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Charity status of colleges
21/05/2008
An order has been laid in the Scottish Parliament - expected to come into force later this year, subject to Parliamentary agreement - to protect the charity status of colleges.
First Minister Alex Salmond announced the move today during a visit to John Wheatley College in Glasgow.
It follows a review last year of the College by the Office of the Scottish Charity Regulator. The review found that Ministerial powers to direct further education colleges were inconsistent with the requirement that charities should operate independently of government. This meant that, without action by Ministers, colleges would lose the right to charitable status.
The First Minister said:
"The Scottish Enlightenment produced some of the greatest minds in Europe and beyond. It was a period characterised by reason, learning and modernisation. I want Scotland to open up to new ideas again, allowing rapid social and economic growth to drive us forward.
"This Government is dedicated to developing a wealthier and fairer Scotland. These two principles require two key conditions - an education system that fits with economic strategy, and an education system that can be both inclusive and sustainable. To achieve these conditions, the Scottish Government needs to be able to keep further education in line with the needs of business and growth, while allowing colleges to maintain the charitable status that allows them to deliver.
"Today's order is aimed at doing just that. By allowing colleges to get on with their crucial work we can improve the educational and life opportunities for current and future students.
"This move to support colleges, together with policies such as the scrapping of graduate endowment, will help lay the intellectual foundations for the modernisation of Scotland."
Howard McKenzie, Acting Chief Executive of the Association of Scotland's Colleges said:
"In December last year I wrote to the Scottish Government asking for a special case to be made for Scotland's Colleges under charities law. ASC will support any measures presented to Parliament which retain the charitable status of Scotland's Colleges. Continuing charitable status will ensure Scottish students, businesses and communities will continue to benefit from the high quality public services offered by Scotland's Colleges."
The Charities and Trustee Investment (Scotland) Act 2005, which came into force in April 2006, introduced a new statutory definition of a charity in Scotland as a 'body entered in the Register' - i.e. on the Scottish Charity Register.
Scotland's 39 incorporated colleges are currently registered as charities and are required to meet the charity test set out in the 2005 Act. However, section 7 of the Act states that a body does not meet the test if its constitution permits Scottish Ministers or a Minister of the Crown to direct or otherwise control its activities.
While colleges are independent of Government in their day-to-day activities, the Further and Higher Education (Scotland) Act 1992 gives Scottish Ministers the ability for example to alter college constitutions or amend college powers. OSCR has indicated that it considers that this constitutes Ministerial control.
Today's order makes use of powers given to Ministers in the Charities Act to exempt colleges from the standard requirement that a charity must operate free of Ministerial control.
There is also a potential risk to the charitable status of post-1992 universities due to Ministers' powers in section 47 of the 1992 Act to close such institutions. On May 14 the government laid an Order to solve the problem where it arises by making any closure subject to the agreement of the governing body.