Experimental feature

Listen to this article

Experimental feature

Should private schools be run for a profit, in sharp contrast to the traditional approach where they have charitable status? Chris Woodhead (above left), chairman of the Cognita group of schools, and Jonathan Shephard (above right), general secretary of the Independent Schools Council, answer your questions.

What is your vision for the future of private education in Britain?
Richard Batey, Notts, UK

Chris Woodhead: All schools should become private. The lesson of the last ten years is that state control does not work. Free schools and give parents a voucher that equates to the average per pupil state expenditure to help them pay the fees.

Jonathan Shephard: We need to look at the education needs for the whole of the UK over the next 20 years and see how the independent sector can help. The current state of affairs is deeply worrying, because there are not enough qualified maths and science teachers to go round. State school pupils are more likely than not to be taught physics by someone without a physics degree.

Independent schools find it easier to attract qualified maths and science teachers. We need to use technology – and imagination – to make the classroom walls dissolve so that expert teaching from both sectors can be supplied remotely to schools and children where expertise is missing. Remote teaching through Learning Management Systems is expanding rapidly: reinforcing remote teaching by face to face tuition at weekends or at summer schools is the ideal.

Separately, we need to exploit the ability of the independent sector to give life-changing opportunities to children from disadvantaged backgrounds. If we look at the United States, it is the Black and Hispanic communities which are keenest on using the independent sector through state funding schemes, because they can see the real benefits in social mobility. It makes sense to use the independent sector – with its proven excellence in teaching – to help as many children as possible develop their full potential.

It is obvious that state schools will become independent and you will have a proliferation of providers, independent state schools, independent schools which are commercial and independent schools which are charities. That is inevitable and it is a good thing, because it recognises that the day of the state as a monopoly or efficient provider are over.

Wellington, as one of the country’s great historic schools will continue to have charitable status. It was set up as a national memorial to the Duke of Wellington - our greatest general and worst Prime Minister - with the purpose of providing education for the sons of people who were killed serving their country.

My intention and that of the governors is that we will continue to expand our charitable work in two ways - by offering more bursaries and widening access to a greater range of social groups and also in more activities in partnership with the state sector, such as sponsoring an academy.

Chris Woodhead launched into me at a conference last year saying that there was no point in these partnerships, that they were none of our business and not what our parents wanted. I would dispute of all that. I would also dispute the fiction that independent schools are only entering into partnerships for fear of the Charity Commissioners. We are keen to do this because it is the right thing for our school and those we are working with.

Which model of education do you think will triumph?
Dr Anthony Seldon, Master of Wellington College

Chris Woodhead: Your intention, Anthony, is to publicise Wellington, and good luck to you. As parental confidence in state schools collapses, the private sector will expand. Within the private sector we will see a huge increase in schools run by for profit companies. The charitable sector has neither the energy nor the funds to compete. Some may lament this. In that I want parents to be able to send their children to schools which provide the best possible education at the lowest possible price, I do not. Long live the market.

Jonathan Shephard: I would rather not think about either triumph or disaster. I would rather instead take the approach that educational provision should be about delivering the greatest possible benefit to the greatest number of children. Partnerships between the maintained and independent sectors can benefit both sectors: the long experience of partnerships indicates that both sectors perceive benefits - whether academic or social or entrepreneurial.

Chris Woodhead is fostering a divide which is unnecessary and which is not perceived by the majority of independent school Heads. I don’t think that his isolationist approach will cut the mustard with parents, and it will certainly not be attractive to the many thousands of independent school teachers who enter the profession with a social purpose.

You have to remember that the schools within the independent sector are highly variable and a model that makes sense for one school will not necessarily make sense for another. Debates tend to implicitly assume a single model based around the traditional public school, but it is a bit more complicated than that.

Charitable status is not the only reason for partnership activities. A number of schools have had building developments in recent years and planning agreements may require community use of facilities. For schools like our own, formerly a direct grant grammar school and with a local intake, involvement with our community means continuing to do the things we always have done. A boarding school in a rural area with an international intake will have different priorities and possibilities.

I do not think that any of our public benefit activities have a serious impact on fee levels. Again, these are things that the school always did before public benefit was defined more closely. We always did provide bursaries to offer opportunities to people who would otherwise not be able to come here. Similarly with opening up facilities at low or no cost where it does not impact on the running of the school makes sense - we want local people and their children to think of this as somewhere they can aspire to, not somewhere remote and untouchable. There’s no better way of doing that than allowing your facilities to be used.

Do you believe that your generic arguments apply equally and specifically to all independent schools?
Dr Mark Bailey, headmaster of Leeds Grammar School

Chris Woodhead: Yes, though I agree that local circumstance may make pragmatic concessions to bureaucratic demand inevitable.

