Cripes! Public schools get charity caning

Like the resident classroom troublemaker, the private school sector got a right telling-off this morning from the head of the Charity Commission.

by Emma De Vita
Last Updated: 31 Aug 2010

The likes of high-status schools such as Eton and St Paul's have been told to prove their ‘public benefit' activities or risk the loss of their valuable charitable status, which includes exemption from income tax, stamp duty and VAT concessions.

It's a contentious issue. Some argue that just by removing their children from the state education system, they help alleviate the public sector burden. Those on the other side of the fence say it's unfair that the educators of the rich should enjoy the tax breaks and other financial benefits that charitable status confers.

The independent schools sector is an anomalous one. Some private schools are run as charities, with surplus income ploughed back into school resources. Others are run like businesses, making profits for shareholders. With the average annual British school fee hovering around the £8,500 mark, having increased by three-times the rate of inflation over the past two decades, there is certainly a lot of money swishing around. And demand is only getting stronger despite new Labour's efforts to improve education, education education. It must be one of the only sectors around that defies conventional economics by expanding its market share at the same time as raising its prices.

The central challenge for the sector then, is one of identity. Is it a charity or is it a business? One thing is for sure, like Billy Bunter, it can't have its cake and eat it.

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