Charitable status ‘more trouble than it’s worth’

24th June 2016 at 00:00
Political pressure may outweigh benefits for some independent schools

Just five years ago, private schools spent large amounts of time and money defending their right to charitable status in a protracted, but largely successful, legal dispute with the Charity Commission.

But today, TES can reveal, parts of the sector are having a rethink, with growing numbers of fee-paying schools starting to ask whether being a charity is more trouble than it is worth.

There are suggestions that some would abandon the status altogether if the government made it easier for them to do so.

“Many schools think to themselves from time to time that the relatively meagre benefits of charitable status hardly seem worth having, given the amount of pressure they come under and the additional requirements that are made on them,” Barnaby Lenon, chair of the Independent Schools Council (ISC) – which represents 1,267 schools, of which around 1,000 are charities – told TES.

“Having said that, I’m not aware of any schools that have actually taken a decision to abandon charitable status because they just don’t think it’s worth having,” the former head master of Harrow School added.

“There are a number of reasons for that. One is that it’s not straightforward legally…If it were made easier to abandon charitable status, then more schools would.”

‘Public benefit’ dispute

Many independent schools would still “operate charitably” and offer bursaries if they were not charities – but they would be freed from the political pressure that comes with charitable status, Mr Lenon said.

The 2011 legal case saw the ISC take on the Charity Commission after some private schools were told that they were not providing enough of a “public benefit” to justify charitable status.

The hearing ended with the commission being told by a panel of tribunal judges that it had gone too far in telling some schools that they were not providing enough of a “public benefit”. But the judges’ verdict was not an outright victory for the private schools either. The landmark ruling said that in order to be charities, schools had to provide a benefit beyond merely educating those who could afford the fees.

This left the door open for politicians and senior public figures to place more demands on independent schools. In 2014, Tristram Hunt, then Labour’s shadow education secretary, threatened the schools with the loss of charitable status under a future Labour government unless they did more to help children in state schools – a threat echoed by his successor, Lucy Powell, last year.

And in March, Ofsted’s chief inspector Sir Michael Wilshaw said that private schools should lose their charitable tax breaks unless they volunteered to run state academies.

“There’s a huge exaggeration of the benefits for us of being charities,” said Bernard Trafford, headmaster of the independent Newcastle upon Tyne Royal Grammar School.

“We want to be charities because we still believe passionately that education is a charitable purpose, so we stay with it. But it’s not worth such great riches to us that it would be something we’d feel that we want to be held to ransom over.”

He said his school would be “slightly worse off” if it lost charitable status, which brings tax breaks. The move would cost it about two or three per cent of its annual turnover, he said. Ceasing to be a charity “is not the thing we’d choose to do, but if there was too much political pressure maybe we’d have to get them off our backs in a way”, he added.

Some argue that schools’ frustration about political interference is a sign that charitable status isn’t right for them.

Martin Stephen, former high master of the London public school St Paul’s School, said: “I think that the charities model is obsolete and outdated.

“The whole concept of a charity as it is understood by the public isn’t the concept of an independent school. Charities exist in the main to heal the wounded; schools exist to prevent the wounded. There’s a philosophical gap between the founding spirit of them.

“The near miss we had with the Charity Commission stating what made you a charity [ahead of the 2011 court case] was enough to ring alarm bells.

“Charitable status makes you vulnerable; you’re at the behest of government legislation and other people deciding what charity is. In my view the way forward for fee-paying education is as a non-profit-making business.”

Yet an exodus of private schools from the register of charities is unlikely to happen soon. Charitable status is legally complex, and charitable assets such as private schools’ buildings and endowments cannot easily be handed over to non-charitable organisations.

Abandoning charitable status “would give schools greater freedom and independence”, Mr Lenon said. “But not so much that at the moment they feel it’s worth investing time and money in.”


Established ‘to help the poor’

England’s leading public schools were established centuries ago to help the poor, and should reconnect with this charitable purpose, campaigners argue.

Andrew Adonis, the Labour peer and former schools minister, writes in a 2012 article that Winchester, Eton, Charterhouse, Harrow and Westminster schools were all set up to educate “poor scholars”, often free of charge and funded by endowments.

“With each passing decade, many of these schools have become more, not less exclusive, and for generations now, few of them have done anything bold to reconnect with their charitable purpose,” he writes.

But some schools’ accounts of their history challenge Lord Adonis’ view. The Charterhouse School, a boarding school in Godalming, Surrey, claims on its website that although it was established as a school for 40 “poor scholars”, these were not poor in today’s understanding of the word.

“In this context, the word ‘poor’ merely meant those without the prosperity of substantial estates behind them,” the website says.

“Thus Charterhouse was from the start the province of the professional classes – the sons of doctors, lawyers, clergy – rather than the landed gentry.”

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