Public schools from private purses

Labour's plans might strengthen the independents, argues John Rae
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Just when Britain's public schools - or independent schools, as they now prefer to be called - thought it was safe to contemplate a Labour government, David Blunkett, the party's spokesman on education, has provoked a new debate about what Labour'

s intentions really are.

Neither the schools nor their middle-class clientele will have been wholly reassured by Tony Blair's intervention ruling out VAT on school fees. The fact that Labour thought of it at all must have come as a shock to those who thought that the party's hostility to independent schools was a thing of the past.

Labour is no longer committed to the abolition of the independent sector. That was never a realistic option, though it was taken seriously by both the party and the schools a quarter of a century ago. The modern Labour Party accepts that independent schools have a right to exist; what it does not accept is that schools which assert and glory in their independence should be supported by public funds.

Hence all the policies considered in the current debate are designed to remove what are seen as public subsidies to private institutions. The "politics of envy" may still be alive on the left, but for Mr Blair and his shadow cabinet it is more a questionof spending priorities in a climate of scarce resources.

The three policies that have been under consideration are VAT on school fees (now apparently ruled out); removal of charitable status (not ruled out) and the phasing out of the assisted places scheme (definitely ruled in). Independent schools vigorously oppose these policies, but I am not convinced that all of them are wrong or that their implementation would necessarily weaken the independent sector.

If a Labour chancellor were to impose VAT at 17.5 per cent, annual fees at the more expensive boarding schools would jump by more than £2,000, and at the more expensive day schools by £1,500. At the cheaper end of the market, where parents are arguably less able to bear any increase, the rise in boarding and day fees could have a crippling impact on recruitment.

The impact of the loss of charitable status would be less serious. At the moment the fiscal benefit to the independent sector is worth about £42m: £20m coming from 80 per cent relief on the business rate, £19m from tax relief on bank deposits and investment income, and £3m from tax relief on covenanted appeal donations. If charitable status goes, each individual school will have to find £40,000 to £250,000 a year extra from fees.

For most schools that is unlikely to mean an increase of more than 5 per cent. While not welcome to the schools, the loss of charitable status would be much less of a threat than VAT on fees.

The phasing out of assisted places would not affect some of the best-known independent schools, because they have little or no commitment to the scheme. But some independent day schools are heavily committed: up to 50 per cent of their intake. Of these,

the schools that would be hardest hit would be Roman Catholic day schools on Merseyside and independent grammar schools such as Wisbech Grammar School in Cambridgeshire. Other schools with a heavy commitment to the scheme include King Edward's, Birmingh

a m, which must be on everyone's list of the top 10 independent schools, and Dulwich, which is not the academic powerhouse it once was, but still has a considerable reputation in south London. The effect would not be to put these schools out of business,b ut to change radically the nature of their intake.

On the face of it all these policies would damage the inde- pendent sector, and it is not surprising that the schools condemn them as "vindictive". VAT on fees is the hardest policy to justify and Mr Blair is right to rule it out. No one told Mr Blunkett, but it is almost certainly ruled out anyway by European legislation which identifies education and private tuition as items that should be exempt from VAT. Even Euro-sceptics should find that piece of European law acceptable.

The case for removing charitable status is a better one. Independent schools provide a service in return for a fee. In some cases the scholarships and bursaries they give are more generous than the fiscal benefits they receive. But they are not charitiesin the true sense of the word and it is difficult to see why the taxpayer should contribute to the reduction of fees at a private institution.

It has always been argued that it is too difficult to disentangle independent education from the complexities of charitable law, but Labour's embarrassment over VAT on fees is likely to make the party much more determined to succeed this time.

As far as the assisted places scheme is concerned, I declare an interest. I opposed the scheme when it was introduced and I am still not persuaded that the £94m of taxpayers' money currently spent on it can be justified. It might be if the scheme was designed to use the independent sector to complement the state sector. But it isn't. Pupils move at random, with no regard to what is available to them in state schools. Given that many state schools are as good as or better than independent schools, this is a very odd way of using taxpayers' money. The argument about parental choice is a red herring.

The only way to give the scheme credibility would be to buy places at independent schools where expertise in a particular discipline, such as classics or music, is available, but not on offer in local state schools. The present rationale for the scheme, however, appears to be that the state sector is so awful that the rescue of any pupil is better than none. The sooner it is phased out the better.

An incoming Labour government is likely to do just that, and to remove charitable status. Far from being a disaster for the independent sector, the impact of these policies could be salutary. The academic league tables have revealed just how long a tail of weak or downright bad schools there is in the independent sector.

Though some of the schools low down the table have admirable qualities - such as the ability to bring out the best in less academic pupils - which will always attract parents, others are conning their customers with the paraphernalia of the public school, disguising weak teachers, bad house staff and glibly shallow heads.

There have always been bad independent schools. Mr Levy in Evelyn Waugh's Decline and Fall placed schools in four grades: Leading School, First Rate School, Good School and School. "Frankly," said Mr Levy, "School is pretty bad."

One of the benefits of Labour's policies would be to get rid of the "pretty bad" schools. Even the most gullible parents will jib at paying higher fees for a poor service. The independent sector would be stronger and less reliant on the reputation of a few high-flying academic schools. Whether this is what Labour wants to achieve is a different question.

The writer is a former headmaster of Westminster School.