Private Schools proposal for up to 10,000 free places each year

[Aussiejazz]

What do you think of this idea to offer up to 10,000 free places to lower income families each year?

www.telegraph.co.uk/education/2016/12/09/government-serious-schools-work-everyone-will-jump-proposal/

throwingpebbles
You cannot revoke charitable status but you could put restrictions on the tax exemptions from certain activities

• such as education for profit when the reserves are above a certain number of year's running costs

some of the big schools are very aggressive landlords who are not charitable at all in the way they act.

No! Make all schools better.

It all went through a charities tribunal recently, which found that the giving of bursaries is neither necessary nor sufficient.

It didn't AFAIK rule on sponsoring academies our other partnerships with the state sector.

I think the lines in the green paper may well be rather less than they seem - it's essentially a restatement of the status quo.

The High Court ruled that the Charities Commission didn't have the power to insist on bursaries as the mechanism for schools to justify their charitable status. I fear that what the green paper actually means by legislation is legislation to counter that ruling so that the CC can dictate bursary numbers.

At least following this thread I did get round to giving feedback in the consultation! There's just about still time for anyone who hasn't. Very very frustrating set of questions, though.

Setting aside the rights or wrongs of the proposal and just thinking about practicalities for a moment ...

The proposers of this plan assume the Government will just give them the £5,550 per pupil the state system allocates for eachchild, walk away and leave them to do what (they think) they do best. But it wouldn't, and couldn't, be like that.

The spending of any public money requires outcomes to be rigorously monitored, so that "value for money" can be demonstrated to the public accounts committee. Schools would also have to meet state-school standards in Safeguarding and the like. That means the private schools would have to take on at least some of the administrative overheads that State schools have to deal with. They might even have to be subject to the same levels of scrutiny by Ofsted.

The governance of the schools would surely also have to become as transparent as that of state schools too, with all conflicts of interest declared, in order to demonstrate that not a penny of public money was being siphoned off into anything inappropriate.

If I'm right, then it'll be interesting to see if the price tag goes up or the offer is withdrawn once the reality kicks in!

You have misunderstood talkinpeace
It goes without saying that they have to act in accordance with their charitable objectives. But if they do not/cannot, the option of revoking the status is not there, they can just become "not charitable". Their Assets would have to be transferred to another charity.
I am not disputing that some schools are really stretching the definition of charity. I am pointing out that the reason people are scrabbling for solutions is that the only other alternative is the closure of the schools

pebbles
I'm an accountant who does independent examinations of charity accounts

HMRC has form for adjusting the definitions of activities as being trading or non trading
they could do the same to schools
the assets would still be owned by the charity but the main activities would cease to be covered by the CT exemption

back in the day I went to a 6th form that had to charge VAT because of a rule change

Unlike pebbles, I think, IANAL, but surely it's not that simple. The charity, owning the assets, would have a duty to use them to further the charitable purpose, and that gets us back to square one, deciding what exactly that means. Unlike splitting off trading, where the trading is not what the charity does but makes a profit for the charity, the business of running a school is the charity. (Or not, but there's nothing else that can be the charity!)

Ownership of the assets and tax treatment of the revenue streams are not necessarily the same thing
spent today reading arcane bits of trust deeds on this issue for another sector

I don't think they can redefine "the provision of education" as non-charitable.

That's a key charitable aim that affects every single charity that provides education, nit just schools. It would mean every single charity decoupling it's educational bits and paying for it with non-charitable funds only.

And the schools would still close. If they are not providing the charitable education that is their agreed aim, then they must close and dispose of the assets and donate them to a continuing and active charity.

Crammers are the only Sixth Forms which have to pay VAT, as they are not defined in the same way as schools. You buy only the courses you are interested in.

Actual schools and universities are exempt from VAT. That could of course change with Brexit.

How would Brexit affect the VAT status of schools? .

VAT is an EU directed/regulated tax.

We can change it however we want to once out.

VAT is an EU tax. Countries cannot alter their VAT rules to outside the EU parameters. Once outside the EU lots of sacred cows -like kids clothes -are no longer safe.

PS agree about "education" being to big to hit face on, but ancilliaries and portfolio management are a different game ....

VAT is an EU issue.

So schools and universities (but not crammers) are defined as VAT exempt in terms of the delivery of education. This would take an unimaginable amount of effort to change at EU level.

But with Brexit we wouldn't have to do that, we could set out own rates and definitions.

"PS agree about "education" being to big to hit face on, but ancilliaries and portfolio management are a different game ...."

