A truly British McEducation

I was recently surveying the latest rubrics in The Times’ appointments section and noted two public schools seeking what are effectively business development directors for their schools’ international expansion.  I guess I hadn’t realised that what had started as a trickle of ad hoc satellite schools in Thailand and China was quickly becoming a deluge in the Middle East and further afield.

Brighton College and Wellington College are two of the schools which have recently announced mass roll-outs of franchised operations.  Brighton College plans to open two schools in Abu Dhabi in 2011 and 2013, with others to follow in Oman, Jordan, Romania, Vietnam and India.  Wellington College has plans to open approximately 15 schools, beginning in China in 2011 and following with Malaysia, Qatar, Bahrain and India.  This is not a new phenomenon: Dulwich and Harrow have had franchises in China and Thailand for about a decade, while other public schools have created the odd satellite; Repton Dubai, Oxford High GDST in China, Haileybury-Almaty, Shrewsbury Bangkok and Bromsgrove Bangkok come immediately to mind.  Brighton and Wellington are fairly unique, however, in the scale of their planned operations.  Both are motivated by the franchise fees which will be used to fund bursary places and capital projects in the UK.

The franchising of a marketable British brand (or at least until A Levels are thoroughly discredited through grade inflation and curriculum dilution) outside the UK seems very sensible to me in light of the pressures imposed by the Charities Commission on independent charitable schools to provide “public benefit”.  After all, as I discussed in The public benefit that will cut out the middle classes, the absurd result of the Charities Commission’s guidance is that schools will feel compelled to offer more bursaries — bursaries which many do not have the endowments to fund.   The result?  Increasing fees for non-bursary pupils.  Taken to its absurd conclusion, this would result in most charitable schools having a polarised population of very poor and very rich pupils.  So taking cash from franchised operations to fund these places in the UK and hence preserving a broad economic spectrum of pupils seems eminently sensible.

The repatriation of profits to Britain may be morally questionable to some.  Soft imperialism has been a term that has been bandied about.  Frankly, I’m not too worried about that; the premise for the success of these franchises is that there is a stratum of the local foreign market which has the means to pay for a private British education and is more than willing to pay for it. Moreover, I have no doubt that the local population will soon wise up to the fact that they can replicate the British model on their own and squeeze the franchises out once the local market becomes better established.  This may be precipitated by the profit motive in the local market or perhaps by nationalist sentiment when locals realise that profits from the satellite schools are funding kids back in Britain rather than kids in New Delhi, Bangkok or Abu Dhabi.  I have no doubt that the consumers in these far-flung locations have the wealth and know-how to look out for themselves.  Many probably have incomes far in excess of the average parent of a public school child in England.  

This is precisely why I think the British public schools engaging in franchising or thinking about it should do so with caution.  With the exception of perhaps Harrow, very few of the public schools which are establishing satellites are household names abroad.  As much as many of the franchising schools like to think of themselves as major public schools (and let’s face it, most of them are not in this league), the cachet and hence pulling power of most public schools is not so great that they couldn’t be supplanted by generic locally-established British-modelled schools.  And when it sinks in that consumers are not really getting a Harrow, Dulwich, Repton or Wellington education but rather a knock-off co-branded education, the momentum for local home-grown competitors to the British satellite schools will grow considerably and threaten the viability of the satellite school model.

Franchising offers an opportunity to certain public schools to ensure that they can meet the public benefit requirement that the Charities Commission has imposed without increasing fees and alienating the middle classes.  If they want to take advantage of this they should do so quickly because it won’t take long for satellite school consumers to develop the expertise to establish their own home-grown schools which can give them as much, if not more, than any of our satellite schools can offer.  When that happens, the franchisor schools will find their franchise fees dry up and perhaps, if they’re unlucky, they’ll even find they’ve received little return on their investment. and perhaps seen their most valuable asset — their name and reputation — highly devalued. At that point, selling a birthright for a mess of potage comes to mind, and that cannot be a good thing for any school.

Shame on the Girls’ Day School Trust

On 29 October in Credit crunch: When they can’t afford the school fees any longer, I addressed the issue of children being withdrawn mid-year from their fee-paying schools due to the credit crunch.  Canvassing the press, I see that in the past three months, this precise subject has become a rather hot topic for the media and a rather pressing issue for more and more families.  The credit crunch has adversely affected all of us in some way or another, and not everyone finds themselves in a crunch because of negligence of the type witnessed by the banks of Wall Street and Canary Wharf.  Some people are just experiencing tough luck — flotsam in the bigger, choppier seas of the current economy.   The ensuing sharp practice of some mortgage lenders when dealing with mortgagees facing challenges as a result of these difficult times has been highlighted by the press and chastised by political and community leaders.  But sharp practice by school bursars?

The very institutions which are entrusted with the education of future citizens and leaders in a full array of subjects, including moral education and citizenship, should be leading the way in helping parents in financial difficulty to find a way to keep their children in school while allowing them to rearrange their finances.  Goodness knows, many schools are doing just this: fee arrangements are being agreed and bursaries are being granted by many schools to allow children in critical phases such as GCSEs and A levels to complete those courses or others to finish off their school year so as to minimise disruption to their lives.  This is all very laudable.  So what kind of example could the Girls’ Day School Trust (which owns several dozen schools in the UK and is estimated to educate ten percent of all privately educated girls in this country) have possibly been trying to set in terms of moral education and citizenship when it allegedly* rudely excluded a Year 7 Streatham and Clapham High School pupil mid-way through morning classes in front of all of the pupil’s classmates?  The pupil was allegedly* escorted to reception where she was allegedly* left unattended for several hours until her mother could be contacted to collect her.  The girl’s only crime was that her school fees were allegedly* £5,100 (the equivalent of less than two terms) in arrears. She was humiliated in a way that a Texan or Californian court would probably be happy to award damages for.

