By Grant Smith, education reporter, and Cheryl Wood

THE HEADMASTER of St Leonards School in St Andrews yesterday said he was “greatly disappointed” by a ruling that will end its charitable status unless it improves access for children from poorer families.

Dr Michael Carslaw said the school, which charges boarding fees of up to £23,000 a year, had already cut the charges for day pupils and offered means-tested places for pupils who would not otherwise be able to afford a private education.

St Leonards was one of four schools to be ruled against by the Dundee Office of the Scottish Charity Regulator (OSCR), which has been looking at various charities to see if they provide a public benefit.

They will now have to come up with plans for widening access if they want to retain valuable tax exemptions.

Chief executive of the OSCR Jane Ryder said, “In the case of the four independent schools we concluded that the public benefit test was not met, mainly due to significant fees and the fact that there was not sufficient help in place so that those who cannot pay the fees can also benefit from what the charity does.

“We are not dictating a particular business model to the charities and there are different ways in which they can address our concerns.

But we are looking for an early acknowledgement of the intention to introduce changes and for implementation within a reasonable time period.”

The schools have each been told they have 12 months to produce a plan that shows how they will improve access arrangements.

They also have three months to decide whether or not to comply with the order.

St Leonards has around 450 pupils aged five to 18 and it charges more than £9800 per year for day pupils attending its senior school and sixth-form college, rising to more than £23,000 for boarders. Its gross income in the year to August 2007 was £5.1 million.

Dr Carslaw said in reaction, “St Leonards is established as a charity for ‘the advancement of education for the public benefit’ and it is my intention that this remains the school’s objective.

“It is disappointing that providing a high quality of education is, in itself, not judged to have sufficient public benefit.

“I respect the OSCR assessment but I am disappointed not yet to have been given an explanation for it. When we have an understanding of what needs to be done, we will do our best to fulfil any reasonable obligation.

“However, during the period of their investigation, which has been going on for over a year, OSCR has been neither clear nor particularly forthcoming in explaining where the bar is set.”

He insisted that the continued success of St Leonards was not in doubt and while he would prefer to keep the school on the charities register, the financial implications of not passing the public benefit test were minor, mostly relating to partial relief on rates and corporation tax.

Dr Carslaw added, “St Leonards has taken great strides in increasing access to a top-quality education. We have a successful assisted places scheme for boys and girls who would benefit from a St Leonards’ education and whose parents are unable to afford the fees. It is disappointing that this was not recognised as adequate by OSCR.

“Day fees were significantly reduced in 2005 by, on average, 30% precisely to increase opportunities for access and fee remissions are provided on a means-tested basis.

“The social mix at St Leonards is wide and indeed broader than it has ever been.

“The international element brings a richness and diversity that is absent in many schools.

“We paid close attention to Dundee High School’s submission in 2007 and felt that St Leonards—a different kind of school in many ways, albeit with a similar day fee—matched nearly all the aspects of the public benefit provided by our near neighbour.”

Development manager of the Scottish Parent Teacher Council Judith Gillespie said, “I’m glad the charity law is being applied.

“The new charity regulation is, on the whole, welcome. It offers people some degree of confidence that a charity means a charity and it’s not just a way of not paying taxes.”

Conservative MSP for Mid Scotland and Fife Ted Brocklebank described St Leonards as one of the best schools in Scotland.

He said, “It is essential that it should continue to receive the optimum amount of funding to deliver on its record.”

Referring to all four schools affected, he said, “I have no doubt they will respond in a positive manner and that they will be able to deliver further benefits in the future.”

North East Fife MSP Iain Smith said he would be seeking clarification from the OSCR as to why some private schools had met the public benefit test and others hadn’t.

He said, “Whilst it is right in principle that private schools should show that they have a charitable purpose and that they provide a public benefit before they qualify for the benefits of having charitable status, it is also important that these tests are applied in a transparent and consistent fashion by the regulator.”

The area’s MP Sir Menzies Campbell said he was disappointed with the OSCR decision but confident the school would keep its charitable status.

He said, “I have had regular contact with the school since becoming an MP and have no doubt whatsoever about the enormous contribution it makes to education and the local community.”

The Scottish Council of Independent Schools (SCIS) said it was “delighted” that most of the 10 schools under scrutiny— including Prince Charles’ old school Gordonstoun—had passed the test. The High School of Dundee was one of the first to be tested last year and its charity status was also confirmed.

However, council director Judith Sischy said she was disappointed that St Leonards, Hutchesons Grammar in Glasgow, Merchiston Castle in Edinburgh and Lomond School in Helensburgh had all failed the test.

She said, “The schools are keenly aware of their responsibilities as charity trustees and will be giving careful consideration to OSCR’s recommendations.

The SCIS reckons that its members provide £17.5 million of assistance to parents, providing reduced fee places to about 13% of the 32,000 pupils they educate.

In all, 30 charities were assessed, with the majority passing, including the Scottish Fisheries Museum in Anstruther, and seven other fee-paying schools.