Investigation: Independent schools hoarding millions

Tes reveals that five top private schools accumulated surpluses worth £34.8 m in a year - up to four times as much as they spent on bursaries

Catherine Lough

private school pupil with cup

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.

Michael Wilshaw: Private schools are offering "crumbs off their table" to state schools

Related: Independent schools should offer 'a lot more' bursaries to poorer pupils, says leading head

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 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?”


Revealed: Private schools with the highest surpluses

harrow school

Tes analysed the accounts of seven independent schools with surpluses of £5 million or more for the financial year 2017-18, and found that five of the schools spent less than their surplus on their bursary provision in a single year.

Four schools accumulated surpluses that were twice as much as the money they spent on bursary provision in the same year, while two schools had surpluses that were four times as much what they spent on supporting disadvantaged pupils.


After reviewing the accounts of Latymer Upper School and Christ's Hospital School, Tes excluded these schools from its final analysis. 

*Christ's Hospital spends more than three times the equivalent of its surplus on bursaries. It has 300 pupils on bursaries worth 90 per cent of its fees, and over 100 pupils on full bursaries.

*Latymer Upper School's accounts also showed that £7.9 million of its £8.2 million surplus came from donations ring-fenced to fund bursaries. It also spent another £2.5m on bursaries in that year.  

Brighton College

Annual surplus for 2017-18: £10,635,000

Bursary provision: £5,857,000 is included this is under “support costs of schooling” in the school’s accounts. But this is not solely for bursary expenditure. The money goes towards “administration and bursary department expenditure, costs of the development office and the operations of the subsidiary promoting and developing overseas educational activity, together with an allocation of central costs”.

Number of pupils on roll: 1,619

Number of current pupils on full 100 per cent bursaries: The college did not respond to requests for this information.

Richard Cairns, the headteacher of Brighton College, said: “Unlike most major independent schools, Brighton College has no historical financial endowment at all. It is only in the last twelve years that we have begun to make a surplus and pay off outstanding debts.

“Once we established that positive financial trajectory, we took a decision to build up an endowment which we will use purely for social impact – both bursaries and our direct financial support for the life-changing London Academy of Excellence of which we are the founder sponsor. This endowment we are calling our social impact fund and once we reach £30 million, we plan to launch a hugely exciting and extensive bursary programme as well as sponsor more work in the state sector.”

“The entire surplus in the year ahead will be spent on building up the social impact fund, the new Opening Doors 110 per cent bursary programme, financing the London Academy of Excellence, and the usual spending on the school site. In that sense, there is no real surplus. Everything is ploughed back into the College to support our pupils and to enhance our ever wider social impact.”


Wellington College

Annual surplus for 2017-18: £7,423,000

Money spent on bursary provision that year: £2,846,000

Number of pupils on roll: 1,037

Number of current pupils on full 100 per cent bursaries: Nine pupils received full fee remission and a further 12 received bursaries of 85 per cent or more of the fees.

The college did not give any further comment.


St Paul’s School

Annual surplus for 2017-18: £7,423,000

Money spent on bursary provision that year: £1,714,000

Number of pupils on roll: 1,412

Number of current pupils on full 100 per cent bursaries: 39. A further 65 pupils are on bursaries of 75 per cent or above.

St Paul's has published its accounts for 2018-19, showing its surplus for that year was £6.1 million.

A spokesperson for the school said: “The school’s internally generated surplus for 2017-18 was just over £3m, which at around 11 per cent of revenue is the standard for independent schools of this type. The £6.8m surplus includes donations, notably a £3m donation received to fund the complete reconstruction of the school buildings. 

“These were all built-in prefabricated CLASP in 1968 and are far beyond their lifespan. The school has had to undertake a rapid programme of replacement and funding over a ten-year period.  The urgent programme started in 2012 and is scheduled to finish in 2022. So the school is in the unfortunate position of having no option but to divert many of its resources to replace its buildings.”


King’s College School, Wimbledon

Annual surplus for 2017-18: £5,064,000

Money spent on bursary provision that year: £1,300,000

Number of pupils on roll: 1,402

Number of current pupils on full 100 per cent bursaries: 33

Andrew Halls, the headmaster at King’s College School, said most of the school’s annual surplus would go towards a building programme to expand the school and provide more places, including for pupils receiving bursaries.

He also said he had changed the school’s bursary programme to open up places at aged 11 – he was aware that for families entering the school from the state sector who might need bursaries, they would be very unlikely to remove their child from secondary school to sit the 13+.

“When you look at that surplus and say, ‘Gosh, that’s enormous... the other thing to bear in mind is we spent £10 million on tangible fixed assets. It looks great on paper but we do not have that surplus, it’s gone on the expansion we’ve done mainly to take children from primary schools so we could increase the number of bursaries we can give in the future.”

The £10 million was predominantly spent on a new lower school, which Mr Halls said would enable King’s to "create a major new entry for 60 boys at 11+, many from local primary schools".

“One thing we’re very keen to do is to start an endowment fund and we haven’t got one,” he said, pointing out that many independent schools have generous endowments that can give them more financial security.

He said he went to comprehensive school himself and “I felt the drawbridge needed to be down, it’s been quite a big thing for us. The junior school will now also be up to 11, so there’s been quite a lot of change”.


Brentwood School

Annual surplus for 2017-18: £4,938,181

Money spent on bursary provision that year: £2,073,347

Number of pupils on roll: 1,551

Number of current pupils on full 100 per cent bursaries: 44 are on full bursaries, and 65 have at least a 75 per cent reduction on fees.

Brentwood has also published its accounts for 2019 – its surplus for 2018-19 was £5.4 million.

Michael Bond, the headmaster at Brentwood, said: “All of our revenue is ploughed straight back into the school for the benefit of the children." 

“It’s invested in facilities and the upkeep of a large estate and also staff recruitment and retention – all of it is reinvested. Building-wise we spent £50 million developing facilities and also maintaining our estate and some of the buildings we have are from [the Tudor] period and take quite a bit of money to maintain and keep safe.”

Mr Bond added that he wanted to use bursaries to “reach into communities of very deprived children” and that, having attended a comprehensive school himself in the northeast of England, he wanted the school to give disadvantaged students opportunities.

“I had a lot of hunger in my career – when I see what’s available in our schools, if we can find children with that hunger and aspiration and put them into an environment like Brentwood, that could be genuinely life changing.”

He said funding bursaries was a “difficult balance to strike”, as “clearly the surplus is revenue and is coming in from the fees of parents, and we have to be careful in being the stewards of that money.”

“There are benefits for children whose parents pay full fees in having children on bursaries – they will join the real world and there is a benefit for them to have children from all backgrounds in their school – but we also need to attract the best teachers, the best facilities for the benefit of all - so that they will achieve better. So it is about balancing in spending the proportion on bursaries and teaching and learning.”

The school aims to fund around 100 full fee places by September 2020.

“Having not had access to independent education myself, but having seen how much of a force for good it can be, one of the things that most attracted me to Brentwood was its bursary provision, and, having been through the current cycle of applications over the past couple of weeks, I can say with confidence that it provides life-changing opportunities for many children from disadvantaged backgrounds,” Mr Bond said.

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author bio

Catherine Lough

Catherine Lough is a reporter at Tes.

Find me on Twitter @CathImogenLough

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