‘Charitable status is unsustainable in the medium to long term’

Many independent schools enjoy charitable status – and it’s a great advantage. It provides a massive tax break that over the years – many, many years – has allowed schools to subsidise the education of less wealthy students who deserve or need an independent school’s support.

But the independent sector has very few friends both in Westminster and in the media. Even though the majority of those with power and influence were educated privately. There just aren’t enough votes in promoting a system that is only accessed by a tiny minority of students – less than 7% of all UK children.

The House of Commons Library’s research briefing paper of October 2019 sets out in broad terms the basis upon which schools qualify to hold charitable status. Simply, educational charities, like all other charities, must demonstrate that they are there for the public benefit. There is no statutory definition of what this means.

Partnerships between independent schools with charitable status and the state sector are now standard practice – shared facilities, some teaching, bursaries and scholarships are embedded in the sector. Which is a good start.

But the independent sector has not significantly increased its student recruitment, over recent years. There are still only 537,000 children in 1,370 ISC affiliated schools. Nor has anyone in government spoken up for the excellence of results both academically and in the worlds of sport and the arts.

Fulfilling charitable status is the way to modify outdated misconceptions, raise the sector’s profile and advertise the excellence of independent education

Indeed, many successful young people are all too ready to downplay their educational background because their success can be directly attributed to their privileged education, in an educational system that appears to be closed off to 93% of children.

The most recent Labour Party policy (September 2021) is clear: Sir Keir Starmer has pledged to abolish charitable status for independent schools. Independent schools would be required to integrate into the state sector.

I may be a doom-monger, but I think that charitable status is unsustainable in the medium to long term. And for the sake of argument let’s imagine that I’m correct in my assessment and examine what the educational landscape would look like in a post charitable status world.

We need not worry too much about the headline ‘top schools’, so derided by the media – and incidentally currently doing so much to share their largesse. Those institutions would survive any tax grabs.

I fear that the real casualties of the withdrawal of charitable status would be smaller independent schools. They charge relatively lower fees and already exist in a marginal state owing to increases in teachers’ pension contributions, National Insurance and the rise in the minimum wage.

Almost all these schools have always provided fee assistance to parents, but their resources are now under much greater pressure. And many of those smaller schools are dependent upon the overseas market to fill their boarding places and are now reeling from the effects of the pandemic upon international recruitment.

Surviving after charitable status

But there are ways forward to survive in a post-charitable status world. First, no government in a democracy could prevent parents from accessing private tuition for their child. Private tuition isn’t limited to academic subjects, but includes sports coaching, drama classes and music lessons. And much more.

The pandemic has left many state school children out of education for almost a year; there are catch up classes that will need to be provided for some time to come. Independent schools could fill that gap. They could present themselves as educational hubs for all children in their area, charging no more than parents already pay for extra childcare, sports coaching and music and drama lessons: a wraparound service provided in one facility.

Surely, on the basis of economy of scale, schools would be able to charge less than private tuition providers, sports clubs, drama workshops and music lessons. The practical problems for independent schools would be logistical. But it could be done, if the only alternative was to be subsumed into the state sector.

Labour policy “to redistribute assets and properties owned by private schools to the state-owned sector” may not be a practical proposal, but it could be a headline-grabbing vote winner. But the real threat to our sector comes from public perception: the perception that independent schools are at worst elitist and in most parts irrelevant to the vast majority of the population.

Opening the doors of schools to everyone in the locality is a way to break down the misapprehension that private schools are elitist. Fulfilling charitable status is the way to modify outdated misconceptions, raise the sector’s profile and advertise the excellence of independent education.

Independent schools could potentially open their doors to all students on a supply-and-demand basis, making selection not based on the requirement to pay full fees, but upon the school’s widely drawn eligibility criteria for bursary and scholarship assistance.

The current ‘pupil premium’ that all children in full-time education are allocated could follow the pupil to the school: the shortfall in funding made up by bursaries, scholarships and means-tested parental contributions. Corporate and private donations to schools already attract a favourable tax advantage to the donors.

These proposals and variations of these themes are not new, but I hope they can now be given some proper consideration by those schools in the sector that wish to survive and thrive in these most unfriendly times.

I guess that sometime in the next few years the international market will revive: British education in independent schools is still highly regarded globally. But the next few years will be tricky unless schools connect with the potential customers on their doorstep and change the perception that private schools are for posh people only.

They should be for everyone.

In related news: ‘Clear contradiction’ in Labour’s plans to tax independent schools – ISC