If schools know pupils are using drugs at parties completely outside of school, is it their business?

[sartorial]

Obviously all schools have a firm policy against drugs on school premises etc. But if they were told that students were taking drugs at parties in their leisure time, is it any of their business?

Most (if not all) schools know at least some of their pupils can access drugs. Normally the strictest punishments by state schools are not for possession (although it is stricter for possession on school premises) but for dealing. I would mention it without thinking that you are going to get some pupils instantly excluded for drugs.
However it could be very relevant to child protection issues, so should be mentioned.

Isn't use of drugs a police matter rather than a school matter? I would think if the school needed informing then the police could handle that from their inital enquiries.

Just to correct one point...

mnistooaddictive says "legally there is nothing they can do". That is wrong. The Education and Inspections Act 2006 gives the head teacher the specific right to regulate behaviour when the pupils are not on school premises and not under the school's control "to such extent as is reasonable". Whether or not it would be reasonable for the school to take action in these circumstances depends on the details.

Depends on a lot of things. In our school we would consider it a child protection issue and so go down the safeguarding route, that would 'usually' involve contacting parents if there was evidence of drug use, there would be no punishment though, as we don't have the power to sanction for out of school incidents.

inspireddance - You DO have the power to sanction for out of school incidents. Education and Inspections Act 2006 Section 89(5) gives you the power to sanction for out of school incidents "to such extent as is reasonable".

Yes any kid who uses drugs is immediately expelled at my DS's school

Are you sure princess party. In the state sector you only get permanent exclusion for dealing, not using. I know of one top public schools where drug taking is rife and covered up for fear of it hitting the papers and harming their reputation. I taught a boy who was thrown out after repeated warnings that any onebof would gave got him excluded from state school.

that's what their policy says.I don't know if it's been put to the test.