Can private school really be classed as charity?

Published on Tuesday 28 October 2008 21:03

WHEN the first charity schools were set up in the 17th century, the concept of the "public good" was straightforward. Many schools were established with the admirable intention of relieving poverty and benefiting the community.

Schools such as George Heriot's in Edinburgh, founded in 1628, were there to help fatherless children. That was fine when schools were run for the education of the poor or the needy, but these days the idea of independent schools having charitable status is hotly debated. Critics believe it is both absurd and obscene that wealthier parents can shell out 20,000 a year to give their little darlings all the benefits of a private education, while such schools are entitled to kickbacks from the Treasury in the form of tax and rates relief.

Is it right and proper, they ask, that exclusive schools such as Fettes or Gordonstoun should have the same tax benefits as a cancer charity?

All charity law was based on a 1601 act, followed by a mass of court judgments. The law lays down a number of categories that count as charitable – "the relief of poverty" and "the benefit of the community". It seems clear that these criteria do not always sit happily with the idea of a modern, fee-paying school.

Eric Wilkinson, professor of education at the University of Glasgow, believes we have moved a long way from the original premise of schools demonstrating social responsibility, back in the 17th century.

"They've moved a long way from the justification, which was children from poorer backgrounds could get some form of education," he says. "That was back in the 17th century… and it was deemed as a liberal, worthy procedure. These days, most of the independent schools are for those who can afford it; they're for rich kids.

"The government is trying to re-establish a bit of balance between the original justification and what they do now.

"It's an issue that gets people hot under the collar. It seems justifiable that, if they are to continue to benefit from state subsidies and charitable status, they should be making some contribution to the public good. Places like Eton and Harrow will have to justify their existence in terms of public good."

The debate has raged in recent days, as it emerged that four of Scotland's leading independent schools will be stripped of their charitable status, unless they make major changes to the way they operate.

The country's independent schools faced an anxious wait to find out whether they could keep their status, as the charity regulator published a report yesterday on its investigations.

Across Scotland, 11 private schools have undergone a thorough inspection by the Office of the Scottish Charity Regulator (OSCR) to see whether they benefit the public enough to be classed as charities, giving them thousands of pounds of tax breaks each year.

Four schools under inspection were told they had failed to meet the criteria of charitable status – they were Merchiston Castle in Edinburgh; Hutchesons' in Glasgow; Lomond in Helensburgh, and St Leonards in St Andrews.

Heriot's and Gordonstoun, Prince Charles's former school, were told their charitable status was secure.

But the burning issue is whether such independent schools are doing enough for the public good or simply benefiting from Treasury handouts and rate rebates. Lending out a playing field in the vast grounds of a private school for a few days a year or hosting an annual Rag Day for the underprivileged may not be enough to satisfy the dissenters.

Supporters of independent schools regard them as an important part of the fabric of society – centres of excellence, nurturing the nation's future scientists and entrepreneurs, which, in the long term, benefit everyone.

And, it is argued, there is more than a hint of envy from those who simply dismiss the ideology of private education out of hand.

Private schools are said to relieve the state of the burden of educating thousands of children, while their parents continue to pay their taxes. According to a 1991 survey, independent schools gave away 32 per cent more in help with pupils' fees than the tax relief they gained. And tax relief pales into insignificance against the 1 billion at least that independent-sector parents save the state by paying twice for education, through taxes as well as school fees.

Harrow School, for years regarded as one of the most elitist in the country, announced in January it was embarking on a 40 million fundraising drive to provide further endowments to pay for children whose parents cannot afford the 25,000-a-year fees. Eton College has, for many years, provided free education for a number of children who have attended state primary schools. In Scotland, a number of boarding schools continue to subsidise fees, while day schools such as Heriot's and George Watson's, also in Edinburgh, have educated hundreds of children at little or no cost to their parents.

Judith Sischy, director of the Scottish Council for Independent Schools, points to Heriot's, Gordonstoun and the High School of Dundee, which have all demonstrated the way in which they benefit the public good.

"The schools can be fee-paying and meet the criteria," she says. "Schools like the High School of Dundee have a wide range of awards and a high proportion of bursaries for children who would not otherwise get that kind of education.

"A high proportion of their income is given away in bursaries. And these awards are means-tested."

The whole issue of private education has divided public and politicians for generations. In 2005, many MSPs were scathing about the benefits of independent schools, branding them elitist and questioning why they were entitled to tax and rates relief. Critics say the schools should simply stop pretending to be charities. Lord George Foulkes, a Labour MSP, believes most members of the public would be surprised to discover independent schools are classed as charities at all.

"I think the private schools have been sticking their heads in the sand, hoping this will all go away, and now the chickens are coming home to roost," he says. "Private secondary schools in Edinburgh teach 25 per cent of pupils there, and are the biggest cause of social division within the city.

"I said some time ago that in order to qualify for charitable status, they should provide scholarships for disadvantaged children, open their facilities to the community and participate more in public education and curriculum development. They have to have a major review of their position, otherwise they will all, rightly in my view, lose their charitable status."

All class acts, but at a price – the institutions under scrutiny

ST LEONARDS School, in St Andrews, dates back to 1877.

The school has its own campus on the outskirts of the Fife town. Open to girls and boys aged from five to 18, and offering optional boarding from the age of 12, the school has strong links to nearby St Andrews University.

Annual fees are up to 23,346 for boarding, and range from 7,110-7,971 for pupils in year one to seven.

The governing council annually offers a number of means-tested places for children.

Hutchesons' Grammar, in Glasgow, dates back to the 17th century, when it was founded by two merchants. The boys' grammar school and the girls' grammar merged in 1975.

Annual fees range from 6,722 for primary one pupils to 8,878 for S1 pupils.

A number of bursaries are awarded every year by the school, based on academic merit and financial need.

Lomond School, in Helensburgh, caters for both day and boarding pupils, boys and girls, from the age of 3-18.

In 2007 inspectors gave it the highest number of "excellent" ratings of any secondary school in Scotland.

Fees range from 895 per term for the nursery classes and 2,805 per term for the senior school.

Extra tuition in most academic subjects and most musical instruments is available at an extra cost of up to 27.80 per lesson.

School trips range from canoeing expeditions to Sweden and a week of trekking in Morocco or a week at a language school in Nice.

Merchiston Castle is a boarding and day school in Edinburgh for boys aged eight to 18 which is this year celebrating its 175th anniversary. The school was founded in 1828 and in 1833, it was established in Merchiston Castle, an early 15th-century tower in Edinburgh which in 1550 was the birth place of John Napier, inventor of logarithms.

In 1930, the decision was made to move to the current greenfield site at Colinton, three miles further along the same road. The present day main buildings date from this time, though 18th-century Colinton House, the original centre piece of the estate, now houses the science department.

Fees for day pupils range from 3,665 to 5,735 per term. For boarders, the fees range from 5,195 to 7,920.