than adherence to the law.
As a sector, we would.
I certainly support that. I am involved with teaching children. It is not good enough to tell a child that they have not passed something—what they must do to improve must be explained to them. That is part and parcel of our job. Someone simply regulating without giving advice about good practice seems to be missing an opportunity.
That sounds reasonable.
That is a difficult question to answer in the abstract, but I am not unduly worried by what I have heard and read so far.
From our perspective, the issue comes down to consistency between what happens in England and Wales and what happens in Scotland. There could be difficulties for us if there is no consistency. In our written submission, we have pointed out a number of areas in which the proposals for OSCR seem to go much further than the current proposals for the Charity Commission for England and Wales.
I think that those points will be covered later by my colleagues.
Mr Mobbs, in your evidence to the Joint Committee on the Draft Charities Bill at Westminster and in your written evidence to us, you stressed the fact that one of the reasons for Nuffield Hospitals having charitable status is your role as a custodian of property for the public benefit. Do you think that that criterion should be included in the charity test in section 7(2)?
The point that we were trying to make is linked to the organisation's purpose. The issue has arisen through my advisers and is a technical issue in which I do not have expertise. We have a purpose and have said that legislation should exist to ensure that all our property, including our assets, continues to be applied for that purpose. That was the point that we were making as opposed to specifically identifying the need to protect property itself.
So you are saying that you are content with section 7(2) as it stands.
That is correct.
You also state that section 5(1)
Again, the issue comes down to the purpose of the organisation. If that purpose is to provide public benefit through the activities that it provides, it is setting out to be a charity and should therefore be registered as a charity so that the legislation can protect all its assets and property in order that they can continue to be applied for the purpose of that organisation. Therefore, it should be registered. The issue comes down to whether it is onerous to have an inconsistency between the two approaches. If registration were automatically recognised from one to the other, that would—
We are talking about the perceived discrepancies between England, Wales and Scotland, with which I have no problem. We may have better legislation. Do you concur that it is in the interest of the public to know that charities require to be registered?
Yes, I do.
Some changes were made between the draft bill and the current bill, many of which have been welcomed. What is your view on identifying public benefit criteria, which is dealt with in section 8(2)? Is that section as well set out as it could be? In particular, how might it impact on fee-paying schools and fee-paying hospitals? It seems to suggest on the plus side that if you are educating or healing people, that is good, but on the minus side the people who pay the fees may be getting an undue benefit, and the public at large may in some way be suffering a disbenefit, because there may be a counter-effect on the education system or the health system as a whole. Is that a reasonable approach to take towards the hospital and school issues? How could it be done better?
Perhaps I could start. I am sure that everyone will have something to say. Defining criteria for public benefit is invidious and difficult, but the bill makes a bold and complex attempt to do so. We could spend many hours discussing how one interprets section 8. We found it difficult to work out what it means, and we are only looking at it from our selfish point of view. I suppose that every charitable organisation will do the same. I found it difficult to unpick section 8. It invites you to weigh up section 8(2)(a)(i) against 8(2)(a)(ii), then the whole of section 8(2)(a) against 8(2)(b), which is not easy to put into practice. However, in principle, having a framework of public benefit is good.
I understand the problem—I think that everyone does. The supporting papers that I have read listed three models, ranging from having no definition to nailing it down quite tightly. It is an interesting issue, because defining "public", let alone "benefit" and "disbenefit", is a problem.
Donald Gorrie's question had a number of parts. The first was about the definition of public benefit in section 8. As our written submission states, we think that that is unclear and we would prefer that the definition of public benefit continued to be the one that is used in the existing and evolving case law, which is the view that has been adopted in England and Wales. Like my colleague, we, too, find it difficult to understand the concept of disbenefit.
Do the representatives from Donaldson's College for the Deaf and the Edinburgh Rudolf Steiner School have any comments?
I agree whole-heartedly that we must show what public benefit we provide. However, I am slightly concerned about various issues. Does the term "the public" mean everyone in the public or a sector of the public? My school benefits a small section of society hugely—it is a section that no one else in Scotland is capable of educating. However, I guess that Joe Bloggs in the street may not even know that we exist. There is a problem with what the term "the public" means. Do we have to benefit a certain proportion of the public? There are dangers when we start trying to quantify benefit and disbenefit. I am uneasy with any artificial quantification of something because that gives a pseudo-truth. Charities contribute qualitatively to society. I give a warning about trying to measure artificially things that are unmeasurable.
At the Edinburgh Rudolf Steiner School we see the provision of education as having public benefit. However, we offer something different and we think that we have widened the choice. We give parents a choice that is not available in the state-maintained sector. I am a bit puzzled about what the disbenefit could be. How could education possibly be viewed as a disbenefit? By widening the choice, we provide a benefit to all parents. We try to keep our fees as low as possible to provide access to people who would normally not be able to afford an independent education. That must be a benefit.
It would be a shame if we discussed the issue without asking for your views on one of the arguments in favour of the concept of disbenefit. For me, smaller schools such as the Steiner schools that have sought public funding and have not been able to access it and independent schools that charge very high fees are in markedly different situations. The argument is that to provide the opportunity for a separate system of education that is easily accessible to people who are very wealthy and that is not easily accessible to people who are not very wealthy results in the public experiencing a disbenefit because the articulate, influential and powerful parents of children in that system have no vested interest in having a well-maintained state sector. How does the panel respond to that argument?
At the Edinburgh Rudolf Steiner School, we have very few very wealthy parents. The parents of our pupils make huge sacrifices.
I take that on board. I re-emphasise that, for me, the calculation that is to be made with smaller schools, especially those that wish to access state funding but are not yet able to do so, is different from that which is to be made in relation to larger schools that charge very high fees.
It is difficult to answer that question quickly, as it raises many issues for debate. A lot depends on John Stoer's point, which was about how we define "public benefit". We do not accept that the definition of public benefit relates only to the state education system; we think of public benefit as something that relates to the whole nation. Most of us are teachers who are trained to teach children and young people, regardless of where they come from, who they are and whether they are poor or wealthy. We are all happy to be working in the independent sector. It might sound naive to say so, but we are not in the independent sector to make money or to gain profit; we are there to educate children and young people. That is what our training is about. That is why we think that what we do provides a public benefit. Our intention is not to harm the state sector; it is to provide as good an education as we can at a reasonable charge. All that we are doing is charging an economic cost to provide that education.
I do not think that anyone would accept that there is a profit motive involved. That would disbar charitable status.
That is the problem with the word "disbenefit"—it is a negative word.
Can I take it that you completely reject any suggestion that an incidental effect—in other words not something that you are motivated by—of what schools that charge very high fees do is that there is a knock-on impact on the state sector?
We are a very small sector; we cater for 4 per cent of the population of schoolchildren in Scotland.
A highly influential 4 per cent.
One must discuss why the independent sector is influential. My point is that the issue is complex. I think that the intentions are important.
I will let someone else answer.
I will speak on behalf of the 12 or so special schools within the SCIS network. I took my school into SCIS because, as a single school in a highly specialised area, isolation is a huge problem for us. We are not part of a local authority network. One of the benefits that we have gained from the SCIS organisation is access to good continuing professional development for our staff. Through interaction with other schools, we can get experiences for our youngsters and some degree of staff training across the sector. That has been highly beneficial to a small school such as mine, which would just float on the waves if there was not some sort of structure to help it.
