Tristram Hunt’s recent speech turned the spotlight on the benefits independent schools receive as a result of their charitable status. His focus was the business rate relief that all charities enjoy: a mandatory 80% reduction with discretion for the local authority to grant up to 100% relief.

Mr Hunt asserted that independent schools did not do enough to earn that benefit, despite the 2011 Charity Tribunal case that established that providing education, whether privately or state funded, is inherently charitable. Mr Hunt stated that as a result his party, if elected, would pass legislation to make business rates relief for private schools conditional on passing what he calls the “Schools Partnership Standard” – with the commitment of independent schools to this standard being assessed as part of their inspection cycle. He promised that the regulations passed to bring this into effect would be clear about what is required to pass the standard. He gave some examples of what would constitute the “bare minimum”: private schools providing qualified teachers to help deliver specialist teaching knowledge; private schools assisting with expertise to help disadvantaged state school children into top class universities including Oxford, Cambridge and the Russell Group universities; private schools running joint extra-curricular programmes where state schools are an equal partner.

What does all of this mean for academies? After all, they are charities, too – albeit as a result of the Academies Act 2010 and exempt from regulation by the Charity Commission, being regulated instead by the Secretary of State for Education. It is clear that Mr Hunt intends academies to be the beneficiaries, along with all state schools, of his new regulations. He delivered his speech at Walthamstow Academy, citing it as a great example of these policies being put into practice and having an impact. He praised United Learning’s partnership between 38 academies and 13 private schools, and said that he expected private schools to sponsor academies, amongst other things.

Mr Hunt was clear that he was not proposing to get embroiled in the question of whether private schools should have their charitable status removed. Rather he seems to be widening the “public benefit” requirements through a specific piece of legislation which will not involve the Charity Commission in any way.

Independent schools have reacted angrily to Mr Hunt’s proposals. Barnaby Lenon, chairman of the Independent Schools Council, pointed out that independent schools generate £4.7 billion in tax and save the tax payer a further £4 billion by educating children out of the state school sector. Others have pointed out that, for smaller independent schools in particular, loss of this relief could have significant financial implications as they already operate on very tight margins. It may lead to the closure of some schools, the loss of jobs and also increase the burden on the state sector in the area concerned; this is likely to have a greater impact in the south-east. In the past many independent schools have called for the ability to remove themselves from the Charity Commission register without any penalties, tax claw-backs or intervention by the Commission.

Will Mr Hunt’s proposals have the desired effect and remove what he described as the “corrosive divide” in the education system? It has been observed that the best, most meaningful, partnerships between independent and state schools are those which are entered into voluntarily rather than under compulsion. Many academies will rightly argue that the standard of education they provide is at least equal to, if not better than, many independent schools and that they should be viewed very much as their equals rather than in need of their help. This one clearly has some way to run!

 

Gordon Reid is the Head of the Charities team at law firm Barlow Robbins and regularly advises independent schools and academies