Top independent schools are accumulating tens of millions of pounds of surpluses in a single year, worth several times the amount they spend on bursary schemes, a Tes investigation has revealed.
Analysis of accounts filed to the Charity Commission shows that five schools accumulated surpluses of more than £5 million in a single year, with one school – Brighton College, where older boarders pay over £39,000 per year – accumulating a surplus of £10.6 million.
In total, the five schools accumulated £34.8 million in surpluses. For four of the schools, the money left in their accounts was more than twice what they had spent on bursary provision in the same year, while two of the schools accumulated surpluses equivalent to four times the amount they had spent on bursaries.
Leading figures in other parts of the independent sector have called for schools to use any additional funds they have for bursary provision for disadvantaged pupils, describing this as a "moral imperative" for wealthy private schools.
And Sir Michael Wilshaw, the former chief inspector of Ofsted, said little had changed since he made a speech seven years ago in which he described the offerings of private schools to neighbouring state schools as "crumbs off their tables".
Tes looked into independent school Charity Commission returns for 2017/-18 – the latest year that all Headmasters' and Headmistresses' Conference (HMC) schools had filed for.
They included five schools with surpluses of between £5 million and £10 million: Brighton College, Wellington College, St Paul’s School, King’s College School Wimbledon and Brentwood School.
On average, these schools accumulated a surplus of £6.96 million during the year 2017-18.
The schools spent less than half of the equivalent of their surpluses on bursaries, with the exception of Brighton College – which spent the equivalent of 55 per cent of its annual surplus on bursary provision in the same year, although this sum included money towards administrative costs.
Two schools – St Paul's School in London, and King's College School Wimbledon – had surpluses that were four times what they spent on bursaries in the same year.
David James, the deputy head of another HMC independent school, said schools with large surpluses should be using the money to widen access for poorer pupils.
“For those schools with large surpluses, there’s a moral imperative to spend more to widen access to allow pupils from disadvantaged backgrounds to access their resources,” he said.
Mr James said wealthy schools needed to be aware of the “complex contextual factors” for disadvantaged children.
“Those affluent schools should find out more about the societies they are rooted in, both local and national, and be sensitive of the conditions that those children will be in,” he said.
He said schools with large surpluses needed to do more to reduce societal inequalities overall.
“They need to show greater leadership in the sector, not to react to possible negative criticism – Labour Against Private Schools [is] going to criticise our schools until we are out of business," Mr James said.
“Schools should be doing this because it’s the right thing to do, because they’re trying to make society a fairer place for young people, by putting money in intelligently where it might make the most difference.”
Sir Michael said: "It does not surprise me that [private schools] have these large surpluses that they’re not spending on the state sector," he said.
"It is crumbs off the table – they do a little bit and think that’s enough to warrant getting tax relief. They are not penalised by Inland Revenue [HMRC] for not helping – if they get these surpluses, they should be spending it on bursaries for poor children or helping out schools near them.
"They would probably say these surpluses are to invest in better facilities and so on but they should be spending this to support bursaries for poor children.
"It reinforces to me that they are in a privileged position – they enjoy their tax relief, they enjoy the fact that the state is paying for their teacher training – because their staff are trained in the same way as for the state sector...so they enjoy those privileges and they should be paying back much more generously than they are at the moment."
He added that he did not think much had changed since he made his comments in 2013, and that in the intervening years, private schools "probably got a lot wealthier and [felt] free to carry on as they’ve always done".
John Claughton, the former chief master of the independent King Edward’s School in Birmingham and the author of Transforming young lives: fundraising for bursaries, said: "Successful schools, which do have these surpluses, have to ask themselves how active they are being in pursuing properly means-tested places for children within their schools."
David Woodgate, chief executive of the Independent Schools’ Bursars Association, said schools may build up surpluses to be financially prudent.
He said charity commission guidance outlines how charities' reserves “can strengthen a charity’s resilience against, for example, drops in income or the demands of a new project”, and suggested schools may wish to retain larger surpluses as a buffer for financial shocks such as the possible loss of business rates relief for private schools, as well as the costs of increased contributions to the Teachers’ Pension Scheme.
“There is no reason why a school cannot make a surplus; you would expect any organisation to do so because you have to generate cash to keep the school running on a day-to-day basis and to invest for the future,” he said.
“Some schools were taking the view that cash is king, and to survive financial shocks, they need to keep their powder dry. Moreover, banks which lend to independent school often impose a 'net surplus covenant' which means a certain level of surplus is a condition of the loan, to ensure the school is generating surpluses to repay it.
“We have a degree of certainty, but only a degree with Boris [Johnson], I think, at a time when there’s hostility politically – we know in Scotland, business rates relief will disappear from September – and will the UK government follow suit in England? We have a situation where employers are grappling with the 43 per cent Teachers’ Pension Scheme increases and a rise in starting salaries for teachers.
“I was speaking to one school recently where these factors will add half a million pounds to their cost base. It’s not speculation, it’s prudence. ‘War chest’ might not be quite the right word for it, but rainy day money?”