In June 2006, England’s Charity Commission announced that, in their opinion, two private (ie fee paying) schools had failed the public benefit test set out in the Charities Act 2006.The Independent Schools Council has announced its intention to challenge the decision in the courts.

The Charity Commission set out its intentions of dealing with the new public benefit test:

“The Act underlines the requirement that all charities must exist for the public benefit, and the Commission has a new objective to promote understanding and awareness of this public benefit requirement… One size won’t fit all, and public benefit will look different for different groups of charities.”

Charities Act 2006 – a guide to the main provisions which affect charities (Version November 2006).

Here, there seems to be no argument with the rules, but rather how narrowly the Charity Commission is interpreting them. Parliament deliberately did not define “public benefit” and the Charity Commission also seems to be wishing to reserve a level of flexibility. The trouble with flexibility is that it creates uncertainty – especially with borderline cases.

When large amounts of public money is at stake, any doubt as to the legal status of an organisation will be costly.