I want to ask about public benefit, on which I am finding it difficult to understand where the sector is coming from. I am talking about mainstream independent schools rather than specialist schools such as Donaldson's.
Our submission contains pages of examples of the different kinds of public benefit that the schools contribute to society.
Will you summarise the key benefits that you give to the public?
If you would like me to read through the submission—
No, I would just like you to give me some key points off the top of your head.
We are there for the advancement of education. Between us, we educate more than 31,000 children, not for personal profit or gain but to try to give those children the best education that we can. The children are from hugely diverse backgrounds. They are not all wealthy, and even if they were wealthy, they would still be entitled to a good education.
What I am trying to get at is how that public benefit is different from the public benefit that any school would give. You say that teachers like working in an independent school because, as a charity, it has a social purpose, it is not for profit and it is dedicated to education. However, mainstream, public-funded, ordinary schools have those same benefits.
With all due respect, I have not said that that does not happen in mainstream public schools. Most of us have taught in those schools—of course it is the same. Who would argue that it was not?
I still cannot get where the public benefit is of schools such as this as opposed to state-funded education.
John, you try.
The point that you are making is exactly my point. There is no perfect definition of the purpose of education, but if we were to define it, it is to develop a young person to be a responsible citizen—which all schools would try to do—to think clearly, to be able to express themselves clearly and to have consideration for others. Education is not just about learning in the academic sense; there is a community aspect to it as well. That is what we are in the business of and that is what a state school is in the business of. The dilemma that you are putting to us is exactly the right dilemma. The question, however, is whether we can make a distinction between people who, for one reason or another—and not necessarily because they are wealthy—wish to send their children to an independent school rather than go on holiday or have a new car every so many years, and people who do not. Can we make a distinction between people who choose to send their children to independent schools and those who do not, and say that such schools do not therefore have a public benefit? That is the problem that I have. The purpose of education is one—it cannot be divided up. We cannot say that there is a difference between paying for it and not paying for it.
With respect, it is a different kind of education. I have seen the results of that many times.
I have taught in both sectors. It is exactly the same education.
I guess that that is another argument. What I am trying to get at is the justification for charitable status by the proof of public benefit. In very simple terms, how can you justify the public benefit of fee-paying schools?
I would want to put it back to you and ask how you cannot justify it. If we are to say that education is one, it is just a case of parents wanting to pay for it by different means. All parents pay for education. Some people choose to spend their money in a particular way. A colleague asked whether, if all parents had a vested interest in the maintained sector, that would raise the standard of the maintained sector. It might—that is certainly a legitimate argument to be had in this debate. Another side to that, though, is to ask whether it is anti-libertarian to say to people—
We are getting into deep philosophical stuff about whether we agree with private education. All I want you to do is to give me your opinion—which I think that you have now done—about the public benefit of fee-paying schools.
Could I express an opinion on choice for parents? I have worked for most of my career at the more disadvantaged end of the market, if you like, but I have also worked for a number of years in a mainstream independent school other than Donaldson's. What is clear to me as a professional is that 95 per cent of the job is the same wherever one works and whether the kids one teaches are three or 18: good teaching is good teaching. One of the differences in the independent sector is the independence of its head teachers to meet the needs of their client groups. In most of the independents—I do not have access to all of them—there exists the capacity to educate in ways that meet the needs of their children.
You have understood better than the other witnesses what I am trying to get at. You are saying that, collectively, independent schools benefit society. I would have a problem if that benefit was related purely to privilege. Others will comment on these issues.
The Edinburgh Rudolf Steiner School is involved in a couple of initiatives to take the education that it offers into the state sector. We are involved with a local primary school in a future learning and technology project that is funded by the Executive. We exchange ideas and teaching methods and there are pupil and teacher exchanges. The project is working well for both parties; we learn from them and they learn from us. We both take new ideas and methods back to our schools.
I will keep my question brief, as I am sure that we will return to this point. We can all accept that the educational aims of the independent and state sectors are the same. However, like other members of the committee, I am struggling—from some of the answers that we have received so far this morning—to establish why it is necessary for the independent sector to have charitable status to achieve those aims, when the state sector seems to be able to do so without that status. That is the nub of the issue that we are trying to get at in the bill.
I do not know why all schools do not have charitable status. That is no doubt related to the fact that state schools are part of local authorities, which have wider duties. In our view, all schools should have charitable status.
That point can be turned on its head. Given that the state sector represents the vast majority of education provision, would it not be better for no school to have charitable status, which would mean that there was a level playing field?
I disagree. I do not think that such an approach would fit the proposed legislation.
It would achieve the level playing field that you seek, according to the answer that you gave to my first question.
If state schools were registered as separate entities, they would have charitable status. They do not have that status because they are part of local authorities.
I cannot speak for the law in Scotland, but I was the head of a maintained school in England that was a registered charity and had all the benefits that accrue from that status. I would be happy to be proved wrong on this, but I am not aware that any benefits would accrue to maintained schools from being given charitable status because they already get all the benefits that are associated with that status. As I understand it, the playing field is level.
We have strayed from our original line of questioning. I ask Linda Fabiani to finish her questions on schools. Other members who have questions on this area, such as Christine Grahame, may then comment.
I think that I have covered what I wanted to ask about. I think that John Home Robertson was going to come in on the back of my questions.
In that case, I invite Christine Grahame to speak.
I have made no criticism of panel members in relation to teaching or their dedication to the teaching profession. That is not the issue for me. In saying what follows, I make a distinction between schools such as the Steiner schools and Donaldson's and schools such as Fettes College, to which my comments will relate.
We have spoken to a lot of you, individually and in groups, so it would be wrong if you thought that we do not understand where you are coming from—
I am sure that you do.
Of course we understand.
With respect, that is not the position now. We are looking at the here and now.
Equally, you asked a question and I think that it is fair to say that the schools have tried, extremely staunchly—over three or four centuries, in some cases—to adhere to the principles on which they were founded.
Do you accept that gaining entry to some of your schools is not necessarily dependent on academic ability but on ability to pay the fee?
Every school has its own selection criteria.
Are some of your schools like that?
None of them takes one approach at all times. They all treat every child as an individual.
Much of the debate is focusing on schools. I would like to address some of the points in relation to Nuffield Hospitals. You ask how we can justify our claim to be of public benefit. The submissions that we have provided, including the one that we sent to Westminster, go into some detail on that matter but, in summary, Nuffield Hospitals believes that it provides public benefit intrinsically by preventing and curing sickness, by providing an alternative to the state sector, by providing complementary services to the state sector—we provide some services that the state sector does not—by relieving the pressure on the state sector and by providing confidence and assurance that the things that we do are for those purposes.
Mr Home Robertson has questions on Nuffield Hospitals. I ask you to start with those, after which you can return to schools issues. That will make it slightly easier for our clerks to keep a record of where we are.
I am struggling to keep track of the script. I will give Mr Mobbs the opportunity to cover some of the points in his submission. You have referred to the charity brand and your concern that the bill could create doubts and undermine confidence. What difficulties, if any, will the differences between the Scottish and Westminster bills—especially on provision of care to the elderly, financially disadvantaged disabled people or other disadvantaged people—cause the private health care sector?
