Is it justifiable that public schools have charitable status leading to massive tax savings, but state schools don't?

[motherogod]

Many posters here have defended private education in terms of parental choice - fine - but I'd like to know how it can be justified that public schools have charitable status, particularly as half of them then have an 80% deduction on the rates they pay, whereas schools run by councils have to pay business rates. Academies, foundation schools and voluntary aided schools also receive an 80% reduction.

@scaevola

If you want to look at Eton's charitable record it's all published in their website.

The headline figures you cite are eyecatching when presented like that, but that comes in at only £55 per pupil per term.

If that figure includes private nurseries, it will be even lower.

If there was a currently legal easy way to turn charitable assets into private ones, I think most schools would be flocking to take it. At the moment it means complying with the law on closing charities, which would effectively mean the closure of the schools entirely.

I've never seen a proper proposal for how the change could be achieved. If there is one floating around, wouid you link it?

I'm not sure if the 'per pupil per term' is the best way to assess this - the income/assets of the charity seem to be more meaningful. I know a charity doesn't necessarily have to be for the greater good - but the key reason these schools have charitable status is because they 'advance education' - maybe so, but only 1% of all their students pay no fees, and they only educate 7% of the population so the charity status seems pretty disingenuous. Already wealthy people seem to benefit most from the bursaries and scholarships. www.theguardian.com/education/2018/jun/03/private-schools-abuse-charity-status-by-giving-discounts-to-richer-families

That's a very interesting perspective (thank you) that it would be difficult for the schools to become private entities rather than charities and that the schools would prefer it. It also flies in the face of their being any really good justification for the charitable status - other than their original purpose.

I don't know about how change might be achieved and there does seem to be far more disquiet about the charitable status than defence of it - this report sets some of it out:

commonslibrary.parliament.uk/research-briefings/sn05222/#:~:text=The%20advancement%20of%20education%20is,are%20for%20the%20public%20benefit.

@Penguin007

I've read the article. No new news there. Most parents pay for fees from income, which gives no tax relief.

Why are you asking about charitable status? Is this fodder for an article about the A level debacle and private vs state schools?

No, not fodder for any article, although the A level debacle did bring it to mind - and yes I've read some posts about some private school students also having grades reduced. I'm asking because - like I said - there seem to be far more articles and common sense reasons why these schools shouldn't be charities and I wanted to know if there are reasonable arguments why they should be - hence posting in AIBU. I could have titled it AIBU to not understand the justification for public schools retaining their charitable status, one outcome of which is that more than 50% pay highly reduced rates whereas state schools (not voluntary, academies and special schools) don't. But that might have been a bit long winded!

@Lucked

Private schools in Scotland now have to pay full business rates but maintain their charity status I think. So yeah it can be done.

ok, thank you that's interesting

@MillieEpple

I would talk about the charities that provide education for some of the most disabled children in society but past MN experience tells me that people wont be very interested.

Yep I have seen this get ignored time and time again.

a lot of private schools were founded before any kind of state education existed. they have had a charitable mission to educate - with some receiving that free or subsidised and others paying cost-price (plus a premium to help fund the aforementioned) - since before most charity legislation was written.

state schools can be incorporated as charities if it is advantageous to do so. In the case of a school that is funded by the tax payer, any change that saved the school budget any sum of money would obviously immediately reduce the tax income of the state by the same amount so there is no net gain, just a lot of admin.

Providing excellent education is a good thing. Excellence in education requires more money per pupil that the average tax payer is willing to vote for. Independent organisations can offer an excellent education without making a profit from it. Providing something that is a good thing (in this case Education) without making a profit from it is fundamentally what charity means under charity law. if you have a problem with this the issue is your own lack of understanding of the meaning of the word charity.

Charities cannot be converted into non-charities and still keep their assets. they only hold and own their assets on the understanding that they will be used for their charitable purposes (in this case education). if a charity is to cease operation as a charity then all their assets must be transferred to other charities pursuing the same goals. they could not continue to exist as they would have no assets. It would be possible for the government to nationalise all private schools and force them to become state schools as they could continue to operate as a charity but receive their income from the state rather than the parents. And if a parent has a spare £30k per year that they are willing to spend to improve the education and life chances of their offspring, I don't expect that nationalising the private schools will stop them from finding a way to spend that money on their child.

This article highlights some of the issues around changing from charitable status.
www.thirdsector.co.uk/end-charity-status/article/1284098

Doesn’t bother me. The parents paying fees will be likely contributing a lot via personal tax and taking little from the state bar NHS maybe. The children will very likely go onto have good careers and pay tax themselves and the local authorities do not have to find state places for those children.

I'm not sure if the 'per pupil per term' is the best way to assess this

I'm sure you don't - £54 per pupil/term is way less eyecatching than £100m.

But it's the same figure.

And it's money the councils never had - not a sum they have lost.

I get why they might want to be squeezing out every bit of revenue they can. But slapping rates on your local charities because you think some should be able to afford it, is not the way to do that.

If there is ever a good proposal that ends the charitable status of private schools without unintended consequences to other charities (especially those whose aims also include the provision of education), then making changes might well be the right way to go.

Is there such a proposal for how it would actually be carried out ?

Independent schools receive huge financial advantages over and above charitable status tax breaks. The level of support from the state is actually higher per capita than for many state school pupils.

Examples include things like free CCF provision including all uniforms and equipment for many independent schools but state schools being charged.
Free CPD and other training for their teaching staff funded by state.

Obviously tax breaks and an ability to have a trading arm and make money, which is denied to MATS and state schools.

The bursaries are a joke usually. Few go to genuinely poor children. Some aren’t even means tested. If a bursary is 50% of £40, 000 a poor family aren’t going to have the opportunity, are they?

