27 September 2021

Removing charitable status will make private schools more expensive and less accountable


With headlines dominated by ugly battles over internal rules and Angela Rayner’s use of the charming Northern term of affection ‘scum’, Labour is already not having a good conference. But Sir Keir Starmer’s announcement that he would strip public schools of charitable status is perhaps even more dispiriting.

The other stories are, after all, just Labour being Labour. The latter speaks to the judgement and priorities of the leadership, and the man who wants to be the next Prime Minister – and it doesn’t say anything good.

Starmer’s proposals are disappointing on two levels. First, because he’s throwing his party left-wing red meat that suggests he has little of what imagination or boldness New Labour once brought to school policy. Second, because even on his own terms his proposal is a poor one.

Why? Because as even plenty of private schools’ committed critics acknowledge, removing their right to operate as charities is not a ‘magic wand’. Indeed, it could leave the sector even less to Labour’s liking than it is at present.

Charitable status, after all, comes with conditions. Schools that choose it are accountable to the Charities Commission, and must demonstrate that they are operating for ‘public benefit’. In recent years, this has helped to spur such innovations as big-name public schools partnering with local comprehensives, as well as the traditional bursaries and scholarships for less well-off pupils, such as those offered under the London Fee Assistance Consortium.

Assuming that imposing taxes (and thus higher costs on consumers) doesn’t push any parents out of the sector or shutter any schools – as we must if the policy is to raise the £1.7 billion or more Labour say it will – then it will simply push the roughly half of schools currently operating as charities onto the strictly commercial model.

That means even higher costs, even less accessibility, less accountability, and fewer efforts to deliver any of what the left deem ‘public benefit’.

On the other hand, if higher costs did push parents or even institutions out of the sector (which seems far from impossible, given the pressure it has come under during the pandemic), that will create fresh demands on the public purse. According to the Independent Schools Council, the sector educates some 620,000 pupils a year.

If even 10% of these switched to the state sector, that would require an additional 62,000 places at a cost to the taxpayer, if these BBC figures are right, of £384,400,000. Or rather, their parents would spend the money previously spent on fees pushing up house prices near the best state schools, leaving new spaces to be created further down.

Starmer’s attack on public schools is dispiriting also because it suggests he is letting Labour retreat into its comfort zone: bashing popular targets and assuming that ‘more money’ is the solution to every problem. If he wanted to make an education announcement, why not tell us what his government would do to combat grade inflation? But on the most pressing education policy challenge of the day, Labour is silent.

This lack of boldness also gives its opponents even less reason to believe that Labour ministers would put any cash windfall to good use. As Robert Peal chronicled in his book Progressively Worse, extra money is no guarantee of better outcomes when entrusted to ministers in hoc to modish but ineffective theories of education.

Nor is it obvious that giving a big pot to the Secretary of State will deliver better outcomes than all the independent partnerships and initiatives it would replace. Schools are not an area in which public sector gigantism has often been a force for good.

The truth is that if public schools really are so oversubscribed, despite the huge increases in fees in recent decades, that means something is badly wrong in the state sector – and that should be where any government focuses its attention first. It might be that a proper plan to improve those schools could be part-financed by a tax raid on their private-sector counterparts. But the fund-raising plan should follow the school-fixing plan, not the other way round.

None of this even touches on the case that private schools might be valuable in their own terms: that there might be cultural value to ancient institutions, or the multi-generational bonds forged by legacy admissions. Nor the fact that even if state and public schools aren’t on the same playing field, the relative performance of the two still provides a barometer for government policy and prevents ministers from totally marking their own homework.

But even on its own terms, Starmer’s tax raid is bad policy that arises from bad instincts. Almost two years after ousting Jeremy Corbyn more than 11 after losing power, Labour is still looking for scapegoats, not solutions.

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Henry Hill is News Editor at ConservativeHome.

Columns are the author's own opinion and do not necessarily reflect the views of CapX.