That takes us back to the definition of public benefit in section 8(2). If the definitions of public benefit diverge, Nuffield Hospitals could remain registered as a charity in England and Wales, which would protect its assets for the public under that regime, but would not be registered in Scotland. The question of what would happen to our Glasgow hospital and our Scottish operations is confusing. Would they continue in their current form under United Kingdom tax law? Would the organisation be registered as a charity in England and Wales and continue to operate in Scotland but not be called a Scottish charity? What would happen to the Scottish community that we serve? Would it be denied the protective regime that the Office of the Scottish Charity Regulator could provide the operation? That is confusing.
You are concerned about the difficulties that could arise from discrepancies between the different charity test criteria.
Yes, and we are concerned about the definition of public benefit as described in section 8.
We will have to reflect further on that.
We rest our case.
That was unkind.
Sorry—I missed that comment.
On average, the proportion is a minimum of one in 10, but it is possibly more.
So about nine out of 10 pupils do not receive scholarships or bursaries.
Yes.
That is a weighty consideration. What were the criteria for the award of scholarships and bursaries and how do they compare with general entrance criteria for private schools?
In most cases, the general entrance criteria are considered separately from the application for financial assistance, which is means tested. A fairly detailed form asks for details of family income and all the rest of it and it also takes capital into account. The form is used throughout the UK.
Are there standard academic entrance criteria?
No. That is up to individual schools.
Am I right in thinking that in order to gain a bursary or a scholarship, pupils need to demonstrate that they are of a pretty high standard?
That is not necessarily the case; it depends on whether the school is academically selective.
What proportion of schools are academically selective?
It is difficult to generalise about schools' admissions criteria. Most schools say that children have to do a test in English and mathematics at senior 1 entry level and be interviewed. They also look at previous school reports and so on.
I will return in a second to the point about special needs and disabilities. How likely is it that a child of average ability whose parents cannot afford to pay the fees would get a place in one of your mainstream schools?
Very likely.
I speak in the specific context of St Aloysius' College, which is in the trusteeship of a religious order. As with all religious orders, there is a clear central directive to have an option for the poor. Sometimes that does not sit easily with running an independent school, as you will appreciate.
I have a notion that it would be useful to have some more written information on that issue somewhere down the line, but we can correspond on that. I want to give you an opportunity to say a bit more about access for people with special needs.
I used to be on the senior management team at George Heriot's School, prior to going to Donaldson's College for the Deaf. At Heriot's, I looked after youngsters who have learning difficulties but also those who are foundationers, in the school's terminology—the school takes children whose fathers are dead. The criteria for entry in such cases were actually lower than for fee-paying parents; the criteria relate to a child's benefiting from the education, so the selective nature came out for that particular group of children. Not only that, but if we could have filled a place with a very able fee-paying child but a less able foundationer child applied, the foundationer got preference. I cannot generalise on the sector because I do not manage it, but I worked for a long time in the system, so I wanted to throw that example into the pot.
Who gets access at your present school, which is Donaldson's?
Anyone whom a local authority will pay for can have a place. The difficulty in getting into Donaldson's is much greater for political reasons, in that people have to access the purse strings of their local authority. We have many more applicants than kids who get in because local authorities block the system for financial, ideological or other reasons. However, I think that that is probably for a different debate.
I wonder whether you can help us. Our job is not to do what OSCR does, but to set the rules and the framework under which OSCR can operate sensibly. How can we lay down guidance for OSCR to judge whether particular establishments deliver public benefit? Earlier, Janet Allan said forcefully that quantifying things and ticking boxes is not the right idea. Is it possible to set out aims or general rules by which OSCR can judge each individual school or hospital system, given that—as has been said—they are all different?
I am sure that that would be possible. All the schools are different, but they exist within an overall context of similarity in terms of ethos, expectations, objectives, aims and missions. They are all schools: they exist to educate children, to contribute to society and to do the best that they can for their communities in the context of providing education. I am sure that we could draw up guidelines.
Given the diversity of provision, I envisage that one could establish so many criteria and that a school would have to meet, say, 75 per cent of them. That would allow schools that do a lot of public service to be acknowledged, which is perhaps one way forward.
To be specific, if Donaldson's could demonstrate, for example, that it allowed community groups to play football on its pitch, would that be a plus? Is it reasonable to ask schools to take that attitude?
Most independent schools open their facilities to the general public at evenings and weekends. We have an agreement with George Watson's College under which we use its sports facilities and grounds for our summer races. A Scottish country dancing group uses our hall once a week and a sub-group of the Scottish Chamber Orchestra rehearses in our hall. All independent schools do that sort of thing already—we all open our doors to the public.
It is a challenging task to give particular guidance because the situations are so varied—I am not sure that it is possible. I mentioned at the meeting in Perth that St Aloysius' College is particularly concerned with the quality of the buildings that we put up. Our school is in central Glasgow, right next to the Glasgow School of Art, which is one of the centrepieces for tourism in the west of Scotland. We have put up two brand new buildings at huge cost to our trustees and the parents of pupils of the school. Both buildings have won awards—the most recent one won an award as the best new building in Scotland. That is a public benefit to the citizens of Glasgow and to all visitors to Glasgow. Any guidance would need to be couched in a way that could be interpreted. Regardless of the educational issues and the issues of access and allowing other people to use the school, we can make a strong case that we provide a public benefit because of our buildings.
I want to follow up an earlier question from John Home Robertson. I do not call into question the descriptions of the schools that members of the panel have talked about, but is the Scottish Council of Independent Schools, in talking about the separate nature of entrance criteria and applications for financial assistance, saying that there is no independent school in Scotland for which an application for financial assistance is dependent on academic criteria? Are such applications dealt with purely through means testing?
I am sorry—could you repeat the question?
You described applications for financial assistance as being decided on a means test and said that entrance requirements were possibly academic but possibly something else. Does that mean that there are no independent schools in Scotland for which an application for financial assistance is dependent on academic criteria? Are those applications dealt with purely on the basis of a means test?
The trouble with independent schools in Scotland, and anywhere, is that they are independent. I do not know the detail of every independent school.
So you do not know the answer.
I cannot answer.
Thank you. I just wanted to be clear.
Linda Fabiani has a quick question. I ask her to follow on with any issues that are still outstanding from questions 13 and 14, which relate to tax and non-domestic rates relief.
I am happy to do that, but first I want to clear up an issue relating to entrance with financial assistance, which Patrick Harvie and John Home Robertson have mentioned. Some schools are academically selective. I know that the witnesses cannot answer for all schools but, generally, does the academic selectivity that applies to those who receive financial assistance apply to those who pay for their education?
Yes; exactly the same criteria apply.
Is that true generally? If someone applies for a bursary or a means test and the school says that the person must sit an entrance test of their academic ability, does the same entrance test apply to a person who pays the full fees for their education?
Yes, unless—as Janet Allan said—they are orphans or fall into a special priority category for means testing or financial help. As I said earlier, scholarships may be given to children who have special needs or particular aptitudes. It depends on what the bursary is for.
What I am trying to get at is whether some people can pay to be in a private school regardless of their academic ability, while others who apply for financial assistance may have to meet an academic test.
I imagine that there are probably examples of both.
I have a couple of quick questions on the charitable status issue. Apart from tax and non-domestic rates relief, what benefits does charitable status provide to independent schools as a business?
As a business?
Yes.
