Uncertainty ahead

Matthew Burgess reviews how 2016 has impacted independent schools and what can be expected in 2017

Posted by Hannah Oakman | November 26, 2016 | People, policy, politics

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• #charitable-status
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"Uncertainty is the worst of all evils until the moment when reality makes us regret uncertainty,” said Alphonse Karr. Although Karr is better known for coining the expression, ‘plus ça change, plus c’est la même chose’, his views on uncertainty and reality chime perfectly with post-Brexit Britain. For independent schools, the government’s consultation on Schools that work for everyone is delivering yet more uncertainty. So a review of 2016 and a look ahead to 2017, is nothing if not fraught with uncertainty.

Brexit

Zhou Enlai’s comment to Nixon about the impact of the French Revolution – ‘It’s too early to tell’ – would be true today regarding Brexit. What is also true is that the impact of the vote to leave the EU in June 2016 will be felt across multiple areas where EU law has had the most profound impact on our national law – for instance immigration, employment, discrimination, public procurement, competition and regulatory law.

For independent schools, one of the many unknowns of the Brexit vote is its impact on the recruitment of international students. British education is a global export and independent schools should expect to continue to attract pupils the world over, particularly in a post-Brexit environment of devalued sterling. But regulation of overseas recruitment is notoriously complex and fickle, subject to seemingly random and multiple changes as UK Visas and Immigration constantly change the ground rules. With such political focus on immigration, it is entirely possible that EU students may soon need Tier 4 visas too.  

The Independent Schools Council’s 2016 Census reveals that there is a total of 47,385 non-British pupils across ISC’s 1,280 schools – more than 9% of all enrolled pupils. Brexit poses considerable uncertainty not just for these one in 11 pupils, but for all schools, pupils and parents.

Regulatory change

Independent schools have seen the usual amount of regulatory compliance change, ranging from a major rewrite of Keeping children safe in education, substantially amended Pupil Registration regulations, revised inspection frameworks from both Ofsted and ISI and new legislation in the shape of the Psychoactive Substances Act 2016. Proposals for further change are out for consultation, including a consultation on mandatory reporting and acting on child abuse and neglect.

Schools have had to make extensive changes to their child protection and safeguarding policies to take into account the September version of KCSIE, and many have struggled with how to approach DBS checks on host families, online safety issues or the circumstances in which returns are required to be made to the Local Authority in relation to pupils joining or departing the school. Looking ahead, ISI’s revised inspection framework brings with it substantial uncertainties as educational quality inspections continue to be piloted and inspection costs are (at the time of writing) still unknown.

Do we really know how much it costs an independent school to sponsor a failing academy?

Independent Inquiry into Child Sexual Abuse (IICSA)

IICSA has undergone its own quantum of uncertainty, leaving all stakeholders including schools unsure of what to expect next.  

Prior to Justice Goddard’s resignation, work appeared to be underway on the residential schools strand of the Inquiry, with a number of schools receiving requests for information relating to criminal convictions of former staff members.  However, the requests went considerably further than that, requesting information relating to all alleged or established child sexual abuse in the school, whether committed by staff, students or volunteers.

Post-Goddard and other resignations, the current approach remains unclear despite an internal review and statements from the new Chair. The stated ambition is to ‘make substantial progress towards completing the Inquiry by the end of 2020,’ so we must assume that the Inquiry will be with us for some years to come.

Charitable status

And so to Schools that work for everyone. The government launched its latest consultation on education reform in September, with wide-ranging proposals for change across schools and universities. The focus for the independent sector will inevitably be the proposals targeting schools with charitable status, although, of course, the impact of the changes to secondary schooling will be felt across all independent schools.

The consultation proposes that independent schools ‘with the capacity and capability’ should meet one of two expectations in recognition of the benefits of their charitable status: 

• To sponsor academies or set up a new free school in the state sector. The capital and revenue costs would be met by the government, but the independent school would have responsibility for ensuring its success, with the expectation that the sponsored school would be good or outstanding within a certain number of years.
• To offer a certain proportion of places as fully funded bursaries to those who are insufficiently wealthy to pay fees, with the expectation that this proportion is considerably higher than that offered currently at most independent schools. 

For the large number of smaller independent schools that do not have the capacity and capability to take on full sponsorship, the expectations will be centred on those schools fulfilling one or more of the following:

• Providing direct school-to-school support to state schools. 
• Supporting teaching in minority subjects which state schools struggle to make viable.
• Ensuring senior leaders become directors of multi-academy trusts.
• Providing greater expertise and access to facilities.
• Providing sixth-form scholarships to a proportion of pupils in each year 11 at a local school, assisting with their teaching or helping them with university applications. 

New benchmarks are proposed for independent schools, in line with their size and capacity, with the threat of future legislation to remove ‘the benefits associated with charitable status’ for schools which do not comply.

The proposals are set out in a consultation which is open until 12 December 2016. The Independent Schools Council is expected to take the lead in responding at a sector level and schools and associations are likely to respond in large numbers also. Areas for analysis are likely to centre on the following:

• How realistic is it to expect independent schools, the vast majority of which are dependent upon fee income rather than endowments or reserves, to take on substantial commitments for new or failing schools?
• Likewise, how can schools substantially increase free places without increasing fees or impacting the quality and breadth of their educational offer that the government applauds?
• How vulnerable are schools to the imposition of legal change? Charitable status itself does not seem to be under threat as the consultation focuses on ‘the benefits associated with charitable status’. How would the government go about discriminating between charities which remain eligible for fiscal benefits and those which are excluded? Would other types of charity be caught in the crossfire? More broadly, are there other areas where independent schools could face differential treatment based on their compliance with these new benchmarks?
• Might any legal avenues exist to challenge these proposals? Could this push some schools into a serious examination of structures for operating outside charitable status – or even as a state funded school?

As The Telegraph reported in December 2011 in its leading editorial, A spiteful vendetta against our best schools, ‘There is a far greater chance of positive cooperation between state and independent schools if the latter are not bullied and hectored by those who fail to appreciate what they offer to the country.’

ISC of course put a value on what the sector offers the country in its commissioned report from Oxford Economics a few years ago. And maybe the time has come for a new piece of analysis, which could deliver a per pupil figure of the costs and benefits of charitable status.  

Do we really know how much it costs an independent school to sponsor a failing academy and take it to Ofsted good? How many schools truly have this capacity and capability? How much is the value of the tax benefits?

With the scope and scale of the wider educational reforms on offer with the reintroduction of selection, there is, of course, a danger that a hostile sector response becomes portrayed as special interest pleading by a privileged minority.

And there is a very real possibility that, at some stage in the future, we will have not just Brexit but also Chexit, as some schools, voluntarily or not, exit the charitable sector.

Matthew Burgess is a partner at leading education law firm Veale Wasbrough Vizards. Matthew can be contacted on 0117 314 5338 or at mburgess@vwv.com