Independent Schools: Regulation of Proprietors

Jim Shannon Excerpts

Tuesday 7th July 2026 Commons Chamber

[Mary Kelly Foy]

I thank my hon. Friend for the intervention. I completely agree. The way in which the company has acted towards pupils, parents and staff is outrageous. The least it could do is to provide some clarity and support going forward. Later in my speech, I will ask the Minister about some lessons that can be learned.

[Jim Shannon (Strangford) (DUP)]

I commend the hon. Lady on securing this debate. She has brought to the attention of the House and the Minister to something that is incredibly important: the takeover of any school with little or no discussions with the staff, the principal, or the board of governors, little or no contact with the parents, and certainly no talk or discussions with those who have input into the school. Does she share my concern—I believe that she will—that when influences from outside this country have bought a school, through whatever the allegedly nefarious process may be, the only way in which that can be stopped is for the Government and our Minister to bring in legislation that ensures that it cannot happen over the heads of local people at a school of historical importance?

[Mary Kelly Foy]

I agree with the hon. Gentleman. It seems that this overseas company had no intention of educating our children in the UK, and legislation should be strengthened or put in place to stop this happening again.

It is as though GGE saw the fallout of their decision to inform Malvern in advance and attempted to hide from any further scrutiny by giving the other schools zero notice. It is abhorrent. When I contacted GGE’s directors to demand answers, they were at pains to point out to me that they have done all they can to support staff and families. They even alluded to the Government’s introduction of VAT on independent school fees. That is nonsense. Since the VAT changes were announced, Durham high school’s roll only dipped from 288 to 281—a net loss of just seven pupils. The school has a physical capacity for 650 pupils, and a financial break-even point of roughly 350. A senior staff member said in their parting message:

“Whatever you read, this isn’t a VAT story. It isn’t a falling rolls or unstoppable decline story. The truth is deeper, and more complex, and eventually truth will out.”

It seems clear that there was never any genuine effort by GGE to make this school a success. Speaking to union representatives at the school, I am told that repeated requests to see even a basic plan for how the company would secure the school’s future were rebuffed.

What do we know about GGE? Very little seems to be the answer. It was only incorporated in the UK in April 2025, and I understand that it has not yet been possible to assess its level of available cash, debt levels, profitability or inter-company lending. The structure of the company seems equally opaque, spread across several companies, school-operating companies and overseas interests. One of those beneficial owners ultimately traces back to the Cayman Islands, with no transparency at that point.

What is clear is that one person holds a significant amount of power, and they were the person with overall control of the school until its closure. Shangqin Gao, a Chinese national, holds roughly 75% of GGE’s shares. As I understand it, the school has had no contact with this person. The House may note that this individual is also linked to two other businesses: Shine Space Management Ltd and Galaxy Capital Real Estate. The latter was incorporated only two years before the purchase of Durham high school.

All this background leads us to the crux of the situation: more than 280 children have been left stranded without a school, staff have been left without jobs and young women who sat their public exams this summer may not even be able to collect their results in the school where they studied. Local suppliers have been left facing significant losses due to unpaid invoices. Crucially, children with additional needs who thrived in this intimate environment have been thrown into limbo. They must now search for alternative specialist provision potentially miles away from home, or face being absorbed into mainstream settings.

Our local secondary state schools that provide top-class education and often win prestigious awards—such as St Leonard’s, Durham Johnston and Belmont—are all just about full. There is not enough capacity to easily absorb these pupils. As well as throwing these families into crisis, GGE has also heaped pressure on the local authority. Will the Minister liaise with Durham county council to ensure that the admissions team is appropriately supported?

The conduct of GGE in the final days, weeks and months of the school’s operation reveals the true nature of this business.

As the company ran down the school, the financial team carefully managed the remaining funds to ensure they could pay staff salaries for June, despite GGE blocking the school from paying suppliers. Yet days before payroll was due, an unexpected invoice was received from GGE that would have wiped out those payments entirely, and GGE required the massive bill to be paid that same day. Thankfully, the school business manager prioritised the livelihoods of the hard-working staff, paid the wages and ignored the demand. However, in a final blow to devastated staff, I heard just yesterday that the administrators have informed them they cannot claim unpaid salaries for July and August, despite already carrying out their work for the academic year.

A cynical mind would look at how Durham Education Limited was put into administration and conclude that it benefits a parent company to position itself as a major debtor upon any future sale, especially when the ultimate ownership of the land is in doubt. Despite assurances from GGE, the entire debacle bears the hallmarks of a land grab. In Durham, the prime real estate on which Farewell Hall sits is estimated to be worth around £10 million. That brings me to the core question: what can the Government do to stop predatory overseas companies asset-stripping our educational institutions and treating our children’s futures as real estate speculation?

Schools such as Durham high served as a safety valve for the local authority's overstretched school place allocations. Despite that, entire families have been thrown to the wolves so that an overseas corporate entity can access prime land on the edge of a historic city centre. Section 128 of the Education and Skills Act 2008 rightly gives the Secretary of State for Education the power to bar unsuitable individuals from managing independent schools. Yet with the opaque structure of the business and the fact GGE has been able to rapidly churn through directors at Companies House, shuffling responsibilities and moving its statutory administrative offices to anonymous London addresses, it seems that oversight on such businesses is patchy. How can we ensure in the future that what has happened in Durham, Malvern and Ruthin does not happen elsewhere?

To be clear, my key asks of the Minister are as follows. Will the Minister help families in Durham, Ruthin and Malvern get clarity on what steps were taken by the Department for Education, Estyn and Ofsted to ensure the suitability of GGE? Will the Minister commit to reviewing the governance structure of all the affected schools? Will she advise me whether an independent investigation could be called into GGE’s management of Durham, Malvern and Ruthin to establish exactly what happened? Will she advise me on efforts that the Government, the local authority or the school community can take to preserve the Durham high school site for educational use, rather than allow a historical education asset to disappear? Finally, will the Minister take steps to close corporate loopholes and ensure proper regulation is in place for foreign investors in UK schools? We need robust legal mechanisms within the DFE to prevent foreign capital from severing historical school properties from their educational purposes. We need statutory protections that stop predatory owners transferring freeholds out of educational charities into private, for-profit shell companies.

What happened at Durham high school will not simply go away. My constituents may be down but they are certainly not out, and they are driven by a desire for justice. Though they understand it may be too late for their beloved school, they wish no other family or hard-working member of school staff to have to go through the pain and uncertainty that they have felt.

Last Friday, my team joined families, pupils, staff and trade unionists outside the school gates for a final act of solidarity. The compassion, mutual respect and dignity that was on display is something that GGE would do well to learn from. I am sure that all of us across the House might agree that no matter the nature of the establishment, the education of our children is a public good, not a real estate portfolio. What happened to Durham, Ruthin and Malvern cannot be allowed to happen again.

I will close with the words of Mrs Middleton, the acting head for the school’s final weeks, who has been highly commended for the compassion and dedication that she has shown to the entire school community during the most horrendous circumstances:

“On the final day we came together. Of course, there was sadness. There were tears. But there was also laughter, celebration, joy, and a deep sense of knowing one another. The hardest words I have had to say over these past few weeks were: “It’s time to go.” No one moved. So I left the stage, and Mrs Rochester and I walked the children out. Senior Leaders had planned to stand outside, greet parents and clap the children out. All the staff joined us. And for over an hour we clapped, talked, cried, hugged and clapped again. In that hour there was no complaining. No anger. Just togetherness. A community to the very end.”