As we have mentioned both today and at our meeting with the committee in Perth, the benefits are as much intangible as tangible. We have never done a systematic analysis of our parental constituency, but it is interesting that mock elections in our schools and school political societies and modern studies societies suggest that the vast majority of our parents vote Labour. Statistically, that is what one would suspect—
With respect, that is not what I am getting at.
Let me continue. In that kind of society, it is important to our parental constituency that the schools are not isolated but part of the local community. The fact that independent schools are charities helps to give parents confidence that the schools are not for personal gain or profit, but are part of the charitable community in Scotland.
A school could operate as a non-profit distributing organisation without being a charity. What are the benefits to independent schools of being designated as charities?
Charitable status is an important kitemark for us. It means a lot. As I said, independent schools were set up as charities and see themselves as charities. They do not exist for profit. Being part of the community means a lot to them.
Given that independent hospitals can operate as non-profit distributing organisations, what benefits do Nuffield Hospitals gain from charitable status?
If I may reinforce Judith Sischy's point, the charity brand confers significant benefits on an organisation because it gives people confidence and assurance that the resources that they provide will be applied solely for the purposes of the organisation and will not be distributed to shareholders. The charity brand also provides assurance about the regulation and protection of assets.
It might do that once the legislation is put in place.
That happens under the law as it stands. In addition, previous research that we have done has shown that, where public services are being modernised to give people a choice, people prefer a not-for-profit organisation in exercising that choice. As the charity brand is associated with not-for-profit organisations, people have that confidence and assurance. I think that the issue comes down to perception, quite apart from the tax advantages to which you referred.
Let us move away from perception. What financial benefits does an organisation gain from being registered as a charity?
As we stated in our written evidence to the Westminster Parliament, the financial benefits can be described under three broad headings: corporation tax relief, rates relief and VAT. Those are the three principal areas of relief for hospital operators, but I do not know whether schools receive the same benefits.
I know that the report of the joint committee down at Westminster suggested that independent schools and hospitals should not be registered as charities but should still be able to receive some tax breaks to help them to operate. What is your feeling on that?
We feel that that would be unnecessarily complex. Almost the only tax relief that independent schools receive is rates relief. From the returns that I have seen, the schools receive very few other tax benefits. As we said, we have always been charities. I do not see what would be achieved by changing our status.
It would be possible to establish another not-for-profit sector that was provided with the same tax benefits. We made that point in our evidence to Westminster. If that is the way that the Government wants to go, it should tell us soon, so that we can work with it and help it to do that. However, my earlier point about a divergence between Scotland and England and Wales comes into play. If an organisation that can be registered as a charity in England and Wales must be a not-for-profit organisation in Scotland, that will undermine public confidence in the charity brand. It might also mean that the charity brand is not modernised. Essentially, it would be saying that the charity brand could only be about giving away value and that charities could not charge fees.
I am aware that most members of the public do not realise that private schools and private hospitals are charities. Does the public perception about the benefit of charitable status perhaps give confidence only to those who use such services?
Our research into the market suggests that, when people choose the independent sector for health care, they do their research. Some people choose Nuffield Hospitals because of the charitable status.
So it is a benefit to those who choose to use the service.
Yes.
We are the Scottish branch of a much larger charity that is based in England and Wales. No one would assume that we were anything other than a charity.
If you asked the average person in the street whether a private school was a charity, you might be surprised by the answer.
The average person in the street may not even know who we are. If they were to know something about the school, even from past association, they would be hard pushed to think of us other than as a charity, because of our close link with the overall work of the religious order.
Perhaps. We do not have the research to show whether that is the case.
I visited Gordonstoun during the summer and have papers on the school. I know that each independent school is unique, but Gordonstoun is particularly unique.
Because of its links with the royal family.
I would be happy to make available to other members of the committee the information that I have. I will not take up the point that my colleague has made. The SNP locally is very supportive of the school. If it is not, that should be made known locally.
The issue is charitable status.
Today we have concentrated on the benefits of charitable status, but the process is a two-way one. My scribbled minutes of our meeting in Perth indicate that last year Glenalmond College paid £480,000 in VAT on computers, which it cannot recover, whereas state schools can recover such VAT. We must examine both what independent schools are getting because of their charitable status and the benefits that they provide elsewhere. Today, no one has mentioned the fact that, if the 31,000 pupils that are educated at public schools in Scotland were put into the state school sector, that would cost the taxpayer £155 million. We must ensure that we have a clear debate.
Will you get to your question?
Mary Scanlon seems to think that she is giving evidence.
I would like to give evidence on the issue, because as a single parent I could not afford to send my children to a private school. I decided to apply for them to go to the High School of Dundee because I liked its management of bullying and discipline. The school was not elitist. I could not afford to pay the full fees, but I am delighted to say that I received help. I am sorry that the assisted places scheme has been abolished, but that is another story.
You are back on your script.
There is much more that I could say. If we are to be proper, impartial parliamentarians, we need to have a balanced debate and to consider more than one point of view.
I can try to answer that question, but it is not easy. We have been very modest today, but we have included all our arguments in written evidence. At the committee's request, we have tried to listen to members' arguments concerning disbenefit and so on. I trust that members will examine the positive representations that we have submitted in writing and I thank Mary Scanlon for alluding to those.
However, if those financial benefits were to be withdrawn as a result of the loss of charitable status, would the independent sector be more elitist and exclusive or would it still be able to bring in children from families with lower incomes in the way that you have described? Would the loss of charitable status make you more or less socially inclusive?
It certainly would not help to make us more socially inclusive. The schools are determined to try to continue to be open and accessible to as wide a section of the public as possible. Assisted places are still helping a minimum of one in 10 of the children who attend the schools. If the schools lost the benefit of the money that they receive as a result of having charitable status, they would either be unable to fund those places or would have to raise the equivalent money from other sources, which would probably be the parents.
I note that, when assisted places were lost, the parents who paid the full fees paid 3 per cent more in order to ensure that scholarships and bursaries could continue to be offered. Are you saying that a similar thing would happen if you lost charitable status? Would those who pay fees have to pay more? I stress that those parents already pay twice, because they pay for education through income tax and national insurance and they pay the full cost of school fees as well.
They would have to pay more unless the schools found other ways of raising the funds.
I think that you will find that the bursary funds are ring fenced, so any change would not affect them. The parents who pay the full fees would pay more.
So that would mean that families that could not afford to pay the higher fees or were unable to make the sacrifices that that would require would be excluded.
Yes. Of course, that would put more pressure on the state system.
Of course it would.
The impact on investment should not be underestimated. If the tax relief is lost, the impact might be not only on fees but on investment. Nuffield Hospitals has invested considerably more than the cash that we have generated in Scotland. If we were unable to make that investment, there would be a considerable impact on our continuing operations.
Similarly, St Aloysius' College owns nothing; everything is owned by the charity of which we are a part. It has some land that it is considering selling for the sole purpose of building a sports hall on our site. Because the organisation is a charity, all of the proceeds of that sale will go towards building the sports hall. If charitable status were lost, we would be unable to invest in the site. The investment in the site will benefit our pupils but, as a result of negotiations to do with building a sports hall, it will also benefit all the residents of Garnethill, who will have access to the sports hall outwith school hours. The removal of charitable status would have knock-on effects on investment in the school and, by implication, on benefits that might accrue to the local community.
The same situation applies with regard to Gordonstoun.
