St Margaret's Children and Family Care Society warning upheld
A warning that a Catholic adoption agency could lose its charitable status over its refusal to place children with same-sex couples has been upheld.
The Scottish Charity regulator issued the directive to St Margaret's Children and Family Care Society in January.
The Glasgow charity challenged the decision and requested a review.
Having done so, the watchdog said it found that the charity discriminates unlawfully and confirmed its decision to issue the direction.
The charity has until 22 April to comply with the Equality Act or it could be removed from the register.
St Margaret's in Glasgow was told earlier this year that prioritising those who have been married for at least two years discriminates against same-sex couples.
The Office of the Scottish Charity Regulator (OSCR) reviewed the practices of the charity in January after a complaint from the National Secular Society and, in a report, found it was breaking the Equality Act 2010.
St Margaret's gives greater priority to prospective adoptive parents who are a couple, Catholic, married for at least two years and who wish to adopt within the framework of a Catholic faith, the report said.
Lower priority is given to those who have been married for less than two years, couples in civil partnerships, single people and married couples who do not wish to adopt within the Catholic faith.
The regulator said marriage is not available to same-sex couples and that the charity's policy constitutes direct discrimination.
It ruled that St Margaret's failed the charity test and issued a direction for it to amend its procedures, or risk losing its charitable status.
The OSCR has now upheld its decision after conducting a review at St Margaret's request.
An updated report from the regulator said: "OSCR found that the charity does not provide public benefit because the way it provides benefit involves unlawful discrimination which causes detriment to the public and to particular groups of people, the effect of which outweighs the other positive effects of the charity's work.
"OSCR also found that access to the benefits the charity provides is unduly restricted.
Right of appeal
"OSCR therefore found that the charity fails the charity test and confirmed the decision to direct the charity to meet the charity test."
The charity now has the right to appeal to the Scottish Charities Appeal Panel.
Alistair McBay, spokesman for the National Secular Society, said: "The original decision was the only one the regulator could have made in the circumstances, to require St Margaret's to follow well-established equality law and charity law, opening up the pool of prospective parents to gay couples being in the best interests of children awaiting adoption.
"We hope St Margaret's will now put the best interests of children first, as many other Catholic adoption agencies have done, and comply with the law by widening the pool of prospective parents to include same-sex couples."
St Margaret's is partly funded by the Catholic Church and the trustees of the charity include bishops from dioceses in the west of Scotland.
A spokesman for the charity said: "We are disappointed at the decision. We will consult our lawyers before considering what course of action to pursue.
"In the meantime, St Margaret's remains open for business."
A Scottish government spokesman said: "The Scottish government is disappointed at this decision.
"We have worked with St Margaret's to find a solution but the review process is a matter for OSCR to undertake independently. It is not for Scottish ministers to adjudicate on the law.
"There remain further appeals processes for St Margaret's to pursue, should the society so choose."
The spokesman said the government did not believe it was "in anyone's interests to close an organisation which provides such a valuable service to vulnerable children".
The Scottish government announced plans to legalise same-sex marriage in July following a consultation that attracted 80,000 responses.
The proposals have received cross-party support in Holyrood and the government is continuing to seek views on its Marriage and Civil Partnership (Scotland) Bill.