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.

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.

Eton for less

Ever on the lookout for a good deal, I thought I’d bring yet another one to your collective attention. My main concern has hitherto always been the affordability of independent education for the middle classes with children who don’t quite make it over the scholarship hurdle because, let’s face it, most kids aren’t going to win scholarships. But let’s humour ourselves today and just take a minute to look at some of the opportunities for high ability kids at state schools to gain entry to one of the most elite bastions of this country: Eton College.

Eton now costs over £28,000 per year, and that’s just for tuition and boarding. Count on an extra thousand or so for the extras: music lessons, tuck, uniform, etc. Princes William and Harry attended, as has many pages’ worth of entries in Burke’s Peerage. The school’s name is synonymous with all things elite.

It was reported this week that Eton is aspiring (like some other schools who have also come under heavy fire from the Charities Commission, I should add) to make needs blind admissions within ten years’ time. To fund this, it is raising funds for an endowment to ensure that any boy who gains admission will not be turned away because of his family’s inability to pay. That’s nice for those of you with newborns, but those of you with children in state primary schools right now may want to take note of some pretty wonderful deals on offer from Eton (of course, in part courtesy of the generous tax advantages afforded to charities by the tax system which we all pay into.)

Beginning in September 2009, Eton will offer New Foundation Scholarships to state school boys in Year 8 who would not normally be able to attend Eton for financial reasons and who are not in a position (presumedly because of their situation and prior schooling) to prepare for Eton’s other scholarships, which require knowledge that they may not have had an opportunity to gain. The application deadline is in mid-December (ie now!) for the January test and entry in September 2009. Given that this is the first year this scholarship is offered, the word may not be out yet about it, so if your son has attended a state school for the past three years, it may be worthwhile taking a punt.

Eton began offering Junior Music Scholarships in 2001. Only one junior music scholarship is offered each year. To be eligible, a boy must be in Year 5 at a state school (and he must have been in the state sector for three years). The level of ability is usually high; Eton notes that Grade 5 music ability at age ten would be a benchmark. Successful candidates are sent to St George’s School, Windsor, as boarders for three years and are guaranteed a place at Eton thereafter. Eton pays for both and music lessons (unless the parents are able to contribute a portion.)

Finally, since 1972, Eton has offered several Junior Scholarships every year. These are awarded to boys in state schools (and have been for three years) who are of high academic promise who would benefit from the opportunity of attending Eton, and who would contribute to the life of the school. Snowdon has heard via the grapevine that there are not always a lot of applicants for these scholarships. Boys apply for these scholarships in Year 5; I believe the test is in January or February and you need to get your application in a few weeks in advance of this, so if your son is in Year 5 now, think about applying right now. If selected, a boy attends a prep school near his home or a boarding school (if no suitable prep is available) and then enters Eton in Year 9 (or F block, as it is called at Eton; there is a whole new lingo you’ll have to come to grips with if your son takes up a place there.) As with the Junior Music Scholarships, Eton will pick up the full tab of the prep and Eton where the parents are unable to make a contribution.

For more information, see: http://www.etoncollege.com/Scholarships.aspx

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On 1 November, I wrote in From London day school to …. boarding school? Are you outta your mind? about Christ’s Hospital School. In addition to the sliding scale fees at that school, children residing in the Borough of Reading, the ancient Borough of Newbury (including Thatcham and Hungerford) and the ancient Parish of Twickenham (some adjacent parishes may also be eligible) and girls who are the daughters of a parent employee (or past employee) of the City of London are eligible to apply for a further 50% reduction of whatever fee they are assessed to pay. This year’s deadline has passed, but definitely worth considering for those with children currently in Year 5 and who can apply in the first term of Year 6 in 2009.

For more information, see: http://www.christs-hospital.org.uk/allaboutmoney2007-08.pdf