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Should Private Schools be Charities or Businesses?

Closing the Gap Highlights

A hot topic in UK Education News this week is the Independent Schools Council (ISC) challenging the 2006 Charities Act at tribunal.  But what’s the right decision?  Should independent schools be allowed to run as charities or should they be forced to run as businesses?

 

Up until the 2006 Charities Act came into force, schools had an automatic right to claim charitable status as they were fulfilling the aim of ‘advancing education’ – one of thirteen charitable aims.  This had been the situation for many years and Independent Schools ran as charities claiming significant tax benefits until the 2006 Charities Act came along.

 

In summary, section 2 of the Charities Act 2006 stated that any activity or institution can only be classed as a charity it if is of public benefit.  This means that in order to remain charities, independent schools must demonstrate the benefits they offer to the wider public, beyond their own fee-paying pupils.  And whether or not independent schools pass this test has been a hotly contested topic for some time.

 

It’s a pretty key issue for independent schools, as charitable status saves them, collectively, in the region of £100million in tax relief each year.  Not a small amount of cash in these austere times.  Forcing independent schools to become businesses and lose this tax relief will increase fees, reduce bursaries and penalise those middle-income families who are already stretching themselves financially in order to meet the fees required to send their children to independent schools the ISC argues.

 

The Independent Schools Council also argue that the Charities Commission is placing too much emphasis on the need to provide bursaries in order to widen access and that those schools who do not  offer significant bursaries should be able to pass the ‘public benefit test’ by sharing facilities or developing partnerships with local state schools.

 

The Charities Tribunal is expected to last more than a week.  Its outcome will be crucial to the future of many Independent Schools in the UK.
So what do you think?  Should independent schools be allowed to run as charities or should they be made to run as businesses?  I’d love you to share your thoughts on this political hot potato!

 

9 responses to “Should Private Schools be Charities or Businesses?”

  1. Avatar James Durkan says:

    Isn’t this one of those ‘having their cake and eating it’ stories?

    If the private schools want autonomy and freedom from external agencies, they should nail their colours to the mast and declare they are private businesses not accountable to any one.

    On the other hand, if they want the benefit of public largesse, they must expect to make concessions.

    • Avatar David Wicks says:

      The fact that those parents paying school fees also contribute taxes to a state education system that they not using is reason enough, in my view, to classify private schools as charities as it allows for a greater spread of state funding.

      If we allow private schools to be run as ‘businesses’ then lets be honest about this and give them their portion of funding their tax paying parents would otherwise pay to the state.

  2. Avatar Rob Davies says:

    I agree with James. Private schools are businesses and should pay tax accordingly. I have no sympathy what so even with those hard working parents who turn their back on the local state school.

    Better for them and the community if they sent their kids to the local school and worked with the governors to make it a place they are happy with… And do not get me started on failing private schools becoming Free Schools!!! Why should my tax money fund education for families who opted out of the state system!?

  3. Avatar Andy Gregory says:

    I couldn’t agree more with the comments that have already been made. In my experience the efforts of private schools to benefit the wider public are very tokenistic. I don’t see how providing a tow-tiered system of education benefits the wider public. Perhaps the money should be spent on social mobility realated projects (genuine rather than tokenistic ones).

  4. I agree with all of the above comments. The core activity of charities is to help address gaps in provision around community and society needs with focus on the most disadvantaged in society – the least able to pay. The core activity of independent schools is to deliver a form of education to those that can most afford to pay. I’ve never understood how the two could be confused. It is also interesting that none from the independent sector have made a comment to the contrary – could it that be because they know (shame faced) it is an indefensible position? Public schools are businesses and should be taxed as such.

  5. Avatar Damo says:

    As a teacher in the private sector and a parent sending their child to private school, I support the Charity status of private schools. The schools function is to provide quality education to anyone who wants it and can afford it. They reinvest any surplus into school facilities or bursaries and offer a significantly superior service to the state sector. Forgive me but adding £100 million to the state sector would be money wasted. Consider how much is spent on state schools at the minute, yet GCSE pass rate is little over 50% due to large class sizes and poor management both in and out of the classroom. Why should my kid have to sit anonymously in a class of 35+ (this is a common number in primary school classes) if I can offord to send them to a class of 10-15?
    Keep the charity status because without it the state schools will have to accommodate those kids whose parents can no longer afford the private fees. Don’t be fooled into thinking the extra £100 million will be spent on more teachers or better facilities in those state schools. It will be squandered and mismanaged like all things under government control.

  6. Avatar M. F says:

    I work for an independent school. Whilst I see everyone’s point written above I can totally see why many parents opt for independent education; particularly military families who are failed by the state systems (both military and schools) due to their children having to move so many times. If it wasn’t for the charitable status of independent schools many parents would be unable to send their children. Many parents I know don’t have a choice on the state school they send their children to either due to postcode lottery systems. Our school’s charitable status means it is particularly able to offer its sporting facilities to nearby state schools and so they benefit enormously in this area. Local schools can make wide use of our facilities they would otherwise not have.
    I’m sorry but having worked in both sectors I would rather my child went to an independent school for numerous reasons and if charitable status means cheaper fees and wider employment for teachers then I am all for it.

  7. Avatar Independent School Employee says:

    I believe there are around 2,600 independent schools in the UK.
    How many jobs do they create?
    How much spending results?
    How much tax is paid?

    Independent schools educate around 628,000 children.
    How much would it cost to educate them in the state system?

    Tax relief of £100 million seems a small price to pay.

    .

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