Akme scholars will already know of my exchanges in 2009 with the Charity Commission (CC) and the Public Administration Select Committee (PASC), the government committee responsible for overseeing the workings of the CC and the implementation of the 2006 Charities Act with its new 'public benefit' requirement. (See, for example, Called to Ordure. On the university presses, see Akme's palpable hit #2 - Touch me Minky - Please Touch me Minky etc.).
I have previously posted a letter I received from the PASC dated 30th April 2009 summarising the charity law position of the Oxbridge universities, colleges and university presses under five bullet points. Points 1 and 4 stated:
"Oxford and Cambridge Universities are both categorised as exempt charities in terms of Schedule 2 to the Charities Act 1993, and as such they are not required to register with the Charity Commission... From October [2009], Oxford and Cambridge Universities will be required to apply to the Charity Commission for registration (the exemption is being removed)."Points 4 and 5 continued:
"At that point [once the universities have registered], the [Charity] Commission will consider each organisation within the universities (the colleges etc) individually to decide if they are a part of the university or a separate entity. If they are separate entities they will need to meet the public benefit requirement; if they are part of the universities they will be considered as part of the overall public benefit assessment [of the university]. University presses will also be covered by this process."
Encouraged by these developments, in case there should be any argument or doubt about the separateness of the (Oxford) colleges from their university, I sent the Charity Commissioners and PASC members the affidavit sworn in my Seven Centuries of Mystery case of 2001/2 by the University Registrar David Holmes in which he stated, in doubtless reluctant defence of New College Warden Alan Ryan, that the college is "a wholly separate legal entity" from the university.
However, after the General Election of May 2010 and the accession of the Lib-Con coalition government, Dame Suzi and the Leatherettes (aka the Charity Commission) executed an humiliating backslide over the private schools' public benefit requirement (click for The Very Long Grass), so I feared there would be a similar weakening or dilution of the promised Oxbridge reforms. I therefore wrote again to the PASC to learn of any change in policy, receiving first a holding reply from the new clerk Clive Porro and then the letter below (transcription follows):
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Public Administration Select Committee
Andrew Malcolm
3 February 2011 Dear Mr Malcolm, I wrote to you on 22 November 2010. I am sorry for the delay in coming back to you. I have received the following reply from the Charity Commission: "Since the Committee last corresponded with Mr Malcolm, the changes to the Charities Act 1993 affecting the colleges and halls of the universities of Oxford and Cambridge have been brought into effect. As you may know this provides it has been determined that Oxford and Cambridge colleges are not part of the universities for the purposes of the Charities Acts. Accordingly they are applying to the Charity Commission for registration as separate charities, and we are in the process of registering them. In terms of the university presses specifically, it is our understanding that they fall within the exemption from registration that applies to Oxford and Cambridge Universities. They may be part of Oxford or Cambridge University, which themselves remain exempt so the question does not arise. If this is not the case it is likely that the presses are covered by section (w) of Schedule 2 to the Charities Act 1993 (as amended), which confirms that "any institution which is administered by or on behalf of an institution included above [in this case the university] and is established for the general purposes of, or any special purpose of or in connection with, the last-mentioned institution" is an exempt charity. We are aware of the litigation to which Mr Malcolm refers and we understand that the Court accepted that the Oxford University Press is a department of the University and not a separate legal entity. Given all of the above, we have no regulatory interest in the presses with regards to registration. We cannot register an exempt charity. Of course, in any case tax status is a matter for HMRC rather than the Charity Commission. I hope this clarifies the position." I trust this may be of assistance to you. Yours sincerely Clive Porro
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On the plus side, it seems from this letter that it has definitively been determined that the Oxbridge colleges are legally separate entities from their universities and are therefore obliged (for the first time) to register as individual charities and to provide demonstrable public benefit (or be taxed). Some colleges, I gather, have already registered (Downing, Cambridge and St Hilda's, Oxford were the first to do so, in August 2010).
