Loretto School charity status at risk over access

Loretto School risks losing its charitable status over access. Picture: TSPL

The Office of the Scottish Charity Regulator (OSCR) said Loretto School in East Lothian had “insufficient measures” in place to widen access for pupils from poorer backgrounds.

The regulator said a further eight schools had passed the test and would keep their charitable status, which allows for tax breaks and rates relief.

Loretto charges more than £19,000 a year for senior day pupils and up to £28,590 for boarders. The OSCR investigation found that in 2012-13, 91 pupils – 14.7 per cent of the school roll – received means-tested support. The value of the support was £756,210, equivalent to 6 per cent of the school’s income.

However, the majority of the remissions were “low value”. Only one child, a lower sixth form pupil from Eastern Europe, received the full cost of fees.

Non-means-tested discounts benefited 338 pupils in 2012-13, with the value of the awards totalling £1,452,181. This represented 58 per cent of the school roll and 14.7 per cent of the school’s available income.

The Musselburgh school now has 18 months to convince the regulator it has done enough to comply with its tests.

In 2011, four private schools – Hutchesons’ Grammar in Glasgow, Merchiston Castle in Edinburgh, Lomond School in Helensburgh and St Leonards in St Andrews – were allowed to keep their charitable status after a three-year investigation by the regulator. The OSCR said the probe had “significantly” widened access to the schools.

About one in 20 children in Scotland is educated at private schools, although the Edinburgh figure is closer to one in four.

The latest eight schools to pass the regulator’s test are Lewis Independent Christian School; Mannafields Christian School, Edinburgh; Moray Steiner School, Forres; Compass School, East Lothian; Lathallan School, Montrose; Hamilton College; Albyn School, Aberdeen and The Glasgow Academy.

Earlier this year, four other schools faced losing their charitable status unless they made their fees more affordable for families with lower incomes.

Fettes College – where former prime minister Tony Blair studied – and St George’s School for Girls, both in Edinburgh, and St Columba’s School in Inverclyde failed the “charity test” in January. Four months later, Wellington School in Ayr, whose former pupils include violinist Nicola Benedetti, failed the same test.

They were given 18 months to make their fees more affordable for less well-off youngsters or face losing their status, without which they could be forced to increase fees for other pupils.

Martin Tyson, the OSCR’s head of registration, said: “As regulator, we must ensure that charities provide public benefit as set out in the legislation.

“We have now established this process as part of our ongoing work. Of the decisions announced today, eight schools have satisfied us that they provide a sufficient level of public benefit. Our experience to date is that, where we have issued directions to widen access, the schools have taken the necessary steps to comply and thereby retain charitable status.”

Jonathan Hewat, Loretto’s director of external affairs, said: “Although OSCR acknowledges the valuable public benefit Loretto School already provides, they have identified improvements that they wish to see implemented.

“We are naturally disappointed by this outcome but strongly believe that, by working with OSCR, we can satisfy the requirements of their charities test within the prescribed timescale.

“We are looking carefully into OSCR’s report with a view to meeting the charity test as soon as possible.

“We shall continue to perform our main charitable function, which is to provide an excellent education for boys and girls. We are committed to providing means-tested bursaries whenever we can, and we shall continue to increase this support to families who need it most.”

John Edward, director of the Scottish Council of Independent Schools, said: “There’s no reason to believe that Loretto is not doing enough to justify its charitable status. It’s just a matter of some small directions being given.”

Prized status brings benefits – but there are tests to be passed before schools qualify

charitable status gives private schools a range of benefits, including exemption from corporation tax and an 80 per cent reduction on their rates.

As charities, they are also eligible for Gift Aid, which is money they can claim from HM Revenue & Customs on donations.

To qualify, they must pass the charity test, as defined in the Charities and Trustee Investment (Scotland) Act 2005. It sets the standard that all charities must meet in providing public benefit.

Where there are conditions on the public gaining access to the benefit, such as fees or charges, charities must take steps to ensure these are not “unduly restrictive”.

Earlier this year, the charity regulator said it would continue to investigate “priority groups”, including schools that restrict access to benefit on the basis of fees; charities that restrict access to benefit to those on the basis of characteristics under the Equality Act 2010; UK-based charities operating outside the UK, and charities established and operating outside the UK.

200 years of teaching and just a bit of controversy

ONE of Scotland’s most famous private schools, Loretto’s origins go back to the 1820s, when the Rev Thomas Langhorne began offering private tuition to the boys of Musselburgh, writes Chris Marshall.

It claims to be Scotland’s oldest boarding school and counts former chancellors Alistair Darling and Norman Lamont, late Formula One driver Jim Clark and broadcaster Andrew Marr among its former pupils.

Girls first joined the school’s sixth form in 1981 and it became fully co-educational in 1997.

In 2012-13, the senior school had 438 pupils, 170 of whom were day pupils and the rest boarders. There is also a junior school and a nursery. The school has its own golf academy.

Fees range from £4,680 to £6,480 a term for day pupils in the senior school, while boarders pay between £5,260 and £9,530.

The charity regulator’s report found only 14.7 per cent of pupils received a means-tested bursary. Seventy-nine of 91 pupils receiving means-tested support in 2012-13 were awarded bursaries totalling 40 per cent or less of their fees.

The school also offers non-means-tested support in the form of scholarships and discounts to families with more than one child at the school or those from army backgrounds.

Earlier this year, the school announced headmaster Peter Hogan was to step down after five years in the role.

He caused controversy when he accused Edinburgh University of discriminating against children from fee-paying schools as part of an experiment in “social engineering”. He said some of his pupils had been rejected on “academic grounds”, despite having been accepted at higher ranking universities, including Cambridge.

In 2010, admissions director Fiona Gordon was awarded more than £8,000 after suing the school for alleged sex discrimination. She claimed Mr Hogan had threatened her with redundancy when she told him she would be going on maternity leave. She later returned to the school.

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