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During his
report to Council’s July 2004 meeting, the Vice-Chancellor alerted members to
the possibility of the University losing its ‘exempt charity’ status. That possibility has become much stronger in
the intervening months.
The University
has charitable status by virtue of the Charities Act 1993 and there is no
suggestion of losing it entirely. But
its status as an exempt charity means that it is not regulated by the Charity
Commissioners; insofar as regulation for this purpose exists at all, it is
carried out by HEFCE.
The Charities
Bill proposes that universities lose their exempt status and become regulated
in the same way as other charities.
However, it seems highly likely that the regulation will be carried out
by HEFCE and not the Charity Commissioners.
Opinions
differ on whether such a development should be welcomed or not and how HEFCE
might proceed. The main advantage of
HEFCE is its knowledge of how universities work and its remit to encourage them
towards best practice in such areas as corporate governance, value for money
and the like. But HEFCE acting as
regulator is also seen as being in potential conflict with its role as funder
of universities and its remit to deliver the Government’s agenda through the
institutions it funds. The Charity
Commissioners, whilst more independent than HEFCE, are unlikely to be as much
in sympathy with universities’ objectives and practices.
Assuming HEFCE
does become the regulator, the pinch is likely to come when activities not funded by their grants are
reviewed. HEFCE may feel obliged to
apply the ‘public benefit’ test to all our activities, however funded. Some activities in the intellectual property
area seem likely to be questioned, along with some of the more entrepreneurial
activities of some departments, despite the fact that another arm of Government
is actively encouraging them. Since our
endowments are not large, inspection of their use will not be the worry it is
for some older institutions.
We will
monitor developments as the new Bill proceeds through Parliament.