Royal charter status for IoTs needs more detailed thought

6 Feb 2022, 6:00

Royal charter status is not the quick win it at first appears, writes Mark Taylor

The levelling up white paper sets out the government’s plans for successful institutes of technology (IoTs) to apply for royal charter status.

In May last year I commented in this newspaper on the then newly published skills bill. My conclusion was that, while it was welcome news that the FE sector was being given prominence and the promise of better funding, there would be a number of legal and governance issues to work through during implementation. 

I now find myself coming to the same conclusion on plans for IoTs to have royal charter status.

What is a royal charter?

A royal charter is effectively the constitution of a royal charter corporation, in the same way as a further education corporation has an instrument and articles and a company has articles of association.

This means that a royal charter corporation is a separate legal entity (pay attention, that will be important later). 

As you could probably tell from the name, a royal charter is granted by the Queen.

What is the advantage of a royal charter?

The levelling up white paper speaks of putting IoT’s “on the same level as our world-leading historic universities”. The Privy Council Office speaks of royal charter status being a “prestigious way of acquiring legal personality and reflects the high status of that body”. 

So you can see that this is about status and prestige. Having a royal charter can be important because it looks important. It would be easy to scoff at this, but it can genuinely be a useful tool for a body in attracting business (or learners) and working with collaborators (or employers, in this instance).

Royal charter corporations have very wide powers and are subject to less regulation than other types of legal entity. This is all very exciting for a lawyer like me, but it does not make a big difference in the real world.

What issues need to be considered?

The levelling up white paper explains that more detail will be given in the spring on how to apply for royal charter status. 

Here are the issues which I will be looking out for:

You will remember that a royal charter corporation is a separate legal entity: it is a legal thing. Many IoTs (and well over half of those on which I have advised) are not legal entities at all. Those IoTs are set up as a contractual collaboration between colleges, universities and employers. For those IoTs to apply for a royal charter, their model would need to be completely rewritten. This would require planning around contracts, governance, tax and procurement.

Their model would need to be completely rewritten

2.         Who will control them?

Nobody owns a royal charter corporation. Would the institutions that have set up an IoT be willing to set up a body that is very much independent of them? This would present an issue for institutions, particularly if the IoT were to act in competition with the college or university.

3.         IoTs would need to comply with more rules

IoTs do not currently deliver education, they act as a funding and branding mechanism for the individual colleges and universities to themselves deliver education. If that is to change, then IoTs would need to comply with relevant funding rules, for example, around the register of apprentice training providers (RoATP), Office for Students registration and subcontracting rules.

4.         Give colleges royal charter status?

If royal charter status brings the benefit of prestige to the IoT, then what about its members (such as further or higher education corporations) which do not have that status? It could be argued that it would be simpler and would have more effect to give royal charter status to more colleges and universities.

5.         Time and money for applying

Achieving a royal charter is not simple. The application process can take some time, it is not certain to succeed and it would incur cost. Only around half a dozen new royal charters are granted each year.

Any focus on, or funding for, technical education is to be welcomed. Royal charters for IoTs could give the sector a real boost, but this is not the quick win which it may first appear to be.

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