Analysis of our parental constituency reveals that around 40 per cent are what we call first-time buyers, which is to say that they did not go to an independent school themselves. A much larger percentage of the children than was previously the case comes from families in which both parents are working. Every time there is something in the press or a parliamentary report about the schools being for toffs or wealthy pupils, we get a huge number of responses from the parents, saying, "We are not toffs. We are not wealthy. We are hard-working parents who are doing the best, as we see it, for our children."
The trade union member at our visit to Perth in November made that case very strongly.
That is right.
I want to pick up on Mary Scanlon's point about paying twice. The point came up at the meeting in Perth and I took issue with it. Many of us choose not to use public services but still pay for them. For example, people who do not have any family still pay for the education system through their taxes. The argument about paying twice is very weak.
It is absolutely right that there should be a public register of charities, so we have no problem with working with, and giving information to, OSCR as a regulatory body. There is no such body at the moment for charities. However, we have on several occasions given evidence to the Parliament's Education Committee about the fact that schools are hugely regulated and that, in our view, there is enormous and unnecessary bureaucracy and duplication. If there were—we are working with the Executive on this at the moment—an electronic database that all the regulatory bodies could share, that would be sensible, time saving and much appreciated. The lines of accountability are enormous and all encompassing. Somebody should be in the middle to say, "Right, we're all giving the same information to six bodies in Scotland. Can we not share it?"
Anything to reduce bureaucracy in any institution has to be a good thing. I can always remember receiving, as a head teacher, David Blunkett's 50-page document on bureaucracy busting. It makes good sense to share, and to give information only once. However, I appreciate that achieving that is another matter altogether.
Judith, did you say you were working with the Scottish Executive?
Yes—we are working with the Scottish Executive, the Scottish care commission and Her Majesty's Inspectorate of Education on that issue.
As you may know, the bill indicates circumstances in which a person may be barred from being a charity trustee. One of the criteria is mismanagement, which has been subsumed under the category of misconduct. At previous evidence-taking sessions, a number of organisations commented that they thought it unduly harsh for someone to be barred from serving as a trustee because of simple mismanagement, as opposed to misconduct. Do the organisations that you represent have a view on that issue?
SCIS has not really considered the matter. We have certainly considered the need for good management and good conduct in our duties as trustees of charities. There are huge parallels between that issue and the issue of misconduct and mismanagement by teachers. I should have thought that misconduct and mismanagement were very different, but that is just a personal view.
The general principle that the bill seeks to establish is sensible. I do not know how mismanagement would be defined. However, it is crucial for the running of any school or charity that trustees and governors who act on their behalf should be beyond reproach. Guidance on that matter would be helpful.
Can you clarify the VAT status of independent schools? Is it the same for them all or is it different for different schools? You did not address that issue in your submission.
We did not mention it both because it is extremely complicated—I am not an accountant—and because it is not related to our status as charities. Education is exempt from VAT, which may explain why our situation is different from that of hospitals. The issue has nothing to do with charitable status and is not particularly relevant to this debate.
I wondered about the matter because it was raised.
Any educational establishment is exempt from VAT because of the European exemption for education.
I return to an issue that I raised earlier. I understand why you want to emphasise the best examples of public access to private schools. It would be useful if you could provide us with some detailed information. It would be helpful to the committee if you could let us have a note on the number of bursaries and scholarships that are offered by individual schools.
We are collecting some case studies, which we hope to have by 24 January. Those may be helpful to the committee.
Some numbers and a summary of the criteria for access would be relevant to our considerations.
That is no problem.
I thank the Nuffield Hospitals and SCIS for submitting written evidence to the committee in advance of the meeting. All members found that especially useful. I am grateful to everyone for attending and ensuring that they were able to get here on time in what for many were difficult circumstances.
Meeting suspended.
On resuming—
I welcome the second panel of the morning. I know that the witnesses sat through the first session and I am grateful to them for their forbearance. With us are Vanessa Taylor, the policy and equalities officer at the Scottish Inter Faith Council; Janette Wilson, secretary of the Scottish Churches Committee; and Ivan Middleton, the secretary of the Humanist Society of Scotland.
We are grateful to the Scottish Executive for the efforts that it made to consult fully the Scottish Churches Committee, which included sending along a member of the bill team to speak to us. We are pleased that the Executive took on board some of our responses following that meeting. Sadly, we did not manage to bend it entirely to our will, but—
There is time yet.
Yes.
The Humanist Society of Scotland is pleased to be included in the consultation exercise and will make a written submission by 24 January.
We, too, were satisfied with the consultation process and the fact that the bill team made itself available to us.
Do you think that the form that is proposed for OSCR in the bill will ensure its independence?
The answer to that is that only time will tell. Under the bill, Scottish ministers and the Scottish Parliament will be able to exercise control over certain matters. It remains to be seen how far those bodies will resist the temptation to exercise control when it is not appropriate to do so.
I have another question on that issue. Last night, I was religiously going through the papers—
You get my vote.
I hope that Mary Scanlon was on her knees.
I was particularly interested in the information on the Church of Scotland. Most Joe Averages do not know much about the Church of Scotland Act 1921, but you have given me an opportunity to ask about it. Your submission states:
My submission tries to explain the background and where we are now. The proposal is that we move from designated religious body status to designated religious charity status. When the consultation on the draft bill was published, it seemed to the Scottish Churches Committee that the old powers of the Scottish Charities Office and the Court of Session that had been disapplied in the case of religious bodies were to continue to be disapplied, but that there was to be no disapplication of the new powers that were to be given either to OSCR or to the Court of Session. In some cases, it is difficult to draw the line between matters that are appropriate for civil authorities and those that are appropriate for church authorities, but the Church of Scotland's view, which the Scottish Churches Committee endorses, is that some aspects of the bill—as highlighted in our submission—cross the line.
So your submission argues that the bill oversteps the mark. It states that the use of the powers of the Court of Session would
That is certainly true of section 34(4)(g), under which an order might be made
Your submission contains a copy of the declaratory articles acknowledged in the Church of Scotland Act 1921, which state:
The Church of Scotland is a bit like the UK, in that there is no single document that could be called the church's constitution. There are various documents, many of which are of historic significance, which, taken together, could be said to constitute a constitution. If one is looking for a shorthand version of the constitution, the articles declaratory that were passed in advance of the union of 1929 are the closest that one will get. They declare that it is for the church to amend its constitution and set out a procedure for doing so. Many checks and balances are built into that procedure. The Barrier Act 1697 states that any General Assembly legislation that could be said to impinge on the areas of doctrine and government has to be approved by the presbyteries before coming back to a second General Assembly. Paragraph VIII of the articles declaratory sets out an even tighter provision for a two-stage reference procedure. However, over and above that, it makes it clear that that provision cannot affect the most important part of the declaratory articles, which is paragraph I.
On page 11 of our paper COM/S2/05/1/3, which contains the written evidence, we read that the articles declaratory say that the church receives from
Yes. I think that it is accepted that the 1921 act was an acknowledgement by the Westminster Parliament that there are certain areas within which its writ does not run. By extension, the same thing must apply to the Scottish Parliament. Therefore, if there were a circumstance in which the church said that something was a matter for it to decide on and the Office of the Scottish Charity Regulator or the Court of Session were saying that that was not the case, the courts would be placed in the difficult situation of having to sort out which arena the particular provision fell within. It is of concern to me that the provision that I have highlighted might cross the line. Certainly, it is analogous to the provisions that Westminster exempted in the Law Reform (Miscellaneous Provisions) (Scotland) Act 1990 for the reason that I have outlined.
