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Brexit - Bonfire of Regulation or Existential Threat to the Sector?

on Monday, 20 June 2016.

On 23 June the country will decide if we will leave or remain a member of the EU.

It is an important and, for many, a divisive issue. If the UK votes to leave the EU, a two year notice period commences under Article 50 of the Treaty on European Union, and no change is expected during that period.  After that, it is unclear what exactly will happen, as it will be largely dependent on the terms of our negotiated exit from the EU.

EU legislation comes to the UK in the form of EU regulations, which automatically take effect, and directives, which are implemented into domestic law by Acts of Parliament and secondary legislation. Secondary legislation is enacted under a range of statutes, including the European Communities Act 1972 (ECA).

Unless salvaged in the terms of exit (or otherwise by further enactment of Parliament), EU regulations and secondary legislation made under the ECA will fall away after two years. Otherwise current legislation will stand (whether or not introduced in order to incorporate EU directives). They could however be targeted for repeal later.

The compliance framework for independent schools is not driven by the EU and will not be immediately impacted by Brexit. In particular, the legislative framework for independent schools is set out in a range of primary legislation, including:

  • the Children Acts 1989 and 2004
  • the Education Acts 2002 and 2011
  • the Childcare Act 2006
  • the Education and Skills Act 2008

Given their statutory status, Brexit will not lead to their automatic repeal.

The detail of the compliance requirements and inspection frameworks are contained in secondary legislation and guidance, specifically in:

  • the Education (Independent Schools Standards) Regulations 2014
  • the Boarding Schools National Minimum Standards 2015
  • the Residential Special Schools National Minimum Standards 2015
  • the Early Years Foundation Stage Statutory Framework

All derive their authority from the core statutes referred to above (rather than the ECA) and will also be protected on a Brexit.

Going forwards, government policy will remain the primary driver of regulatory reform in this area. It is in our view unlikely that any programme of post-Brexit deregulation will target fundamental safeguards around school standards and pupil welfare, as this is not currently on the political agenda and would be unlikely to find favour with voters, unless this is specifically recommended by the Goddard Inquiry.

Independent schools are also subject to trading laws (such as health and safety and environmental safeguards) and consumer protection, both commonly cited as examples of burdensome EU red tape.

For example, much of our health and safety law derives from the Health and Safety at Work etc Act 1974 and from secondary measures which - whilst addressing areas of EU regulation - are made under that act, rather than the ECA.

Similarly, the Consumer Rights Act 2015, which governs parental rights and remedies and the Financial Services and Markets Act 2000, which regulates consumer credit arrangements, are both home grown primary legislation and will not be automatically affected by Brexit.

This express primary legislation will survive Brexit, but could be reformed afterwards. There may be a greater democratic mandate for reform in these areas, but this is likely to be balanced against the wish to facilitate trade and to protect workers and consumer rights.

Could Brexit have the unintended consequence of removing legal support for the independent sector?

Possibly the more interesting question is whether Brexit might have the effect of removing legal obstacles to the dismantling or weakening of the independent sector. Independent schools are not creatures of EU law, of course, but certain principles of EU law have been relied upon in support of the continued existence of the sector.

In a little-known opinion commissioned in 1987 by the predecessor body to the Independent Schools Council (the unfortunately-acronymed Independent Schools Information Service), two eminent jurists, Anthony Lester QC and David Pannick, were asked whether it would be unlawful for a future UK government to prohibit fee-paying independent education, remove the benefits of charitable status or impose VAT on the provision of educational services.

Their joint opinion was that each of these outcomes would have to be considered against the provisions of the European Convention of Human Rights and other provisions of EC (now EU) law with direct effect in the UK - with the likely result that each would, or probably would, be in breach of the Convention and other directly-effective provisions.

The opinion was commissioned against the backdrop of a 1981 TUC/Labour Party publication, A Plan for Private Schools, and a subsequent resolution at the 1986 Labour Party Conference advocating that independent schools be taken into public ownership.

It was updated in 1991 following further concerns about a Labour government seeking to redefine the law of charity so as to exclude fee-charging schools and requiring existing schools to alter their purposes by removing their ability to charge fees. Again, Lester and Pannick concluded that the European Convention on Human Rights would place obstacles in the way of such action.

Clearly, such considerations are far from central to the wider questions about the UK's membership of the EU. But it is interesting to consider the possible unintended consequences for the sector of the vote on 23 June.

For more information, please contact James Garside in our Independent Schools team on 0117 314 5639.

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