The girl’s family had been particularly hard hit by the credit crunch: the unexpected arrival of a new baby and the demise of a business whose client base was heavily weighted with estate agencies coupled with an ex-husband with court-ordered responsibility for school fees and child support who had not been able to meet those obligations had all meant arrears of school fees had accumulated.  The mother offered to assume the fees going forward to see her daughter through the year but was unable to assume the arrears incurred by her ex-husband.  This was, apparently, unacceptable to the school.  The mother had anticipated that the cash flows would not be available going forward on a long term basis and had secured a place for her daughter at a local secondary school for September but no one could take her before.  It would have been easy for the school to allow the mother to assume the fees for the remaining two terms and to pursue the father for the arrears separately. The girl would have been spared the humiliation she suffered and the trauma of being left without a school mid-year.  One also has to wonder whether the school can, in this economy, fill the girl’s place mid-year. If not, what is the opportunity cost of allowing the girl to continue at the school….especially if her mother could borrow the money to keep her in school until the end of the year?

Schools may be businesses, but they are also human businesses which touch on human dignity in a similar vein to hospitals.  In my mind, they have a greater duty to their clients than businesses in less “human” industries.  Moreover those schools that are charities (as the Girls’ Day School Trust is) arguably have an ever greater duty as a charity.  The GDST’s alleged* treatment of its pupil on the first day back at school in January was the antithesis of all things charitable.

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* I know the girl in question and heard her account firsthand but feel compelled, given the increasing litigiousness of fee-paying schools, to caveat this posting appropriately.

The public benefit that will cut out the middle classes

Two weeks ago, I got into a heated argument at the Balham Bowling Club, a trendy little bar in Balham. A barroom brawl, you ask? Or a case of twenty something IT or PR girls cat fighting for the local twenty something hunk? Not quite. The occasion was a friend’s 40^th birthday party and the subject of discussion was the public benefit provided by fee-charging charitable schools.

I’d met A earlier in the evening and had had a delightful conversation about schools with her. When B, her equally delightful husband, joined in, he mentioned that his oldest child was attending a school of the original Dulwich Estate. He was bemoaning the level of fees and the prospect of even higher fees so that the school could offer bursaries to others. But B felt that he should not have to pay more than the cost of his own child’s education. Frankly, I could sympathise, but I found myself spouting off about public benefit and the fact that these endowed schools had benefited from decades and even centuries from their charitable status and therefore could not squirrel out of their public benefit obligations under the (relatively new) Charities Act 2006.

All of this raises tough issues for middle class parents who want to send their children to charitable independent schools. Under the 2006 Charities Act, charities which operate schools need to affirmatively demonstrate that they provide a public benefit. This used to be presumed under the old law. Now, the onus is on them. Last week, the Charities Commission, which regulates charities in England and Wales, issued guidance on what constitutes a public benefit and how this obligation can be discharged. Reading between the lines of that guidance, it seemed pretty clear to me that the easiest way to discharge the public benefit obligation is through the provision of bursaries and the sharing of resources (such as teacher time) or the sponsorship of academies —- all of which involve incremental costs to the charities which must, in the case of unendowed charitable schools, find the money elsewhere.

The problem is that with the exception of a small handful of charities operating independent schools (such as Christ’s Hospital, Whitgift Foundation, Eton, the Dulwich Estate and Winchester), most charitable schools do not have any significant endowment which allows them to allocate investment income to bursaries and other sure-fire ways of meeting the new public benefit requirement. For those schools, the trustees are under pressure to ensure that they fulfil the requirements of the new Act, and in the absence of a prescribed path by the Charities Commission, many will feel the need to take what seems to be the most obvious way of fulfilling that requirement: bursaries. The catch-22, however, is that the money for the bursaries has to come from somewhere and in the absence of endowments, that means full-fee paying parents.

So what are parents to do? Well, they can choose to send their children to a non-charity independent school. Many of these are propriety commercial operations with a profit motive, so while parents may not be contributing to the fees to send the kid from the neighbouring council estate to their child’s prep, the profit motive may mean that they are paying a similar amount to line the pockets of the proprietor of the school. Of course, they can also choose to send their child to a non-charity independent school which is not-for-profit (like the schools of the New Model School Company) and rest assured that they are spending their hard-earned money on their own child and no one else’s.

The reality, however, is that most of this country’s independent schools are charities. Of the almost 1,300 schools which make up the Independent Schools Council, over a 1,000 are charities. And very few are endowed. All of these charities will have to comply with last week’s Charities Commission guidance. The effect, however, is that middle class parents sending their children to unendowed charitable schools will be priced out of those schools by increased fees to subsidised lower income families. It arguably won’t take long for those schools to become polarised with children of the upper classes and lower classes, with the middle classes noticeably absent. This clearly cannot be the right result.