With all the hoo-ha over the private schools, this potentially momentous development has gone largely unremarked in the national press, and its repercussions have as yet largely been unexplored. How, for example, will Oxford's studentless All Souls be able to demonstrate public benefit? And will we, the benefitted public, at last get to know the detail of the Oxbridge colleges' vast land and property holdings? Apocryphally, it is said that one can walk from one university to the other without ever leaving their colleges' land, and that one can walk from the Sussex coast to Cambridge's Trinity without ever leaving its land. Will we now learn if such tales are true? (Click for the Oxbridge College accounts index.)
On the minus side, the letter, without any mention or comment, flatly contradicts the PASC's and CC's undertaking that the universities' exemption (from registration) was going in October 2009 to be removed. Also it makes no mention of the 2010 announcements by the Higher Education Funding Council for England (HEFCE), which state:
Again, who was being lied to (sorry, misled) in 2009, and why? When and where was this fundamental change of policy (on exemption/registration) announced? Why does the PASC's recent letter not mention HEFCE's new role? Is the switch to HEFCE regulation a monumental backslide on the quiet, or will HEFCE yet surprise us all? And where does this leave the charity regulation (and public benefit requirement) of the university presses? Is the cow over the moon yet?
On this last, mad-cash-cow question of the presses' status, an uninitiate might infer from the PASC letter that the Charity Commission is no longer involved in the matter, but HEFCE itself says: "The HEIs are now subject to the Charity Commission's powers... The HEIs must have charitable purposes and apply them for the public benefit. They must comply with the general law of charity." HEFCE has a particular interest, of course, in maximising the universities' income streams, but as a government body it also has an obligation to enforce the fair trading rules (for both publishers and HEIs), and to uphold, as it says, charity and tax law. Is HEFCE now seriously going to start deciding which of OUP's and Macmillan's and Longman's (and Akme's) publications do and do not provide public benefit? Or is it going to toss the whole issue back to HMRC, as both of the PASC letters vaguely suggest? This would seem a reasonable move, given that it was the Inland Revenue which in 1976 (CUP) and 1978 (OUP) made its puzzling volte-face and exempted the two university presses from corporation tax, thereby creating the present anomaly and allowing OUP, perhaps inevitably, to become the UK's largest book trader.
I have lately pointed out to all the current PASC members (see below) that that momentous decision was taken: (a) contrary to charity law (book publishing is not a charitable purpose); (b) in contravention of the fair trading rules (commercial competitors are guaranteed "a level playing field"); (c) in contradiction of repeated high level IR refusals over the preceding decades; (d) in secret and without any public announcement; (e) without any consultation with, or even notification of, the Charity Commission; (f) at a period when, to use the IR's word, the presses' "poise" was far less commercial than it is today (OUP's annual profits currently exceed £100 million); (g) solely by an IR Charities Section official of uncertain rank Betty McRobert; (h) in opposition to her own earlier findings regarding CUP; (i) in the teeth of CUP's own express caveat about the ineligibility of Oxford; (j) without her taking any legal advice, even from the Inland Revenue's own solicitor; and (k) maybe as a result of simple bribery. I have invited the PASC members to state which of the four bodies (PASC, CC, HEFCE or HMRC) is now responsible for the presses' reappraisal. Watch this space jihardies, but don't hold your breath.
"From 1 June 2010, exempt charities will be monitored as charities by a principal regulator. They are also now subject to the investigation and enforcement powers of the Charity Commission, although the Commission may only exercise those powers following consultation with the principal regulator... On 1 June 2010 HEFCE becomes the principal regulator of those higher education institutions (HEIs) in England that are exempt charities... This is a new legal obligation, and our existing functions as the HEIs' main funder of higher education in England are not affected. This new responsibility results from the Charities Act 2006, which implements a government decision that all charities should be subject to regulation. Although they were expected to comply with charity law, exempt charities were outside the scope of the Charity Commission's regulatory powers. From 1 June 2010, the exempt charity regulation provisions of the 2006 Act came into effect for HEIs, and they are now subject to the Charity Commission's powers. In terms of their general operations as charities, there is no material difference between exempt and registered charities. Exempt charities must have charitable purposes and apply them for the public benefit. They must comply with the general law of charity."
Bernard Jenkin (chair), Harwich and North Essex (Conservative)
The PASC's own website @24/2/2011 is incorrect: Michael Dugher is no longer a member of the committee. |