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10th September 2013

Independent schools required to consult before merging...

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The Charity Commission has been developing its policy on charitable independent school mergers in recent months, following one or two particularly fraught experiences.

The Charity Commission has been developing its policy on charitable independent school mergers in recent months, following one or two particularly fraught experiences. Those experiences have shown them the strength of parents’ objections can in some (rare) cases severely undermine a merger, causing much anxiety and cost for those concerned. Their policy now is therefore to request consultation with parents rather than keeping the proposals discrete until an announcement is made. Traditional wisdom for schools merging has been it is better not to make an announcement to parents until the merger is agreed, so a position of certainty can be presented. Disclosing earlier than this risks parents withdrawing their children if they are concerned at the merger, thus affecting the school’s stability and finances. One very difficult merger, where we advised schools group United Church Schools Trust, concerned a school in Lytham St Anne’s, Lancashire. A parents’ group in one school strenuously campaigned against the merger, meaning delay, an extended Charity Commission involvement and an appeal to the Charity Tribunal. Although ultimately the merger went ahead the experience was very painful. This has lead directly to the Commission’s revised approach. The Commission is not in a position, legally, to insist on parental consultation as such in any merger and it will not have an opportunity even to voice an opinion in some cases. Elements of some mergers require a form of public notice under the Charities Act but this is not the same as parental consultation. Some do not need the Commission’s involvement at all. However, where the Charities Act public notice is required there might just as well be parental consultation; so too if ‘TUPE’ consultation is required where staff are transferring from one body to another. In these situations of course parents will become aware of the proposals. The usual merger situations include: Those which need the Commission’s involvement and those which don’t: the Commission’s authority is usually needed where the objects or powers of one charity will not allow for the merger in the form desired, or where property restrictions need to be overcome Those which need public notice to be given under the Charities Act and those which don’t: the disposal of land designated for particular purposes and the making of a scheme to allow for the merger of an unincorporated charity both require public notice unless waived by the Commission Those which are subject to TUPE Regulations and those which are not: if staff transfer from one body to a successor, TUPE will apply, whereas if staff remain in the same body which then comes under the control of another, TUPE will not apply. Where the Commission is involved they now apply pressure to require that parental consultation is undertaken. As mentioned above, there is no general legal requirement for public or parental consultation, although we have not yet tested, by refusal, the Commission’s request for consultation. Two examples of recent school mergers where we have advised will illustrate the effect of the new approach: One school sought to merge with another, which had a land charity governed by a scheme which needed to be changed to allow the merger. The scheme needed the Commission’s involvement and also public notice to be given. The Commission asked that the schools undertake parent consultation, which they were happy to do. Having done so, no separate public notice was required by the Commission regarding the scheme. Two schools, both run as companies, sought to merge by one becoming the subsidiary of the other. There was no need to involve the Commission and as all staff were to remain in the employment of the same bodies, no TUPE consultation was required either. The schools decided to announce to parents and staff at the same time, once the merger was complete. The Commission had no opportunity to require parent consultation and so far as we are know remain unaware of this merger at present. Schools should therefore consider this new approach carefully when contemplating a merger, seek advice as to whether Charity Commission involvement will be needed and think through the options regarding consultation. If you have any questions on school mergers, please contact Chris Knight on 01604 463103 or