While state schools are at breaking point, Bristol’s private schools get millions in tax breaks as ‘charitable institutions’ – do they deserve it?
At Badminton School in Henleaze, sixth-formers are taught in groups of three or four, pupils have the opportunity to start learning Mandarin while still in primary school and many end up – after coaching for interviews – with places at Oxford and Cambridge Universities. Fees at the school are £16,425 per year for day students.
Along with the fees private schools like Badminton are paid, exclusive Cable research can reveal they are also enjoying additional multi-million pound benefits, while the council loses out.
pupils who attend private schools
Yet privately educated individuals make up:
74% of judges
29% of MPs
50% of cabinet ministers
64% of peers
60% of surgeons
34% of University of Bristol undergraduates
Private schools in Bristol received more than £2 million in discounts on business rates in 2017/18 that would otherwise have been paid to Bristol City Council. Business rates – essentially a tax on commercial property – are a key source of revenue for the council to pay for essential public services. Private schools receive an 80% discount on rates because they are classed as charitable institutions. In the same year, state schools across the city paid over £5.4 million in business rates, with 75 of those schools receiving no discount. There are also disparities within the state sector, with academy schools able to claim the discounts which are not available to local authority schools.
Last year we were asked to attend a meeting at my son’s school about budget cuts. I was amazed to learn that our primary school was paying £47,000 a year in business rates. The scrimping and saving we were having to do, compared with the lavish facilities available in different parts of the city, seemed wrong to me. The fact that we had to pay 100% rates was the straw that broke the camel’s back.
The council’s accounts show that seven independent schools in the city have a combined rateable value of £2.7 million, but because these institutions are registered with the Charity Commission, they are entitled to statutory rate relief. This brings their rates bill down to just £537,000 – meaning a huge dent in the council’s revenue.
When faced with the growing hardships of cash-strapped state schools, tax subsidies for private schools are particularly hard to swallow. Wendy Exton, from the teachers’ union NASUWT, told the Cable: “The scale of it is absolutely shocking…this subsidy is not well known within the teaching profession.”
The School Cuts campaign reports that £19.3 million will have been taken from the annual education budget of Bristol state schools between 2015 and 2020, even as the number of young people in the city has grown. This amounts to £453 of cuts for each for the 56,000 pupils in Bristol’s state schools.
“Considering some of the cuts and sacrifices and stresses we’ve had to go through because we were told that there was no money, it’s really galling to learn that these privileged schools are getting this discount,” says Harriet Paige, a teacher from St Agnes.
A Bristol Cable analysis of accounts submitted to the Charity Commission suggests that the discount is just the tip of the iceberg. A whopping two pounds in every seven spent on education in Bristol is going to private schools, based on comparing the total budget for the city’s state schools with the income recorded by private schools in 2017/18. Yet independent schools teach less than 10% of pupils.
In Bristol, nearly £100 million pounds is spent on private education annually. On top of fees, the accounts show that private schools benefit from large and growing investment portfolios, which last year brought in additional income of over £6 million collectively.
So private schools are benefiting from their status as charitable institutions – but how much charity do they actually do?
The question has been asked before. In 2006, the law was reformed so that for the first time independent schools had to demonstrate that they were providing a public benefit in return for their charitable status. Five years later, these independent schools won a judicial review which critics argued weakened the criteria they had to meet to attain charitable status.
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The stakes are high. In addition to the business rate subsidy, at present no VAT is charged on school fees. When this levy was proposed in the 2017 Labour manifesto, it was estimated it could raise enough money to provide a free meal for all primary school students.
So what do Bristol’s private schools do to demonstrate public benefit? According to the Independent Schools Council, the schools they represent nationally provide “over £400 million in means tested bursaries”. However, most bursaries are a discount on fees rather than full relief, suggesting they benefit relatively well-off families. An investigation by the Guardian discovered that fee paying schools in London were offering means-tested bursaries to families with a household income of up to £140,000.
We contacted all the private schools in Bristol, and although many of them provided information about their total number of bursary places, most of them would not say how many fully subsidised places they gave out per year. Redmaids’ School supplies two spaces each year, and Clifton College currently offers 21 free places out of 1,210. All schools consulted said their bursaries were awarded on the basis of performance in entrance exams as well as family income. But as Thea Kelly, a teacher from South Bristol, told us, “giving bursaries to high performers means that they are only helping people who would have done well in state school anyway, rather than helping those who most need it.”
The other ways that private schools say they provide a public benefit is by sharing their facilities with local schools and community groups. Cable research found some of the schools claim they are making their sports facilities available to the community. However some sports teams we contacted said that they were paying commercial rates to the schools.
Five Bristol schools also mentioned taking trainee teachers on placements as part of their submission to the charity commission. Private schools employ one in every seven teachers in the country, but when we contacted sources at UWE and Bristol University, both confirmed that the schools take nothing like that proportion of their trainee teachers. A source at UWE told us that private schools accounted for “about five or six” out of the 126 schools they used for placements. None of the primary school teachers currently on placement in Bristol are at private schools.
Most of the schools also host special lectures, science demonstrations and other events which students from local schools are able to attend. But given the scale of the resources that they can draw on, their charitable activity appears marginal.
Professor Francis Green, co-author of Engines of Privilege: Britain’s Private School Problem told the Cable: “Britain’s private schools provide a good education for their pupils but they are normally very exclusive. They take up three times the amount of educational resources per child compared to what is spent in state schools. In Bristol, the ratio is even higher.
“These resources help to propel private school pupils into scarce places at high-ranked universities, lessening the chances of others. Many other countries have private schools, but generally there is nothing approaching Britain’s enormous wealth chasm between them and state schools.”
Bristol South MP Karin Smyth said, “I have a longstanding opposition to private schools, which benefit just 7% of school aged children. It is these children who tend to go on to the best universities and secure the top jobs.”
Parents wanting the best for their kids is not controversial, and it is not surprising in our highly competitive society that those with the means are willing to pay to secure this. But giving private schools tax breaks seems unfair given the crisis state most schools are in. The question of whether private schools have a place in modern Britain is as crucial as ever.
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