Ancillaries are already VAT-able, and that's where the charitable exemption kicks in (estimated to be worth about £200 per term per pupil)

meditrina I don't think they can redefine "the provision of education" as non-charitable.

No, I don't think that would be a good idea - as you say, it would cause chaos for everything from museums to literary societies.

The problem from independent schools is the shift from education, any and all education, being perceived as charitable, to education only being perceived as charitable when provided at a cost almost everyone can afford.

Rather than legislate on that, though, which would be difficult because of exactly the "well how affordable and by whom" issues that dog the bursary question, we should legislate to provide a route out of charitable status that doesn't require, as usual, that the assets be passed on to another similar charity.

Although I dare say arguments could be made for something broader, I think the sensible thing would be to limit it explicitly to independent schools - there are few enough of them and they're obvious enough that it would be practical to prevent abuse (wouldn't want it to be too easy for the secretary of the small literary society to pocket the £5k bank balance and then just happen to do nothing with it!)

You could even limit it to a one-time offer: "give up charitable status now, or forever hold your peace"...

Remember this was already done - charity law was changed so that eg an opera house which severs the rich cannot any longer say it is charitable (even though you could argue provision of opera is educational and good). That is why they and the private schools have new legal obligations to do at least something for the poor because the mere education of people is not sufficient. I had to update a section of a legal and accountancy text book when the law changed.

I agree that the definition of charity could be changed yet again although that is very unlikely as we are so soon after the recent changes and there have been cases I reported in the book in the private school sector where courts have looked at the new definition. See in here researchbriefings.parliament.uk/ResearchBriefing/Summary/SN05222 which I think references the fact the Government was forced by the courts to change its guidance as the courts held the state had got it wrong. "The Upper Tribunal’s decision, published in October 2011, concluded that in all cases there must be more than minimal or token benefit for the poor, but that trustees of a charitable independent school should decide what was appropriate in their particular circumstances. Benefits could be provided in a variety of ways. "

I remember studying the topi at university. Cases on contemplative nuns come to mind -they never leave the enclosed order, they don't help the sick and don't teach - they just pray - is that charitable? .. Ah looked it up, Yes the nuns lost and would lose under the 2011 Act too - www.lawandreligionuk.com/2012/07/27/charitable-status-public-benefit-and-closed-congregations/ Presumably the judges know there is no God and praying is useless in terms of benefiting anyone in that case.....

Of course all those rich parents who benefit from the 'tax breaks' of the charitable status could choose to benefit from many thousands of taxpayer money each year instead by putting their children to state schools. In my city the council would have to build and run two to three more secondaries if they all chose to do so. Rich people (or those struggle to afford private school fees) don't make money from paying for private schools! (Disclaimer: my dc school are state educated)

I wonder if the government contribution of £5.5kish per year will also cover the expensive school uniforms and foreign field trips.

And if families benefitting from the scheme dug into their own pocket so that their child could join their classmates on, say, an expensive skiing trip, would they have their Just About Managing status revoked and lose their place?

Questions, questions.

An earlier poster said that in her local state school there is an A level class of 4 - 1 A* and the others B. And it id unfair if that A^ child goes elsewhere because t will affect eh school results
So that poor kids should miss out on the opportunity to work with other A* , thus sacrificing her/his future chances, not to mention his stimulation and enjoyment for the subject, and has to remain with mediocre peers , for the greater good of the state school's results???? Beggars belief that such a ridiculous argument should be aired.

Depends on the kid .... some like to be a big fish in a small pond and thrive on it

Mine never choose to go on expensive school trips at private schools. They could if they wanted to but they don't. Lots of private school children don't. We bought my daughters' school uniforms 100% second hand in the school uniform shops at their private schools.

However yes 500,000 parents saving the stage £5k a year whilst also paying at least £10k - £15k a year per child fees save the state a lot of money and also relieve state schools of the awful burden of tolerating our little darlings. Is it no huge advantage to thrust our children on to state schools. They are just children like all others.

Lower school trip and uniform expenses than friends with children at state schools here, too, again thanks to a good second hand uniform shop that there's no shame in using - the richest parents do, after all! Perhaps there are independent schools with super-expensive compulsory trips, but I couldn't name one.

trips may not be compulsory, but they may be a VERY important part of fitting in
and thus a social hurdle that parents who earn less than the fees CBA with

only the rich cannot see it as an issue

relaxitllbeok Tue 13-Dec-16 19:58:32 thanks to a good second hand uniform shop

It must be good if you are guaranteed to be able to buy everything you need from it. We struck lucky with our DCs second hand state school uniform but then we were 2nd in the queue.