The head of the organisation that represents the country's top independent schools today issued a threat to the government's charities watchdog that it may consider legal action against moves to force private schools to open up their facilities to pupils from low-income homes.
David Lyscom, chief executive of the Independent Schools Council (ISC), told the Guardian there was potential for a legal challenge against the Charity Commission's interpretation of new laws to make every charity - including most private schools - pass a new "public benefit test" to qualify for charitable status and tax breaks worth millions of pounds every year. Lyscom said the 2006 Charities Act was not at fault, but that the commission had wrongly interpreted it. "There is the potential to test this in the courts. That's a major and expensive step to take. So at the moment we're not saying we'll definitely do it, but it is an option we may have to consider," he said. Private schools were already providing a public benefit by educating children who would otherwise be in state schools paid for by taxpayers, he said.
The commission has said that to qualify, schools must not bar pupils who cannot afford their fees. The most direct way to do this is to give more bursaries, it says. Without private schools "the public would have to pay between £3bn and £4bn a year in extra taxes," Lyscom said. "The commission asks what these schools are doing for the poor. The answer is the poor are not paying as much tax as they otherwise would." He went on: "The independent sector now provides almost half of all special educational needs. It is keeping alive high quality in subject areas that are absolutely vital for the UK over the next 50 years. Modern languages, individual sciences, economics, advanced maths: we're get- ting between 40 and 50% of the A grades at A-level. These are the future leaders, movers and shakers who will give the UK economic success in the future."
Matthew Burgess, Lyscom's deputy at the ISC and a former solicitor, said they had looked at a number of options including tribunals over individual schools' cases or a high court challenge to the guidance published by the commission. "Legal action is certainly something we have to consider," he said. Their course of action would depend on the outcome of the cases of two private schools that were told by the commission last month they had failed the test, he said. St Anselm's preparatory school in Bakewell, Derbyshire, and Highfield Priory in Preston, Lancashire, were criticised for failing to provide enough bursaries, and told to revise their plans within three months or face losing charitable status. The schools have complained the guidance is not specific enough in dictating how many bursaries they have to give to meet the test, but the commission insists it does not want to be overly prescriptive.
Andrew Hind, chief executive of the Charity Commission, said the majority of private charities that had been assessed had met the test and private schools were already taking steps to show the public what wider benefit they bring. "We have always said that we would work with any of the charities that are not currently meeting the requirement and that charities are being looked at on a case-by-case basis. David Lyscom himself said last month in a radio interview that he 'would like to see a Charity Commission approach that is based on the individual capabilities of the school, and not on some sort of formula for means-tested bursaries to apply across the board'. That is exactly what we are doing."
When fee-charging schools (or, as they prefer to call themselves, independent schools) first faced justifying their charitable status, they opted for all-out attack. That, at any rate, is what it looked like when they appointed Rear Admiral Chris Parry as chief executive of the Independent Schools Council, their umbrella body.
Parry, who disabled an Argentine submarine during the Falklands war and once compared migrants to Goths and Vandals, was never likely to observe the polite conventions that normally govern what independent school folk say about their state sector cousins. State schools, he told the Guardian, had "ignorant" parents and "too many leaders but not enough leadership". He told the education select committee he found the quality of state schools near his Portsmouth home "offensive". The rear admiral lasted seven weeks, during which he set back the fee-paying schools'attempts to present a more caring and less elitist image by several decades.
Having found that "war-war" was a mistake, the schools turned to "jaw-jaw". Parry's successor, who completes a year in office next month, is a former Foreign Office diplomat, and a smoother, more fluent operator you couldn't imagine. David Lyscom was our man in Bratislava and later at the Organisation for Economic Co-operation and Development (OECD) in Paris. He sporadically tries to match his predecessor's somewhat colourful background, if not his reckless way with words, but the best he can manage is that he was once "outed" on a leftwing website as a spy because his first posting was in Vienna where, in cold war days, everybody was supposed to be a spy. "I wasn't a spy," he adds carefully.
We meet just after the Charity Commission has published its first five test cases of fee-charging schools' fitness for charitable status. Three schools (including Manchester Grammar) passed, two failed, mainly, it seems, because they devoted less than 1% of income to bursaries for children whose parents can't afford full fees. The commission didn't agree that allowing the British Legion to hold concerts in the sports hall turned schools into charities, since these had nothing to do with children. It did take into account the use of premises for parent and toddler groups or children's holiday clubs, but still demanded substantial access for poor families to the schools' mainstream teacliing.
This is the most serious challenge to the future of the fee-charging sector for at least three decades, and it comes when some schools are already struggling with the effects of the credit crunch on parents' pockets. The problem is not, as commonly thought, that schools might lose tax benefits. These, it is estimated, save only £100m a year, less than 2.5% of turnover.
The much bigger problem is that the schools can't stop being charities even if they wish to. Unless they do the commission's bidding, they risk losing control of their land and buildings. Unfortunately, as Lyscom points out, this probably won't happen to schools such as Eton, Harrow and Westminster. They can easily afford to finance bursaries, from high fees, lavish endowments, fundraising from well-heeled alumni. The schools that face a crisis are those that charge relatively modest fees, recruit from more middling social backgrounds and, in many cases, aren't academically selective.