That is interesting.
Yes, it is. Constitutional and ecclesiastical lawyers find this stuff wonderful.
Deciding whether Jesus Christ or the Scottish Parliament is the leading authority in relation to the provision would be a lawyer's paradise.
Someone rather flippantly asked me whether, since Jesus Christ is the head of the Church of Scotland, he will be a charity trustee. By extension, one might also ask whether Queen Elizabeth is going to be a charity trustee of the Church of England.
I am grateful to you for clarifying the issue.
I hope that I managed to make it clear. As I say, it is not an easy area. I think that the issue comes as a surprise to parliamentarians. Donald Dewar made an excellent address to the House of Commons when there was concern about how human rights legislation might impinge on the church's jurisdiction. He commended the language that was used in the articles declaratory and in the bill with which he was dealing. With no disrespect, I would say that the same standard has not been reached in the bill that we are discussing.
We will come back to that issue at a later date as the number of questions that I can ask today is limited. It is interesting that the church can challenge the legislation of the Parliament.
I am confused. Do the articles declaratory relate to the governance of matters within the church?
Yes. They relate to matters of doctrine, worship, government and discipline and state that Parliament should not legislate on areas that might impinge on those areas.
But that is not what Parliament is doing. Further, as a member of the Church of Scotland, I cannot imagine that the church would not accept legislation that was enacted by this Parliament or the Westminster Parliament. I do not think that that is what the articles declaratory say.
Perhaps the most straightforward example relates to paragraph IV of the articles declaratory, as approved. After the reference to doctrine, worship, government and discipline, it goes on to talk about
I seek clarification on that point. Would not somebody be suspended only on the ground that they were not suitable to be a charity trustee? They would not necessarily be suspended as a minister of the Church of Scotland or, for that matter, a minister of any religious denomination.
If someone is a minister, in the law of the church they are the moderator of the kirk session of the congregation. Clearly, that body is in control of the charity, which is the congregation. How could the minister continue to moderate the kirk session if he was not a charity trustee?
That is a matter to which we will have to give further consideration.
I wonder whether we can get Janette Wilson's views on behalf of the churches and the interfaith organisations as a whole. Changes were made to the draft bill to arrive at the bill that is before us. On the whole, have those changes been helpful? Have there been any changes that are not helpful? In particular, is the endeavour to clarify the public benefit criteria successful, or would you like to suggest any changes to it?
I am going to annoy Ms Grahame, but the view of the Scottish Churches Committee is that we prefer the overall approach that Westminster has taken, to continue existing charities as such and not potentially to throw the baby out with the bath water—as appears to be the situation here—by saying that there can no longer be reference to precedent and the common law in determining definitions and issues relating to charitable status. I also feel that some charities might fall through the net.
The Scottish Inter Faith Council's view is that the guidance on the public benefit criteria is not clear. We welcome the criteria's inclusion in the bill because, in their absence, we would be even less clear about how to meet the test. Although having guidance is a positive step forward, it is not clear and, as a result, much confusion, uncertainty and concern will be caused about whether certain religious organisations meet the criteria.
It would be helpful at least if some public benefit criteria were made clear. Somebody will have to do that at some time, and it would be best if it were done at the beginning of the process rather than later.
Could there be a problem for organisations such as the Humanist Society of Scotland—I do not know whether it would be regarded as a religious body—in respect of whether it provides public benefit and helps to improve the moral conduct of the citizenry? Have you given thought to how you would demonstrate public benefit?
Yes, indeed. I draw attention to the 2001 census in Scotland, which showed that 28 per cent of the population—I think that it was 27.9 per cent, to be accurate—said that they had no religious belief. However, they still want to have rites of passage, and they turn to humanists for that. We did more than 1,000 funerals in 2003, and I would imagine that the figure for 2004 will have exceeded that. We also do humanist weddings, naming ceremonies and gay affirmations. There is a public benefit there, at least for the 28 per cent of the population who can turn to us for those services.
Before we move on to the next question, I apologise to the witnesses: I appreciate that you are probably having some difficulty with the sunshine behind us. It just goes to prove that we have four seasons in one day in Scotland—that is not an urban myth. The clerks have requested that the blinds be lowered—unfortunately, we are not able to do that manually. I am sorry for any inconvenience that the sun might be causing you.
As long as it is not making us look too shifty.
Not at all.
It is giving you a halo.
I ask the panel to expand on the question of the public benefit test. One of the difficulties that I had when I was going through the papers last night—unlike Mary Scanlon, I was going through them quite atheistically—
Did you know about my religious beliefs, Patrick?
Similar arguments are put forward by the independent schools and the religious organisations and I experienced the same problems with both. Some of the arguments about schools were discussed earlier in the meeting. The case that is effectively being put by both kinds of organisation is that they provide a public benefit, but do not want to be tested against it. They are convinced that what they are doing is of public benefit, but they are unwilling to be, or are uncomfortable about, being exposed to the public benefit test in the same way as every other charity, despite the fact that the benefits of charitable status are identical. Could you expand on the question whether you provide a public benefit and, if you do, why you feel some difficulty in demonstrating that?
Part of the Scottish Churches Committee's concern is what removal of the presumption of public benefit will mean. As I think I have explained, I believe that that is a rebuttable presumption. Indeed, there have been cases where it has been determined that certain religious organisations are not of public benefit.
Do other panel members have a comment on that?
Yes. Members of the Scottish Inter Faith Council were clear that they provide a public benefit. There was a split in opinion; some people were not particularly concerned about meeting the public benefit criteria, but others were. That relates to the fact that the public benefit criteria are not clear and we did not feel that the guidelines clarified them. Our members are not worried that they cannot withstand the public benefit test, but they do not know what the criteria are. It would be helpful if there were a way to allay people's fears. One way to do that would be to include the statement that public benefit might be non-material and include spiritual or moral benefit. That would go some way towards allaying people's fears about meeting the public benefit criteria and about the removal of the presumption of public benefit.
Would there not then be a danger of our getting into tortuous arguments about what constitutes moral benefit and who defines it?
I am not a lawyer, so I do not know how tortuous that would be.
I am not a philosopher, but I think it would get complicated.
The guidelines for the criteria do not make it clear that non-material benefit would be taken into account, or that if it were taken into account it would encompass spiritual or moral benefit. Perhaps that is not the correct way to word it, but we would certainly welcome if it the lawyers could come up with something—if it were not too tortuous—that would reassure people that spiritual and moral benefit could be taken into account.
Does the Humanist Society of Scotland have views on the question?
Yes. I have already addressed some of those points with Donald Gorrie. We try positively to encourage people to lead moral and ethical lives and we share in that with our colleagues who bring in a supernatural dimension, which we try to manage without. We are all trying to promote a more moral and ethical stance in public and private life.
This is quite tough stuff. Mr Middleton introduced an interesting idea about section 7(2)(c) and whether the words "or belief" should be added at the end of "the advancement of religion". That is a difficult idea, but you might have stumbled on something when you talked about moral and ethical purposes.
As I understand it, designated religious body status will cease when the legislation comes into effect.
The bill, when enacted, will repeal that legislation.
