Education: Maintained and Independent Schools

Lord Lingfield Excerpts

Thursday 9th February 2017 Grand Committee

[Lord Lingfield (Con)]

My Lords, I thank my noble friend Lord Lexden for instigating this debate. I remind noble Lords of my education interests in the register.

I entirely support independent schools giving assistance and advice to schools in the state sector. My noble friend and other noble Lords have given examples of good practice in this area. However, I have several concerns. I would want to be sure that independent schools did not feel under pressure to join in. My noble friend’s speech today has caused me some anxiety, because charitable status could be in danger if schools do not co-operate with the Government’s wishes. Some are fearful that the reporting procedures could lead to the construction of a league table of achievement in the help they are able to give to the state sector.

At the moment, in principle, the removal of charitable status means that a school’s assets could be sequestered and given to another charity. That is unlikely to happen, as we know, but such a threat is still felt by independent schools to be in the air.

Charitable status brings with it certain fiscal advantages—usually cut-price local taxes, exemption from corporation taxes and the ability to obtain gift aid on donations towards certain charitable ends, although not of course on fee income. However, that is not the huge subsidy that some newspapers seem to imagine; independent school governors estimate that those tax advantages account for about 3% of income. There can be few schools which do not spend this on pupils from homes that cannot afford fees. Nationally, charitable status brings independent schools an annual notional tax saving of some £100 million; however, research suggests that they spend more than £260 million on bursaries—bringing it to the sum that my noble friend mentioned.

Independent schools have to tread carefully when assisting state schools. First, they have to reassure fee-paying parents that such a charitable effort is worth while and the cost of it unlikely to diminish their own children’s education; secondly, they have to be extremely careful not to give the appearance of patronage. However, if handled carefully, all this can be extremely beneficial. I have seen wonderful projects involving the teaching of reading by independent school sixth-formers at local primaries, from which the older students gained as much as the younger ones. A good number of cadet units in independent schools have been instrumental in setting up CCF companies in local secondaries. In several cases these now meet as joint forces.

We have heard a great deal in the past, although little today, about charitable independent schools being able to prove public benefit. A landmark judicial review quite properly defined such benefit rather more liberally than the then chairman of the Charity Commission had promulgated. It is true, however, that the modern conception of charity somehow sits uncomfortably with independent schools, which are often seen, usually unfairly, as the preserve of the wealthy. This was guyed really rather well by Ian Hislop in a spoof charity appeal in which he said, “A gift of only £50 will buy a boater for Henrietta”.

On 12 September last year, I asked the Minister whether independent schools that wish to do so will be able to opt out of charitable status and thereby demit the 3% or 4% of their income. His reply was that they will. This is good news, and I suggest that the law could assist those who so wished to opt out by allowing them to keep their current assets and be given the status of what I believe in Scotland are public trusts with no tax advantages. I asked because the governing bodies of independent schools—I was for some years the chairman of one—tend to take a very long-term view. Many of them have survived for hundreds of years by so doing. Threatened in the not-too-distant past by the Charity Commission, some have told me that they fear that threat will someday come again and that they would value being able to opt out, even if it meant the loss of fiscal advantages. Most charitable schools in the independent sector will doubtless wish to remain as charities, with the advantages and possible disadvantages brought by this, but those that do not should, in my view, have the option.

There is one great gift that schools in the private sector can give to the state sector, a gift that costs them nothing. It is the example they set, especially in the use of their independence. Each is a separate, autonomous corporate body; even those schools in groups such as the Woodard Foundation retain their clear individuality. Decisions about financial priorities, staffing, curriculum, buildings and plant are made by the governors and professionals on the spot, without reference to any local or national bureaucracies. This was the freedom that first the grant-maintained schools movement of the 1990s and then its successor, the academies programme, promised state schools and there is no better way of raising standards in them. There is every possible good reason for state and independent schools to work closely together, but it must be made very clear that such arrangements are purely voluntary on both sides.