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.

The best kept British school secret…

Over the next few days, I’m going to share with you a few affordable school gems if your current school has become unaffordable. Note that I am not defining “affordable”. We each have our own snack brackets. Some of you have kids at the likes of Eton or Benenden which you can’t afford as we continue to be increasingly credit-crunched. You may still be able to afford other public schools (yes, there are more affordable public schools!)  Some of you may have kids at boarding schools further down the foodchain (aka at “minor” public schools, as Mr. Snowdon corrects me.) There are still options for you. And some of you may have kids in public day schools. There are still, unbelievably, options for you, too, to explore. Today, I’m going to start with the more expensive options, and during the course of the next week, I’ll work through the various snack bracket options.

We’re unique in the UK in having a small, relatively unpublicised state boarding school system.  There are under three dozen such schools in the UK, most of which offer 11-18 schooling .  A small handful cater to the primary level — but don’t get me  going on that one; as a North American, when I hear people talk about little Peregrine going to Summer Fields or Sunningdale at age 7, I always think of that famous saying: “The English hate children. They keep their dogs at home and send their kids off to high class kennels called Eton and Harrow”.  Having spent ten years in this country now, however, I have begun to appreciate that boarding school for older children may offer something special or at the very least be a necessity in some circumstances.  But I just don’t get it for primary school. Seven is just too bloody young to get rid of your kids.

State boarding schools are open to children who are holders of EU passports.  You pay no tuition but you do pay for boarding — currently around £3000 per term.  You can see why state boarding schools are of limited interest to those who cannot afford London day school fees — you’d be swapping one £10k price tag for another of a similar amount.  (I suppose you could still see it as a saving when you take into account the food the average teenager consumes at home. Oh, and the long hot showers which the meter now registers and which you now pay for…)  But for someone currently paying £15-25000 per year for a boarding school in the private sector in the UK, there are substantial savings.  If you’re a snob, you can still brag to your friends that little Arthur is “away at school” and still talk about him coming home for an “exeat”.  Since the state boarding schools are so little known, very few in your social circle need to know that your stock portfolio is a fraction of what it once was and that little Arthur has actually “gone state!” 

 There are other advantages to state boarding schools.  Some, such as Cranbrook in Kent (one of my favourites) are grammar schools.  Local kids have to sit an entrance exam; only those in the top ability band are offered places.  I think many at Cranbrook would agree that the intake for boarding places is of a slightly lower ability level.  Slighty above average Atticus could therefore get into a “better” school (academically) than he would otherwise get into as a day student at his local grammar school (assuming there is one) by sitting the 11+ in a grammar school district.  Other schools, such as Hockerill Anglo-European College, offer the international baccalaureate and have average scores to give IB schools Sevenoaks and King’s College Wimbledon a run for their money.  (I also loved this school’s language focus: I heard groups of pupils speaking in German and across the courtyard, another group speaking in Spanish; it clearly attracts EU pupils from other countries.) Old Swinford Hospital School in the West Midlands is another one of my favourites.  Once a public school, it is still steeped in all the tradition and physical plant one would expect of a public school.  There are approximately 30 other state boarding schools. I must admit that there are some I would not send my child to as a day pupil if I lived in the catchment area, so I certainly wouldn’t consider paying to send my child to board at those. But there are some good ones (including my favourites above) and they are certainly worth exploring.  Plus, with the Russell Group universities increasingly discriminating in favour of state school applicants, why not enjoy bragging about little Jack being at boarding school and giving him the best shot ever of getting into Oxbridge?

 For more information on the state boarding schools, see:  http://www.sbsa.org.uk