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Get-out clause on test of charitable status

The group leading the review of further education is proposing that ministers retain their powers to intervene in the affairs of colleges.

Ministers are now considering an issue that has grown more complicated because of the new charities legislation, which embraces colleges and universities.

Under the act, a body will fail the charities test if "its constitution expressly permits the Scottish ministers or a minister of the crown to direct or otherwise control its activities".

This test of independence is therefore at odds with the existing interventionist powers for ministers, established under the 1992 Further and Higher Education (Scotland) Act.

To avoid failing the new charities test, however, ministers can introduce a parliamentary order to "disapply" the new charities rule and this is what the review group has recommended, on the basis that the existing powers are not directed at the charitable activities of colleges.

The working group on college accountability and governance concluded, and the lead review group endorsed its view, that "there was a need for ministers to retain their powers of direction for reasons of public accountability and because they remain useful in extreme circumstances, as alternative action that involved the withdrawal of funding could seriously impact on the day-to-day running of a college and would impact adversely on students and staff."

These powers are wide-ranging and allow ministers to set up, merge or close colleges, change a college's name, issue a mandatory direction to a college board and remove board members where there has been mismanagement.

The Association of Scottish Colleges is taking a relaxed position. Neil Cuthbert, its policy adviser, said that the association wants colleges to retain charitable status. "If this can be achieved without altering the current structure of accountability to Scottish ministers, ASC is happy with that.

"If some of the current powers of Scottish ministers have to be removed to retain charitable status, then we are also fine with that. The priority is that colleges remain Scottish charities."

Charitable status is worth an estimated pound;15 million a year.

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