Jonathan Shephard: Mark Bailey is entirely right to point out that independent schools cover a vast range. Individual charitable schools will find their own ways of delivering public benefit, which may be academic help or may be in other ways. My comments on help from the independent sector in maths and science were intended to apply to the sector generally, and not to every specific independent school.

Mr Woodhead, the purpose of charitable status is to exempt from taxation those activities in our society that have aims with an intrinsic social or other value outside the commercial arena. If you exclude private education from that category, you will have to exclude all educational charities from the exemption and tax them as a (rather large) group - or is it your intent to be selective, only against Cognita’s competitors?
Piers Gibson, Sussex, UK

Chris Woodhead: Eton, Harrow and Winchester are businesses which charge very high fees for an excellent product. Education as an activity is a social good, but such schools are not charities. Genuine educational charities would remain exempt. I welcome competition!

A question for Jonathan Shephard - I think you are missing the point about profit, which is that it is the price of efficiency. It isn’t a kind of tax which is “levied” by investors; it is the means by which companies keep costs low and, crucially, innovate so that they do better than thecompetition. This argument applies to the state sector too, which has shown extremely poor returns on taxpayer spending in recent years.
Andrew Haldenby, Director of the think tank Reform, UK

Jonathan Shephard: It’s an interesting argument. I entirely agree that innovation can keep costs down. In manufacturing that is often through improving processes by well-planned capital expenditure; in the information industries it can be through re-purposing data. In a school context, where face to face teaching is vital, the intractable cost tends to be staff, and staffing levels in the classroom will not be made better by a commercial investor.

There are possibilities for improving productivity through use of technology, but there is no hint that commercial educational providers are ahead of charitable educational providers in this respect. And it is worth pointing out that profit has to be paid by the purchasers of the goods or services: in literal terms it puts prices up.

I understand the need for more affordable private education but how can fees at for-profit private schools remain so low when, as Mr Shephard points out, “Cognita schools bear the same costs as charitable schools, plus the cost of paying their shareholders”? Won’t the result be bargain-basement private schools? And is there really a market for private schools that cut corners in order to meet shareholder demands?
Lucy Greggs, Surrey, UK

Chris Woodhead: No, as I said in the exchange, I don’t think private schools can or should cut corners. But neither should we assume that every private school needs to charge fees of 20k or more. I want a more developed education market where parents have an opportunity to pay the fees they can afford. We need more mid market schools.

Jonathan Shephard: Independent schools are very tightly run these days, because no school wants to price itself out of the market. The huge majority of costs are staff costs, which rise in line with costs in the state sector. Cut price schools mean, almost inevitably, cutting back on staff – for example through larger class sizes. If shareholders demand a high return on their investment, this has to come from somewhere.

Why should private companies make a profit from educating children? Should schools really be run as businesses? Don’t they have a social responsibility?
Neil Gardner, London, UK

Chris Woodhead: Schools are multi-million pound businesses. I see no conflict between running the business efficiently and delivering the highest possible education standards. Indeed, the latter are crucial to the success of the business. If by “social responsibility” you mean that private schools should spend parents’ fees on ill thought through schemes to prop up failing state schools, then, no, I am not interested.

Jonathan Shephard: The social purpose of charitable schools is central to their ethos, including care for the local and wider community, co-operation with the state sector, and support for children whose parents can’t afford the fees.

We shouldn’t forget, either, the schools founded by a family or individual which may well become charitable when the founder retires, and which meanwhile adopt elements of the charitable ethos. Cognita is flying a completely different flag: no engagement with the state sector, total concentration on parents as customers, and investors who want a commercial return. It’s a new element in the education sector, and tries to square too many circles to be entirely convincing.

What would happen to the children at a profit-making private school if the business behind it were to fold? How could there be any guarantee that their education would still be provided in such a scenario?
Peter Morris, Cambridge, U

Chris Woodhead: There can be no guarantees, but neither can there be in charitable schools which choose to shut (as several have recently) with virtually no notice to their parents.

Jonathan Shephard: Schools of all types – including state sector schools – will merge or close now and then, and this is always regrettable because of the disruption to children’s education. In the rare cases where a charitable school closes, the assets (land and buildings) remain charitable, and must be used for charitable purposes. If they are sold, the proceeds of sale remain charitable. The difference with schools owned by a commercial company is that, subject to planning constraints and any covenants, the land and building can be treated as assets with an investment potential.

Is it the independence of their respective schools which is crucial, or does it depend more on other factors such as history, reputation, the children who go to them.
David Moore, London

Jonathan Shephard: Virtually anyone in the independent sector (and many in the state sector) would say that independence is the key. Both sectors are highly regulated, but the independent sector is able to be much freer in its approach to the curriculum and in the way the school is administered. In almost any environment people value a degree of autonomy, and there is more of that in the independent sector.

