Top Scottish private school fined after inquiry into fees cartel

A LEADING Scottish private school has been fined thousands of pounds for being part of a cartel that kept fees artificially high.

Strathallan School in Perth-shire was one of 50 independent establishments across the UK accused by the Office of Fair Trading (OFT) of breaking competition laws by sharing information about increases in pupils' fees.

It has emerged that an agreement has almost been reached between the OFT and the Independent Schools Council (ISC), which will see each of the schools pay a 10,000 fine, plus an ex-gratia contribution of about 60,000 to a charitable educational fund.

The OFT described the sanctions as "innovative and proportionate", while the ISC called the financial penalties "nominal".

Strathallan, which counts the top golfer Colin Montgomerie among its former pupils and charges boarders up to 6,895 a term, was the only Scottish school accused by the OFT after a two-and-a-half year investigation. Among the leading English schools named were Eton College, Harrow and Winchester.

The OFT claimed the schools exchanged information on their planned fee increases for the 2001-2, 2002-3 and 2003-4 academic years, in contravention of the Competition Act 1998. The schools had argued that they had been unaware the law had changed and had stopped sharing information as soon as they were told.

In a statement yesterday, the OFT said it was on the verge of resolving the matter following meetings with a steering group of the ISC. Under the proposal, the schools would admit their actions had contravened the Competition Act, but would make no admission of liability.

Vincent Smith, the director of competition enforcement at the OFT, said: "This is a novel and exceptional case. The offer at this stage in the case, after the issue of our statement of objections, provides an opportunity for an innovative and proportionate outcome to a case where we believe there has been a serious infringement of competition law."

Jonathan Shephard, who led the ISC steering group, said he was glad a resolution had been agreed. He said: "The settlement reached represents a sizeable cost for an inadvertent failure by the schools to recognise that the law had changed and for continuing to share information in a manner which had previously been perfectly legal.

"It does enable the schools to bring an early end to a matter that has occupied them for nearly three years."

No-one at Strathallan School was willing to comment on the issue yesterday.

Fiona Valpy, of the Scottish Council of Independent Schools, said the financial penalties imposed were still sizeable. "Independent schools don't exist to make huge profits and their fees aren't structured in that way, so anything like this is going to have a financial impact."

Seat of sporting excellence in rural Perthshire

Strathallan School was founded in 1913.

• The school is co-educational and is situated on a 150-acre campus in rural Perthshire.

• The school's headmaster is Bruce Thomson.

• It has about 450 pupils, with two-thirds boarding.

• Term fees range from 3,070 to 4,675 for day pupils and from 4,920 to 6,895 for boarding pupils.

• A number of scholarships are awarded each year, varying between 10 per cent and 50 per cent of the full fee.

• More than 95 per cent of the school's pupils go on to university or some other form of higher education.

• The school has seven boarding houses - one for junior pupils aged between ten and 13 and six senior houses for those aged from 13 to 18.

• Strathallan's most famous former pupil is the golfer Colin Montgomerie.

• Sport is central to the life of the school, with pupils taking part in activities such as hockey, badminton, netball, football and judo.