What future for the Charitable Status of Independent Schools?

5 July 2010 | By Cause4 staff

It is a widely known fact that independent schools, still referred to in many quarters as ‘public schools’, educate around 7% of pupils within the UK. It is also widely known that the majority, if not all, of these schools hold charitable status on grounds that the law until recently presumed that education was in itself a charitable activity.

Until 2006 independent schools were able to maintain their charitable status, enjoying valuable tax-breaks in the process, without undue external interference. However, The Charities Act of 2006 changed matters, retention of charitable status becoming dependent upon schools providing public benefit in ways that would satisfy The Charity Commission’s inspectorate. Public benefit provision includes, for instance, access to facilities for local people and availability of means-tested bursaries.

As The Guardian recently reported, ‘It is permissible for public schools to charge fees for these services as long as there is, on balance, an effort to help poor and local people. The tax relief is on average worth £225 per child each year to private schools, or just under 2.5% of their average annual turnover.’ David Miliband has recently challenged the continuation of this tax-relief, which is suggested to amount to £100 million annually.

The term ‘public school’ seems in many ways a contradiction since independent education is the preserve of a minority elite, those whose families can afford expensive fees – except for a relatively few who receive bursaries. However, the original ‘public schools’ were schools seeking to give educational access to the public and they were especially minded by the poor, including, for instance, the sons and daughters of the clergy. Charitable instincts were absolutely at their roots, although charitable status was conferred regardless of how and to what extent charitable activities were provided outside of broad educational provision.

It is quite right that any registered charity should be accountable and demonstrate that its activities are charitable, bringing clear benefits to others. Yet it is impossible to avoid the suggestion that the Charity Commission’s scrutinising of independent schools has been politically-motivated, undertaken to re-enforce the Labour Party’s entrenched opposition to independent schools. It is time to de-politicise and separate the issue a) of independent schools and their place within the ecology of British education and b) their charitable status and the way in which, as registered charities, they are held to account.

In conclusion, Cause4 offers these few thoughts:

1. Those independent schools with charitable status should - and must - deliver activities outside of the broad provision of education that clearly justify their charitable status and which deliver public benefit. Independent schools should not forget for what purposes most of them were first established – to improve opportunities to those who would not otherwise access a good education.

2. Many of us have more than a few misgivings about the existence of private education and the principle of providing a high-quality education to those with the means to pay for it whilst denying it to those who can’t. But in considering our qualms, we should also understand why demand for independent education continues to grow. In 2008 a MORI poll confirmed that 57% of parents would choose independent education if they could afford it. Of course, they would - because for most of us there is one principle that stands pre-eminent: Opportunities for all young people matter, but the opportunities we give to our own children matter most.

3. Private education exists – and has always existed - because the state either has not provided or is not perceived to be offering an acceptable alternative, one readily available on our doorsteps that will satisfy our hopes and expectations. Regardless of whether or not we are enamoured by private schools, it’s time for government to give private schools a better run for their money – not by trying to close them down or making them even more expensive, but by actually providing competition. Why would anyone choose to pay for private education when the alternative would be to pay nothing at all?

4. David Miliband’s questioning of the tax-concessions available to independent schools takes him into dangerous territory, encroaching as it does on the independent territory of the Charity Commission. It also fails to demonstrate any appreciation of just what independent schools contribute economically. In educating 7% of the population – some 500,000 young people each year – outside of state provision, the savings to the state are vast. At a time when educational budgets are under close scrutiny, would it not be better to acknowledge what independent schools achieve and, with carrot rather than stick, encourage them to widen access and deliver even greater public benefit?

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