It is certainly the case that because of the clean-sheet approach, those bodies that were designated religious bodies will have to apply to be designated again and will therefore have to be given the once-over by OSCR against the criteria set out in the bill for being a designated religious charity. Apart from some tiny differences in the wording, those criteria are the same as in the 1990 act. However, the Scottish Churches Committee prefers the 1990 term "designated religious body" because it is the body, such as the Church of Scotland, that is designated. The component elements or congregations that we are talking about are also charities of course. When the term "designated religious charities" came out, people started to get confused and I had a number of congregations that do not have 3,000 members wondering whether there was going to be some change.
So the Church of Scotland will have many charitable functions and each of those will be required individually to—
No. Each congregation is a separate charity with its own charity number. There are also regional and central bodies which have separate charity numbers.
I see.
The idea of designated religious body status—and probably designated charity status—is a kind of compromise that was invented in 1990 to try and get around the situation in the Church of Scotland.
It was to try and get around the multiple things that are done in the Church of Scotland; I understand.
I have tried to put the other side of the equation in my paper. Designation can be justified on the ground that a body can prove that it can self-regulate, that it can control all its bits and pieces and make sure that they are all behaving themselves. If the body then falls down, it should lose the status and that would open it up to the full battery of regulatory controls.
Mr Middleton, does that also apply to your organisation? Would it be a designated religious charity?
No; not if the word "religious" is there.
You would need the wording to be amended.
Yes, or we would just be designated as a charity.
The organisation would just be a charity, so section 64 would not apply to you.
I realise your party affiliations, but reference has been made to what is happening across the border. Our sister organisation, the British Humanist Association, is also seeking to have the Westminster legislation include "religion or belief", and it is having some success with that argument.
I was speaking less from party affiliation than as an ex-Scots lawyer about the individuality of Scots law and trying to make it even more individual.
Right. Some people have said that, if there is no definition of religion, what is the definition of belief? That would open up some difficulties. However, the International Humanist and Ethical Union—IHEU—is a non-governmental organisation that has a seat at the United Nations, which suggests that some tests have already been applied to and passed by secular humanism.
I do not know whether I want to ask you to guide us by giving me a definition of a religion or a belief that would qualify, and a definition of one that would not, according to the test. I do not think that I want to tread there, unless you want to tell us. I am basing my assumption on past case law. We are saying that there is a clean sheet, but OSCR and others will pay heed to what has been in guidance previously, if not formally.
One would hope so.
But as well as looking back, we need to look forwards. Society is becoming much more complex and people are making different choices. We must try to get the legislation to anticipate some of that, as well as to catch up with where we are now.
I want to ask about the phrase "public worship" in section 64(1)(b). That is one of the tests. Can you define what public worship is and how you would be able to pass that test?
I will answer that first, to get it out of the way. We would not pass that test because we do not worship anything.
So, you would not qualify—
We could qualify under other criteria.
What is Janette Wilson's definition of public worship?
Some members of the Scottish Churches Committee are not designated religious bodies at the moment, as they cannot meet these criteria. It is important to distinguish between the test for being a charity and the test for being a "designated religious charity" under the bill.
It is not something that we have found to be a problem for any of the faith communities. I do not think that there is any off-the-peg definition of worship that everybody agrees with, although I could be wrong about that. I would guess that worship would generally be seen by religions that have a god as praising that god or gods. For religions that are non-theistic, I would guess that it would be, for example, veneration of the Buddha by Buddhists. I do not know about the legal status of public worship but, as far as I am aware, it would not be a problem for any of the other faith communities.
My question follows on from what has been said. I am not a church expert, but I understand that some churches have a much more decentralised structure and cannot therefore say, "We are a church with 3,000 members." Might there be a problem for those people to qualify under the designation of being one organisation with 3,000 members, whether they are Christian or whatever? I am not sure how organised the other faiths in the country are.
As far as we can see, the "designated religious charity" status relates mainly to accounting provisions. There are no faith communities in Scotland, outside the Christian faith, that would currently qualify. They would meet the first three criteria, but none of the other faith communities in Scotland at the moment would meet the criterion of having a centralised internal structure. However, given that that is not about the designation of a religious body, but about accounting provisions, it is not of particular concern to our membership.
I am not terribly comfortable with the designation. It feels like one law for the rich and another law for the poor. How often have we heard about self-regulation over the past few years? It has not always worked. I would have thought that there should be one piece of legislation that applied to all charities.
I appreciate that point of view, and I have tried to address that in my written submission. One could take the view that if it ain't broke, don't fix it. The law has been in effect since the 1990s, and I am not aware that there have been complaints or that the Scottish Charities Office had any particular concerns about the mechanisms of self-regulation that are in place. If there were concerns, the status could be removed and that would open up the charitable body to full regulatory control.
I have tried to ask several witnesses about this, including the bill team. Designation as a religious charity seems not only to offer self-regulation, but places some constraints on investigations when there is a suspected problem. If a regulator does not have access to the information, how do they know whether there is a situation in which they need to intervene? It also seems insufficient to say that designation can be withdrawn, as that is simply an additional hoop that the regulator would have to go through—an additional test that would have to be met in order to regulate effectively.
From my reading of the legislation—and this reflects the 1990 act—I would say that there are no constraints on the regulator in carrying out inquiries on a designated religious body. The provisions are just the same as for other charities, as far as investigation and making inquiries are concerned. Your question relates to the list of charitable purposes. I do not think that I could put it better than it was put in "Private Action, Public Benefit", which was the review of charities that was produced by the Cabinet Office. That document says:
I am not proposing to withdraw it as a charitable purpose; I am asking why it, rather than other charitable purposes, of which we could find advocates, qualifies for special status.
The advancement of science is also going to be one of the charitable purposes.
But there are no designated scientific charities.
I am sorry. You are asking about designated religious charities.
And their exemption from rules on governance that apply to the rest of the charity field.
I understand why you approach the issue from that point of view. However, as I say, the 1990 act was probably a compromise on how to square the circle regarding the position of the Church of Scotland's constitution, but still produce something that was fair to other religious bodies. The Church of Scotland would not want to have special privileges that other religious bodies did not have. Such privileges could be justified because they would be given only to those religious organisations that could show that they had adequate supervisory and disciplinary systems and structures in place.
I understand the case that you make but it seems to me that many large and well-established charities would be able to show that they had procedures to ensure that disciplinary matters were dealt with properly and to ensure accountability and transparency. Indeed, I would think it inappropriate for charities over a certain size not to have such procedures. However, we do not then say that they should be exempt from regulations. They receive the benefits of charitable status; surely they should come under the same regulations as others.
Perhaps you will receive submissions from other bodies to suggest that they would like to have a provision such as this one. I note that a provision has been included for registered social landlords which, in effect, takes them out of the bill. I presume that that has been done because they are considered to be able to self-regulate.
Do other panel members have views on this issue?
My understanding is that this is less about a special privileged status and more about avoiding a duplication of effort. Just because the status has been in place for a long time is not an argument in itself, but the status has indeed been in place for a long time and there have not been any problems with it. The issue is less about lower thresholds for designated religious charities and more about the format. Certain accounting standards will still be required, and people are obviously satisfied that the designated religious charities will meet those standards. It is simply a case of accounts being in a different format.
Proven to their own satisfaction.
Your question is really to do with charitable purposes and the advancement of religion. As I have suggested, if "or belief" is added, you bring in 28 per cent of the population that are otherwise excluded. I would see that as being the advancement of morality and ethical behaviour. There would be more credibility if "or belief" were added.
