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Elitism doesn't deserve tax breaks, public schools hearing told 3

Finance | Tania Mason | 14 Jul 2008

Independent schools should not be charities because “elitism should not be tax-deductible”, writer Simon Jenkins told the select committee examining the public benefit test for charities last week.

As part of its investigation, the Public Administration Select Committee heard evidence about the impact of the public benefit test on private schools from the Independent Schools Council (ISC), the master of Wellington College, and Jenkins.

Jenkins (pictured), who has just been announced as the new chair of the National Trust, said: “The Act is quite clear – if you are going to call yourself a charity, you have to be a charity. Just because you save the state money somewhere else does not mean you are a charity – it might be kindness, but it is not charity.”

He went on to say that he had been a school governor in the past and recalled that the only thing the board was ever concerned with was moving up the league tables.

“The Charity Commission is perfectly right to open up this discussion,” he said. “Let’s ask schools what they do that is charitable. Some are doing very charitable things as a result – but if they don’t, I don’t see why they should get tax relief.”

Public schools been providing public benefit ‘for centuries’

ISC chair Dame Judith Mayhew Jonas began her evidence by saying education itself was still a charitable purpose, so independent schools already fulfilled that narrow requirement.

She then claimed most schools had been supporting their communities for centuries, and welcomed this opportunity to demonstrate what they do beyond their core activity of providing education.

But Dr Anthony Seldon, master at Wellington College, admitted the issue had provoked some resentment among schools because it was being assumed that they were only now starting to provide wider benefits to the public. “This is patronising at best; demeaning at worst,” he said.

Committee chair Dr Tony Wright MP asked Dame Judith whether she was confident that all public schools would pass the public benefit test, to which she replied: “Yes, they will.”

Wright admitted to being puzzled, because the Charity Commission guidance seemed to say that fee-charging charities must provide opportunities to people in poverty, and he understood that the independent schools sector was unhappy about that.

Commission guidance ‘may be ultra vires’

At this, Dame Judith said the ICS diagreed with the Charity Commission’s draft guidance, and would be scrutinising the final guidance closely to ensure it is “within the law”.

“The Charity Commission is a regulator, not a policy formulator,” she said, “and its regulation must be within the scope of the Act.”

Dr Seldon said he also disagreed with the Charity Commission’s suggestion that providing more bursaries might be one way of proving public benefit. “Bursaries are not a panacea,” he said. “They take out the brightest and the best from state schools and put them in independent schools, which seems to me to be depriving state schools of future leaders.”

‘Excellent does not mean charitable’

He warned the Commission against defining public benefit too narrowly, and then launched into an impassioned spiel about the advantages of the public school system.

“Which sector is more successful – the 93 per cent that are state schools, or the 7 per cent that are independent? This sector is the world’s most successful sector of education – how British to try and damage that which is very successful, for unknown benefits for the other 93 per cent.”

Jenkins retorted that the word charity had to have clear meaning, and that simply being excellent at something did not equal charitable status. “Rolls Royce is an excellent car maker – does that mean it should get tax breaks?”

When challenged by a committee member: “What is wrong with elitism?”, Jenkins responded: “Nothing, but why should it be tax-deductible?”

Dame Judith resumed her evidence by asserting that independence was the key – “the schools we represent value their independence”.

To this, Wright responded: “If independence is the key, why are you so anxious to keep attaching yourself to the state through this subsidy? Some schools must be saying, ‘we don’t want to prove we provide public benefit to the poor, we just want to get on with the job’.”

Dame Judith said most schools couldn’t divest themselves of charitable status easily, even if they wanted to, because of the way their founding documents are set up.

‘No comment’ on Chris Parry

Dame Judith was put on the spot by another committee member, who suggested it had been a “big mistake” for the ISC to appoint Rear Admiral Chris Parry as chief executive recently. Parry stepped down after just two months amid criticism that his military references and comments about the state school sector had made his position untenable.

Dame Judith refused to comment on Parry’s appointment or departure, but did admit she had been on his appointment panel.

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