Fee-fixing row: schools adopt tough code

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Two of the country's top independent schools have drawn up a strict new code of conduct to defuse the row over allegations of fee-fixing in the private sector.

Under a draconian code being adopted by St Paul's School and its sister girls' school, both in London, staff have been told they must hang up the telephone if any other school volunteers or seeks any commercial information. Meetings with other independent schools to discuss financial matters are also banned.

The blueprint, the first of its kind to be adopted in the independent sector, is likely to be copied by other private schools as they seek to ward off investigation by the Office of Fair Trading (OFT).

At least four schools, including Eton and Winchester, are at the centre of an investigation after allegations that staff were tipped off by each other about potential price rises. Such action is illegal under new competitive trading laws and could end with schools facing massive fines or sequestration of their assets.

Under the blueprint by the two London schools, which have fees of around £10,000 a year, the code stresses there must be no direct or indirect disclosure of "commercially sensitive information" about the schools to others.

It rules out the passing on of information about proposed fees, historic, current or future teaching costs and swapping information about proposed levels of scholarships or bursaries.

It states: "Commercially sensitive information must not be sought from other schools. If, during the course of a telephone conversation with another school, any commercially sensitive information is volunteered or requested by that school, the conversation must be discontinued immediately. If such information is volunteered or requested by another school in an e-mail or by post, this must be referred to the high master or high mistress.

"The schools must not meet with other independent schools to discuss any commercially sensitive information [unless approved]."

The draconian nature of the new rules reflects the panic that has gripped the independent sector since the prospect of legal action over fee-fixing allegations was first raised earlier this year.

In the past, it has been quite normal for bursars from different schools to chat about financial meetings. But this is ruled illegal by the Competition Act 1998.

In a letter to parents, the governors stress that neither schools have, so far, been approached by the OFT about accusations of fee-fixing. But they added: "We are happy to proceed both by the letter and the spirit of these guidelines, and the governors have decided to volunteer our co-operation with any enquiry.

"It is clearly essential that we have a code of practice in this area. We have taken advice and hope to have taken a lead by establishing a code of practice to ensure we are fully compliant with the competition legislation."

The OFT has refused to comment on any aspects of its investigation until it has been completed.