It is my understanding that the Humanist Society already has charitable status.
Yes, it does.
What is being suggested is perhaps simply a recasting of the list, rather than anything more radical.
When one reads the list from a humanist perspective and sees "advancement of religion", one has to pause and think about that. On balance, that probably should be there. If we include belief in that context of morality and ethical behaviour, then I think that it should stay.
I understand that Linda Fabiani has some outstanding issues relating to spiritual and moral benefit. As we have discussed that at some length, I ask you to restrict your question—
Yes, I will be quick: this is for my own benefit—not my spiritual or moral benefit, I hasten to add, but for clarification. We spoke about the subject earlier and I understand Vanessa Taylor's comments about lawyers making definitions, but that is hard to do in this area. In a sense, there is an issue around changing from "spiritual or moral" to "ethical or moral", but how do we define or measure those things? Who should define or measure them? Is it feasible to define or measure subjective things in legislation?
The worry of the Scottish Churches Committee was that, if there was no reference to such criteria in the bill, there would be no signal to OSCR to take them into account. Speaking as a lawyer, I find this matter very difficult. How much do we put into the bill and how much do we leave out? That brings me back to our committee's view that it is too radical to start completely from a clean sheet. We need some help with this.
I do not know to what extent I can answer the question. I do not know how feasible it would be to make such definitions and in what sort of language they could be spelled out. As it stands, the bill gives us some concerns, because we would not be confident that spiritual or moral benefit would be taken into account. There would need to be some statement of clarification along those lines. There could also be recourse to case law, which might help to clarify things.
Linda Fabiani asks a very good question. I am reminded of the Social Work (Scotland) Act 1968, which I think contained a section to "promote social welfare", which was seen as a very laudable intention. That is one of the reasons that I am sitting here, in fact—I came from Northern Ireland to Scotland largely because of that provision in the 1968 act, and I am very glad that I did. If something could be included in the bill to encompass the promotion of social welfare, what would be wrong with that? That is not included in the list.
What I am getting from you all is that the wording "spiritual, moral or ethical" is not in itself precious, and that it signifies more of an intent. Would that be fair?
Yes.
Yes, although I am not terribly keen on the word "supernatural".
No doubt we will come to that.
It is on the second page of my supplementary submission. I appreciate that the committee is at stage 1 of its consideration and I am happy to return with the suggestion at stage 2.
We are at stage 1, so we are considering only the general principles of the bill. I am sure that your suggestion will prove useful and we may consider it at stage 2.
Chapter 9 deals with charity trustees. I think that we have some sympathy for the points and concerns that the SCC raises in its submission on the subject of the duties of trustees under section 65. Section 68 details the circumstances under which a person would be barred from being a charity trustee. Given that mismanagement is now subsumed under the definition of misconduct in section 103, is it inappropriately harsh to say that someone could be removed from being a trustee if they were guilty of mismanagement?
It could be. A lot would depend on the circumstances. The bill introduces a number of duties that charity trustees will have to remember; there are a number of things that they will have to submit if they are to go on to the register. I take the view that an inadvertent breach should not normally, of itself, lead to either suspension or disqualification. That should not happen unless the breach has been persistent or continued despite efforts from OSCR by way of training, coaxing and help, or if it has been of such a nature that severe danger could result to the property or assets of the charity.
The conflation of mismanagement and misconduct is a serious issue. For lay people like me, the two words have completely different meanings. Whereas mismanagement can be seen as a muddle, misconduct is seen more as a fiddle—it is more sinister and deliberate.
The concept that is required is one of competence. Before the establishment of the care commission, an area of work with which I was involved, the people who ran old people's homes or children's homes had to demonstrate against a set of criteria that they were fit persons to do so. People knew what was expected of them and the criteria against which they would fail.
You are opening up a new concept. Although there is training for volunteers in the voluntary sector and charitable organisations, it is not part of the bill.
Absolutely. I am pleased to say that we have very few cases of office-bearers running off with money, but we can never be complacent about such things. However, there is a theoretical aspect to the question. There was, for example, a high-profile case, which I think goes back to the last time the general assembly went into private session a number of years ago, in which there were applications from two individuals who wished to train as ministers in the Church of Scotland. One had a conviction for murder and the other had a conviction for embezzlement, having been a bank manager. Obviously it was necessary to try to test and judge their call and whether they had put their past behind them and were fit and proper persons to train to be ministers. The minister has a key role as he is a charity trustee. If we had to turn round and say to people in such a situation, "You cannot become a minister of word and sacrament because you would not qualify as a charity trustee" we would see that as the state interfering in office holding in the Church of Scotland.
We will probably have further discussions about that. I would welcome further information on this part of the bill. I do not see conflict. The general public want us to ensure that charitable organisations are regulated and that they can trust the people who are involved with using their money for good causes. I do not know that there is such a big gulf between your position and what is proposed in the bill.
It was always said that, traditionally, churches raise money from their members; they do not fund-raise from the public. However, society changes and many congregations are going into partnership with other bodies and attracting other charitable funding. Our committee therefore accepts the increased requirements in relation to monitoring that will be put on congregations. Congregations will have the same obligations as other charities to produce their accounts and send them to OSCR along with an annual return and to answer any reasonable questions that OSCR might have about them. That exercise will produce a situation whereby any financial irregularity would immediately come to light, OSCR would intervene and the church body concerned would put its house in order. If it failed to do so, it would lose its designated charity status and would be reduced to the same status as everybody else.
I want to follow up on the issue of disqualification. My question relates to the dual role of an individual being both a trustee of a charity and an employee of it; I have some general concerns about that. You mentioned the possibility of someone being disqualified because of the designation, although that would be fairly unlikely. Are you saying that it would not be possible for the Church of Scotland to organise its affairs in such a way that someone could be employed as a minister without being a trustee of the charity?
That would not be possible. I think that the same would be said for other religious organisations. Ministers of religion and priests play a crucial role in the administration and the running of the charity.
It would not be possible for them to do the ministry but not the administration.
There might be those who would like to remove, for example, all ministers from the General Assembly of the Church of Scotland, but it might become a quiet affair. It is simply the way in which church bodies are constituted. I am afraid that they are not the same as other charities in that respect: their structures are very different. That is the way that it has aye been. The Church of Scotland would not be very happy if it was suggested that it should totally reorganise its structures to take the bill into account.
Everybody else in society has to.
We have, understandably, concentrated on the Church of Scotland, on Christian churches and on the humanists. Can we confirm that other faith communities have had an opportunity to make representations to us directly or through the Scottish Inter Faith Council? Have any specific points been raised by the Muslim community, Jewish people or other faith communities?
In relation to a specific aspect of the bill?
Are there any general points to do with the bill that we need to be aware of?
On most points, we would have concerns similar to those that have been expressed by the Scottish Churches Committee. One area in which we would have a specific interest would be the definition of religion. That definition should be as inclusive as possible and should not exclude multideity or non-deity religions. I do not think that anything specific has come up that has not been covered in some way.
But it is open to anybody else to make representations.
Yes, absolutely.
I thank the witnesses for their attendance, which is much appreciated. We are also grateful for the written submissions from the Scottish Inter Faith Council and the Scottish Churches Committee in advance of the meeting. I am sure that they gave us all some food for thought last night.
Meeting continued in private until 13:18.
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