The Charities Act defines charities as organisations set up for charitable purpose and which provide benefit to the public.
However, when The Labour Party and others challenge the right of fee-paying private sector schools to claim charitable status these institutions and their cheer leaders cry foul. Yet these schools provide benefit to those attending them whilst fuelling inequality, undermining social mobility and promoting elitism. It requires a very long stretch of imagination to describe these outcomes as being in the public interest.
Labour is not alone in questioning the tax advantages of private schools – even former secretary of state for education, Michael Gove has raised questions.
Seven per cent of children attend these schools. However, their alumni are offered more than this percentage of university places especially at Oxbridge colleges. They dominate senior appointments across the professions and sectors.
Whilst many of these private schools were founded to educate the poor, they now provide the classrooms and playing fields for the sons and daughters of the wealthiest in our country and in many cases those of overseas oligarchs. A very low percentage of the learners attending these schools have a ‘free education’ which one might have expected given their charitable status.
Charitable tax concessions including business rate concessions mean that in some cases private school learners receive through these subsidies more than their state educated peers do in terms of per capita expenditure. This is wrong in a modern society that seeks fairness, greater equality and more equity. It denies the very basis of charity.
Labour is considering going further than ending charitable status and imposing VAT on private school fees though these specific policies will be a priority for a Labour government. The party has voted at its conference to integrate the private schools into the public state system – in effect to end private schooling.
The private education sector and wider establishment have perhaps not surprisingly reacted strongly to Labour’s conference vote and described it as “incredulous” and an “act of unprecedented vandalism”.
Could it set a precedent?
Some in the charity sector have raised concerns about the implications of charitable funds being ‘nationalised’ or directed by the state. They argue that this could set a dangerous precedent.
The details of how charitable assets would be addressed need to be agreed. The policy could involve challenging and, if necessary, making these ‘education charities’ act as charities by using their assets for charitable purposes and the common good, not for protecting privilege and inequality. Or it could involve sequestrating charitable funds and property in the public interest.
One model could be based on the NHS experience. When charitable hospitals were taken into the NHS in many cases their charitable funds remained independently administered and used to promote the interests of patients and communities using hospitals with which they were associated. However, assets were transferred to the NHS. Could this model apply if private schools are integrated into the public education system?
Alternatively, community education trusts with local community trustees being established to take over charitable assets and funds, and deploy them to benefit local young people? There may be other models that would democratise these charities and their assets. These should be explored.
Avoiding unintended consequences
Unintended consequences should be avoided. For example, it would be essential to ensure that schools run by charities for disabled children or community nurseries are not swept aside by policies designed to address the likes of Eton.
There is clearly a debate on how to handle charitable assets. However, such a debate should not be allowed to derail the pursuit of greater equality of opportunity and outcome in our education system by tackling – and eventually ending - the private school system. Such an objective will also require related measures such as placing duties on all universities to improve access for state sector students and those from poorer backgrounds as well as capping private school recruitment (especially if private schools moved off shore and continued to serve a wealthy seven percent or probably lower percentage of students and their families).
What’s in the sector’s interest?
The continuation of private schools’ charitable status is not in the interests of charities more generally. It would be an error for the wider charity sector to find itself defending privilege and the application of charitable status to promote education and life opportunity privilege.
Whilst avoiding partisan politics charities should engage in the debate about the future of private schools, their charitable status and how their charitable assets can be practically deployed in the public interest – the very basis of charity.
John Tizard is an independent strategic advisor and commentator. He is currently a trustee and charity chair and chair of a CIC.