There are many different types of school systems in the UK. The main two categories are mainstream schools and independent schools (also known as private schools). The most common type of mainstream schools are grammar schools, free schools and community schools. All mainstream schools will receive funding through their local authority or from the government. This is because all children in the UK who are between the ages of 5 and 16 are entitled by law to a place at a mainstream school.
On the other hand, independent schools are not funded or maintained by the government and instead students are expected to pay fees to attend. It is also not expected for them to follow the national curriculum. Almost all independent schools have charitable status. Having charitable status means an organisation does not have to pay income tax on any profits it makes as long as it has only charitable purposes that are for the public benefit. Mainstream schools on the other hand also have charitable status but are not registered with the Charity Commission.
There are many benefits and disadvantages to having charitable status in the UK. I recommend you read on to find out more about why a school may be given charitable status and what exactly it means for a school.
Are state schools charities?
The definition of a charity is “an organization set up to provide help and raise money for those in need”. Schools can be given charity status as they are for the advancement of public education. However, schools must be able to prove that they are for public benefit and cannot automatically be given charity status.
This is due to the Charities Act 2006 which removes the presumption that there is a public benefit from any apparently charitable activity, including educational.
Technically all state-funded schools are given charitable status as they exist to advance education. However, they mostly have exempt charitable status. To put it simply, this means that they do not register with the Charity Commission and instead the Secretary of State for Education is the principal regulator.
Regardless, these schools must still follow charity law and still can be investigated by the Charity Commission if needed.
The governors or trustees of the school must act in the best interest of the governing body of the school. If not, at the request of the Department of Education, the Charity Commision can exercise their power to suspend or remove a governor or trustee.
Do trust schools have charitable status?
Trust schools are foundation schools that are associated with charitable trusts. They are maintained and funded like other state schools but will also receive extra funding and support from a charitable trust. Like state schools, trust schools also have exempt charitable status.
These governing bodies of foundation schools will have greater freedom than other state schools due to the trusts. In most cases, the trust will own the land and building as opposed to the governing body.
The main purpose of the trust is to bring outside expertise. It is common for trusts to be set up as the charitable arm of a business, but it is not restricted to businesses only. Many universities are also encouraged to become trust school partners. Trusts can have seats on the governing body, but it is not expected to make financial contributions to the school.
This article from The Guardian explains more about trust schools here.
Why do private schools have charitable status?
As mentioned above, private schools require students to pay fees to attend unlike state schools. This Think Student article talks more about independent schools here. Unlike state schools, private schools are not exempt charities as they are registered with the Charity Commission.
In order for independent schools to maintain charitable status, they must generate benefit for the public as well as fee-paying students. This is popularly done through opening facilities up to the general public.
For example, Eton College’s Library can be visited state school students as well. You can find out more about their collections on their website here.
Private schools benefit greatly from their charitable status and the biggest benefits are the tax breaks which have been heavily criticised both before and in current news. Their charitable status will give them at least 80% relief on business rates.
For example, schools like Eton can save more than £500,000 a year. This article from Philanthropy Daily talks more about this here .
To keep their charitable status, independent schools may also work with state school as part of contributing to their charitable ethos. This can be done in various ways including the provision of qualified and specialised teachers to state schools or providing classes in subjects that are not typically taught at most state schools like Latin.
Although private schools are not government funded, it might be surprising to hear that many private schools are eligible for public funding. This is primarily because many private schools have been around for decades, sometimes centuries, so their buildings become heritage sites. This funding can be used to restore buildings.