Independent school headteachers - not an easy bunch to please - are generally delighted with the way Lyscom is highlighting this point. "The independent sector," says Martin Stephen, the head of St Paul's, "attracts an awfully wide range of support. Some supporters are, frankly, lunatics with extreme rightwing opinions. Our problem is how to justify ourselves without lining up with such people. Lyscom has handled that very well. He has put forward an extremely dignified stance. He has just let loose a gentle barrage of facts. He hasn't been strident."
Which is not to say he hasn't been uncompromising. On one point, I found Lyscom quite firm. The law, in the form of the 2006 Charities Act, was not at fault. Before that, anything educational was automatically judged charitable; now, there must be proof of public benefit. Lyscom thinks that is reasonable. The fault lies with the commission and its interpretation of the act. "There is the potential to test this in the courts. That's a major and expensive step to take, but it is an option we may have to consider." Lyscom's central argument (which the Charity Commission's guidance rejects) is that, by educating children who would otherwise be schooled at taxpayers' expense, fee-charging schools are delivering adequate public benefit. "The public would have to pay between £3bn and £4bn a year in extra taxes. The commission asks what these schools are doing for the poor. The answer is the poor are not paying as much tax as they otherwise would. Therefore, they are less poor than they would be if our schools didn't exist."
Lyscom claims other public benefits. "The independent sector provides almost half of all special educational needs. It is keeping alive high quality in subject areas that are absolutely vital for the UK over the next 50 years. Modern languages, individual sciences, economics, advanced maths: we're getting between 40% and 50% of the A grades at A-level. These are the future leaders, movers and shakers who will give the UK economic success in the future."
You might argue this is precisely the problem: the fee-charging schools ensure future leaders are drawn from a narrow and privileged social stratum. I put this and many other points to Lyscom, who in response deploys the earnest charm of a trade attaché persuading a Slovakian importer to buy British.
Lyscom emphasises his working-class origins in Hull: his father left school at 14 and, failing to get into his local police force at 21, cycled to London to join the Met. He rose to chief superintendent. His mother cooked in the police canteen. He lived in police accommodation and went to state primary schools until he won a scholarship to Latymer Upper, a direct-grant grammar in west London. He went on to Cambridge to read economics. He didn't get involved in sit-ins but he was "socially motivated", he says, and joined the diplomatic service "because I wanted to serve society". When I suggest this seems a conventional establishment choice, he replies that, as an economist, he could have gone into banking or industry.
He specialised in economic development and, later, climate change and energy. He served in Vienna, Ottawa, Bonn and Riyadh, as well as Bratislava and Paris. He also had spells in London and was for a time in charge of the Foreign and Commonwealth Office environment department, which gave him a big role in negotiations for the Kyoto climate change treaty. While abroad, his three children initially attended local expatriate schools. Later, they went to Marlborough College (current boarding fees: £27,690 a year) and, Lyscom is anxious to tell me, the FCO (ie, the taxpayer) paid only the average costs of a boarding school, so he had to pay the difference "and we didn't have any proper holidays for 10 years".
I suggest that, even if we accept that fee-charging schools offer the public benefits he claims, they are not what most people mean by charity. I quote the Oxford English Dictionary definition: "a trust, foundation, organisation, etc, for the benefit of others, especially those in need or distress". Lyscom retorts: "if you read the law, there are 11 or 12 charitable purposes, and only a couple of them are to do with poverty. The Royal Horticultural Society is a charity. Maybe there are poor plants out there. You can quote the OED at me, but that is not what the law is about."
He continues: "Charity is just an accident of history and the law. Really, these schools exist because they believe in independence for education. Parents deserve a choice, the option of something better or different from what the state sector provides. Take the national curriculum. Our heads say it's much easier to tailor education to individual children if you don't have a national curriculum." So he wouldn't have a national curriculum for state schools? "That's not for me to say." But, I reply, he is a taxpayer and entitled to say. After a long silence, the diplomat says: "You have to set standards, but whether they have to be in such detail is probably questionable. You can't have a total free-for-all because it's taxpayers' money. But possibly it's gone too far."
Lyscom's strategy is to avoid saying anything politically partisan and to concentrate on isolating the Charity Commission, knowing the 2006 act failed to define "public benefit". He avoids accusing his opponents - either Labour politicians or the commission itself - of a vendetta against fee-charging schools. And he is well aware that state schools have mixed feelings about the commission's approach, since more bursaries might deprive them of bright pupils and committed parents, and even reintroduce a selective system by the back door. Where he has to tread most diplomatically, though, is with his own 1,200 member schools. Some would happily see others sink if it saved their own skins. If Lyscom seems, at times, to argue that almost anything a fee-charging school does (apart from sending bills to parents) counts as charitable, that is probably inevitable given the diversity of his constituency.
As an opponent of fee-charging schools, I verbally fenced with Lyscom for more than an hour. He never lost his cool and scarcely put a foot wrong, so the best I can claim is an honourable draw. I wish the schools had stuck with the rear admiral.