Private schools see themselves as businesses. Lets treat them that way.

Every so often I check in on one of the longest running sagas in the education world – that of the charitable status of fee-charging schools. It is an epic tale going back 800 years to the foundation of charity schools like Eton and Winchester. The intricate web of endowments enjoyed by some of these schools makes the issue of abolishing charitable status altogether more complex than some assume.

So reform is the only realistic option for change, and the debate about how to reform charitable status has become an inadequate proxy for the thornier issue of how we tackle the “social apartheid” (the words of a private school head Anthony Seldon not me) engendered by fee charging schools. If we can’t get rid of private schools altogether, how do we make them work harder for the public benefit of those beyond their immediate clientele and offer more than what Ofsted chief inspector Michael Wilshaw described last week as “crumbs from their table”?

It is almost ten years since the Labour government announced its intention to reform charity law. At the time the Independent School’s Council had produced a report called  “Good Neighbours” to chronicle what the sector was doing to justify its public benefit.. Around ten per cent of schools surveyed were taking part in government funded partnership programmes. Of the rest, around half didn’t do anything; the others mostly charged to rent out their lavish facilities or took part in the sort of community activities that most good state schools offer routinely.

One would have thought that made a suitable case for reform but the then government baulked at laying down more stringent ground rules legislation. Instead the Charity Commission was given the job of issuing guidance on the public benefit test and monitoring how the schools performed.

But the private schools didn’t like the guidance. They judicially reviewed the Charity Commission. In its judgment, the Upper Tribunal said that the commission needed to rewrite sections of its guidance and couldn’t insist on bursaries, but also that private schools must provide more than “tokenistic” benefits, especially if they “gold plate” their services by offering luxuries such as beagling, polo and golf courses.

The Charity Commissions (now chaired by old Etonian William Shawcross) has finally come up with new guidance.  Bursaries are no longer required, there are some definitions of what “ more than tokenistic” or “minimal” might mean, but in the end it is up to the schools’ trustees to decide.

In a recent revealing interview for the Third Sector magazine , Peter Walker from the Association of Governing Bodies of Independent Schools helpfully explained that an independent school, regardless of charitable status, has to be “run as a business”.  “In most cases, governors will be trustees of the charity and directors of the company. Wearing their directors’ hats, their principal responsibility is to maintain the school as a viable concern. “ he added.

His remarks were echoed by Alex McGrath, head of the Kings School Ely, who last week reported that unjustifiably high fees were pricing middle-income families out of the private school market in favour of a wealthy elite.

So we seem to have travelled a very small distance since 2004. Fee charging schools pay lip service to charitable status, the Charity Commission takes a back seat and the politicians still bury their heads in the sand.

But only legislation can deal with this now; legislation that sets out significant standards of public benefit for fee-charging schools, full disclosure and robust penalties for those that don’t meet the higher bar. When the current chair of the HMC and head of the Magdalene College School Tim Hands claimed last week that private schools offered fairer access to the less well off than some state comprehensives, we had no way of knowing whether that was true or not.

We should have a register bringing together in one place detailed information of what each fee-charging school does to justify its charitable status, preferably in its local community, with open minutes of how those decisions were taken and a breakdown of the socio economic background of each school’s students. How many of the pupils receiving bursaries or scholarships would be eligible for the pupil premium for example? Schools that fail to meet the standards could have their business rate exemption (a tax benefit of charitable status ) removed. If they see themselves as businesses a fiscal solution seems entirely appropriate.

One of the key tenets of the public benefit test is benefit to the poor. The state sector is rightly held under an ever more powerful light in this regard, while the private school “charities” sail blithely on, pocketing hundreds of thousands of pounds of tax breaks only minimal accountability. Another decade or so of fiddling around with charity law won’t address this.  Only a political or tax solution will work now.

This article first appeared in the Guardian