Given the investment and improvement in the state sector, how do Chris and Jonathan see the future? Schools in Jonathan’s bailiwick are becoming increasingly reliant on overseas students and the boys’ schools are having to throw their doors open to girls. What leads Chris to suppose that he can break into a market where there may be already too many players?
Jim Holland, Bristol, UK

Chris Woodhead: There has been huge investment in the state sector. That investment has not lead to a significant impact on educational standards.Twenty per cent of 11 year olds, for example, leave primary school unable to read well enough to deal with the demands of secondary school curriculum.

More and more parents wonder why they are paying higher taxes and are looking, albeit reluctantly, to the independent sector.

Jonathan Shephard: I think the demand for independent education will continue. As noted in another response, numbers have increased in 18 of the last 20 years - and, as you note, there has been heavy investment in state education since 1997. Overseas students are important in some schools, but the overall numbers are small: 9,700 new pupils last year from overseas resident families, excluding armed forces. That figure was an increase, but the previous year showed a fall, so it’s a mixed picture.

The historical under-provision of places for girls has now been corrected, and boys and girls now attend in approximately equal numbers - so there is no “undiscovered” market. New providers will always have a place, but you are correct in implying that there are enough suppliers to meet current demand.

You both seem interested in opening up the sector wider than the 7 per cent it currently educates. Does that mean you would like your schools to abandon selecting pupils on ability or so called aptitude? Or are you only interested in those able to pass your entry tests?
Margaret Tulloch, Comprehensive Future, PO Box 44327, London

Chris Woodhead: Cognita is interested in educating children of a wide range of ability. Some of our schools are more academic than others. This is true of the independent sector as a whole and is one of its strengths.

Jonathan Shephard: Many people believe, wrongly, that the independent sector is only for academic children. The range is enormous, from highly academic schools to non-academic, and includes schools which are solely for children with special educational needs. The key factor is the quality of teaching, and the ability to relate teaching to the needs of the individual child. All levels of ability are welcomed within the sector.

Open access effectively turns independent schools into grammar schools. Wouldn’t it be better to forget about fees entirely and concentrate on incorporating the independent schools into the national system as high quality open academic schools?

Chris Woodhead: It would be better to maintain the identity of independent schools and establish a network of grammar schools across the country. The more diversity and the greater parental choice the better.

Jonathan Shephard: There is a crucial difference between open access (= needs-blind admission to independent schools) and “incorporating the independent schools into the national system”. Open access retains independence in curriculum and teaching methods and admissions. Incorporation would put a currently thriving independent sector within a much more variably performing state sector, and that might do no-one much good.

It would be enormously beneficial if parents could choose whichever school best suited their child regardless of fees: children are diverse, and the independent sector delivers diverse provision from highly academic to not academic at all. That diversity is valuable, and it would be great if public funding could be available for a diversity of schools.

What is the evidence that parents are price conscious in choosing an independent school?
Sarah Swift, Manchester

Jonathan Shephard: There is not much in the way of hard evidence. Parents who can afford fees, even with some difficulty, are not likely to make the final choice on price alone: they will choose the school which best suits their child. It does, though, stand to reason that parents struggling to afford fees - and there are thousands of them - will find that, at a certain point, the struggle becomes too great. There is therefore a strong motivation for schools to keep their fees affordable to as many people as possible.

Mr Shephard appears to believe that when schools make a profit they are exploiting their consumers and running their operation less efficiently than non-profit making schools. Does he also think that when Tesco and Sainsbury - or indeed any other business - makes a profit, they too are exploiting their consumers? Does he think that the co-op is the only grocer which does not exploit its customers?
Stephen Pollard

Jonathan Shephard: I have certainly not said that for-profit schools are less efficient. But nor is there any evidence that they are more efficient. The intractable cost is staff, and therefore the ability to increase margins will be limited, unless staffing ratios fall or staff conditions are worse. There are possibilities for increasing productivity (through technology) but again there is no evidence that the for-profit element of the sector is ahead of the charitable element.

Profit has to come from somewhere, and if efficiency is similar between for-profit and charitable schools, the likelihood is that for-profit schools will charge more for the same level of provision.


Companies running private schools for a profit are trying to shake up a market that has traditionally been dominated by schools run as charities. Feelings run high in the sector on this issue, as our e-mail exchange between Chris Woodhead and Jonathan Shephard shows.

Should private schools be run for a profit, in sharp contrast to the traditional approach where they have charitable status? Groups such as Cognita are trying to shake up the market by offering education for fees significantly less than those charged by the traditional public schools, as represented by the ISC. But the latter claim that this approach ignores the children whose parents cannot afford fees at all, and who might benefit from the traditional schools’ strong sense of social purpose.

Debate - Profit, pupils and progress

FT ranking - Top 500 independent schools (pdf)

FT report - Independent schools

Copyright The Financial Times Limited 2018. All rights reserved.

Comments have not been enabled for this article.