Schools that Work for Everyone - strategic threat or opportunity?

The focus for the independent sector will inevitably be the proposals targeting schools with charitable status, although of course the impact of the changes to secondary schooling will be felt across all independent schools.

The Proposals

Independent schools 'with the capacity and capability' should meet one of two expectations in recognition of the benefits of their charitable status:

• to sponsor academies or set up a new free school in the state sector. The capital and revenue costs would be met by the government, but the independent school would have responsibility for ensuring its success, with the expectation that the sponsored school would be good or outstanding within a certain number of years.
   
• to offer a certain proportion of places as fully funded bursaries to those who are insufficiently wealthy to pay fees, with the expectation that this proportion is considerably higher than that offered currently at most independent schools.

For the large number of smaller independent schools that do not have the capacity and capability to take on full sponsorship, the expectations will be centred on those schools fulfilling one or more of the following:

• providing direct school-to-school support to state schools.
• supporting teaching in minority subjects which state schools struggle to make viable.
• ensuring senior leaders become directors of multi-academy trusts.
• providing greater expertise and access to facilities.
• providing sixth-form scholarships to a proportion of pupils in each year 11 at a local school, assisting with their teaching or helping them with university applications.

New benchmarks are proposed for independent schools, in line with their size and capacity, with the threat of future legislation to remove 'the benefits associated with charitable status' for schools which do not comply. In Parliament, the Secretary of State also referred to 'a more stretching, tougher bar for independent schools to demonstrate that they are, indeed, eligible for charitable status. If they are unable or unwilling to meet those tougher standards, they simply will not be able to get charitable status'.

What next?

The proposals are set out in a consultation which is open until 12 December 2016. The Independent Schools Council is expected to take the lead in responding at a sector level and schools and associations are likely to respond in large numbers also. Areas for analysis are likely to centre on the following:

• How realistic is it to expect independent schools, the vast majority of which are dependent upon fee income rather than endowments or reserves, to take on substantial commitments for new or failing schools?
   
• Likewise, how can schools substantially increase free places without increasing fees or impacting the quality and breadth of their educational offer that the government applauds?
   
• How vulnerable are schools to the imposition of legal change? Charitable status itself does not seem to be under threat (although note the Secretary of State's comments in Parliament) as the consultation focuses on 'the benefits associated with charitable status'. How would the government go about discriminating between charities which remain eligible for fiscal benefits and those which are excluded? Would other types of charity be caught in the cross-fire? More broadly, are there other areas where independent schools could face differential treatment based on their compliance with these new benchmarks (eg. continued inclusion within TPS)?
   
• Might any legal avenues exist to challenge these proposals? And might this push some schools into a serious examination of structures for operating outside charitable status - or, even, as a state funded school?

Whilst the outcome of the consultation on education reform cannot be known now, changes to both the expectations as to how independent schools need to demonstrate public benefit and to the expansion of grammar schools will impact on the current modus operandi of many schools and we recommend early consideration of the strategic threats and opportunities that change may bring.

For a confidential discussion about how the proposals might affect your school, please contact our Independent Schools specialists Barney Northover, Con Alexander or Matthew Burgess.