My name appears in support of this amendment. I echo the words of the noble Lord, Lord Campbell-Savours, about the proposer of this amendment and all that he has done for us in the pre-legislative scrutiny committee and the previous Committee stage of this Bill.
I spoke about this aspect of the public benefit issue during Second Reading. The fee-paying question comes to a head with the charities that provide education, as was demonstrated by the discussion between Members of the Committee this afternoon. In Second Reading I stressed, on the one hand, the value of educational provision by independent bodies in the voluntary sector—that is, not in the public sector, nor in the private sector. But I also stressed that if voluntary bodies register as charities, they have an obligation to demonstrate that their work does not—to quote the fourth principle indicated by the court in the case of the famous Re: Resch—““wholly exclude poor people from any benefits, direct or indirect””.
In the case of independent schools, charging fees does not of course mean that the operation does not operate for public benefit. Lots of other charities charge fees for services, but a line is drawn when a charity’s work confers absolutely no benefit on the wider society.
I am keen to see sustained the delicate balance that we have created. I hope that that delicate balance, to which the noble Lord, Lord Hodgson of Astley Abbotts, referred, will be maintained as the Bill moves through its next stages. But that requires that delicate balance to be reinforced by an amendment along the lines of the one before us.
In discussing the matter during the Second Reading debate, the noble Lord, Lord Dahrendorf, spoke eloquently for civil society and for the role of the voluntary sector to be supported for its intrinsic value, even when it was not doing good works or benefiting the wider community in a very obvious way. Accordingly, he commended a very broad definition of ““public benefit””. While I fiercely support him in his advocacy for a strong, independent and even anarchic third sector, a distinction must be drawn between those voluntary bodies that do not seek the fiscal privileges and tax concessions that go with charitable status, and those that do. If a voluntary organisation makes a commitment to become a charity and claims its financial rewards, even if those are a relatively small part of its total income, the nation’s taxpayers are entitled to some return on their investment.
Meanwhile, schools outside the maintained sector can be set up as purely private businesses. We know that private sector provision of education is growing. The former Chief Inspector of Schools, Chris Woodhead, has established one such private company, Cognita, launched with funds of £475 million. The Independent Schools Council has drawn attention to the dangers that these purely commercial schools will bring if they ignore local communities. Chris Woodhead has made clear that partnerships to help state schools will not be part of the remit of his new schools. This is where the difference lies between a charity and private sector profit-making companies. Those independent schools that accept the advantages over the commercial position faced by purely private education companies must also accept some duties toward the wider community.
In the field of health, some of the same considerations apply. BUPA is not a charity but a mutual society; Nuffield hospitals are a charity and they get the benefit from that status. In return, some public benefit will need to be demonstrated if the good name and integrity of charity is to be preserved. All that seems to mean that the Charity Commission, in its consultations on public benefit, needs to consider the basis for the delicate balance that we have achieved so far, and to sustain it. That would seem to mean looking with particular care at the position of charities that charge high fees for their services. I support the amendment.
Charities Bill [HL]
Proceeding contribution from
Lord Best
(Crossbench)
in the House of Lords on Tuesday, 28 June 2005.
It occurred during Committee of the Whole House (HL)
and
Debate on bills on Charities Bill [HL].
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673 c163-5 
Session
2005-06
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