Charitable work is often tokenism and patronising. Letting a primary school visit your wonderful facilities once a year is a marketing opportunity not a charitable endeavour.

Quoting Eton as an example tells me you haven't really looked in depth.

Eton is one of the schools that can not only provide extensive evidence for keeping its charitable status, but will also be least affected if it loses that status.

Absolutely many own land and deeds across regions so landlords and gaining huge revenue this way too - also , many previous attendees to private schools ‘pay’ into school funds to secure places for future children and family members - so wrong on so many levels

I think you're wrong about CCF - both Brown and Cameron put millions into CCF in maintained schools, and the (very small) fees for kit and activities are standard across all units.

Is it perhaps an issue with things like 'who pays for the minibus?' which will differ, depending on whether/how many the school owns, and how many activities have to be held off-site

*I'm not sure if the 'per pupil per term' is the best way to assess this

I'm sure you don't - £54 per pupil/term is way less eyecatching than £100m.*

Easy, no need to infer that I'm spinning this to be eye-catching. It not making much difference per student doesn't seem very sound reasoning, whatever the figures.

Is there such a proposal for how it would actually be carried out ?

Not that I'm aware of, but presumably if it has been policy for some political parties, and subject to reports, and what seem to be well researched articles it's not a completely outlandish proposal. I haven't just pulled it out of the air. So it seems there are very few arguments for maintaining the charitable status other than that it would be difficult to dismantle it.

Bursaries is a good point well off families are often approached to take a smaller scholarships on the priviso that this goes do poorer pupils - Christ’s hospital is a good example of a very fair private school as try to emulate fairness and opportunity to all

Take if from me, there really hasn't been a proper policy in recent years, despite the intermittent noise in the press about it.

If/when someone can actually propose how to recast charity law to permit this sort of change, then the debate about it would be transformed.

And yes, of course inferences wouid be drawn from his figures are presented.

You have BTW gone for a figure which is much lower than the total estimated value of charitable status, which is £200 per pupil/term.

Is this deliberate salami slicing?

Some schools, including my DD's, asks you to take the name of the scholarship if awarded, but to pay full fees if you can afford it, to allow more children to get bursaries. DD's best friend was on 100% bursary including full boarding and train fares home.

It's a matter of charity law, and it will need to be taken in the round.

I'm not aware of any proposals of how it can be done without effects on the whole sector.

I have never seen an actual proposal about how it could be done, let alone one which the charity sector had reasonably solid support for, and I think this is something where the devil really is in the detail.

@Tanith

Quoting Eton as an example tells me you haven't really looked in depth.

Eton is one of the schools that can not only provide extensive evidence for keeping its charitable status, but will also be least affected if it loses that status.

Thank you, I didn't say I'd looked into it in great depth. I didn't post because I'm an expert, I know some private schools have fewer assets than Eton. The ones I'm most familiar with due to cousins and university friends are Eton, Dulwich, and St Edwards in Oxford. My kids aren't in school in the UK so I've no 'skin in the game' other than being a bit taken aback at the ways there seems no really grounded justification for the charitable status.

Why just private schools? What about other charities that could be seen as elitist like the Royal Opera House? St John and St Elizabeth Hospital is charitable private hospital (the income generated actually funds a hospice).

@scaevola

It's a matter of charity law, and it will need to be taken in the round.

I'm not aware of any proposals of how it can be done without effects on the whole sector.

I have never seen an actual proposal about how it could be done, let alone one which the charity sector had reasonably solid support for, and I think this is something where the devil really is in the detail.

Ok thanks. I wonder is there any public school which has become a state school? In Ireland, private schools can become state schools but it's a different scenario as they're usually run by religious orders/trusts, the state pays the salaries of private secondary school teachers, and fees for private secondary day schools are c.£4000-6000 per year (i.e. not per term).

Private schools absolutely should not have charitable status state schools receive funding (some woefully inadequate)

As for the argument well the fees will be passed on then so be it you will never find so many parents moaning about being hard up more that at a coffee morning at the local prep school - the money will be found in some way and of course most of the schools can offer bursaries this isn’t just for the good work towards the community it’s too reflects well and on their results. The are run as businesses many are absolutely raking it in (not all) with overseas students fees, application fees, extra tuition fees if so many are struggling then they need to work on how they manage their finances

And state schools have had to tighten their budgets then so can private schools

It won’t be a popular opinion on here

The College of Law was a charity until it got permission to change. It then became the university of law and an legal education foundation was set up to pusue its charitable aims which is a solid example of how some big public school names could change their business structure.
But many SEN achools are charities and have every right to remain so.

@ChazsBrilliantAttitude

Why just private schools? What about other charities that could be seen as elitist like the Royal Opera House? St John and St Elizabeth Hospital is charitable private hospital (the income generated actually funds a hospice).

I guess there is wider interest in the charitable status of public schools - and public schools in general because so many of those in positions of power in the UK went to public schools despite only 7% of the population having done so (eg 2/3 of the cabinet). As such, people may and do question how representative they are, and in whose interests they make policy decisions or - as with the A level mess - if their schooling means they are less interested in a meritocratic society. Again, no real skin in the game, just answering your question.

From memory, the voluntary grammars (not the maintained again from memory) in Northern Ireland transformed when they moved to the state sector. You could see if anything from there could be used to inform your position.

Haven’t time to google for you right now.

@ItsAlwaysSunnyOnMN

DS's school went bankrupt after he had left. Building closed, no access to long-used facilities for local swimmming clubs, triathlete club, rugby club etc. Loss of jobs for many local people. Not just teachers, but gardeners, cleaners, cooks... A loss to the whole community. And lots of other schools are going to struggle in September if international students don't come back.