Opinion: Price fixing affects public school benefit

Nick Cater, a consultant and writer: catercharity@yahoo.co.uk

When my alma mater, Sevenoaks School, was first accused of anti-competitive collusion by circulating a survey of planned fees among its fellow public schools, many of them charities, the story seemed merely to be a bit of cosy co-operation of no great consequence, and inevitable among those with similar interests.

But it's all turned out to be far more serious. The Office of Fair Trading last week delivered its verdict that dozens of public schools have been guilty of price fixing by sharing information. Those accused can respond to the finding, but fines are expected and many schools have already started squirreling away cash to meet the penalties they might face.

Perhaps fearful of tackling too many entrenched interests at once, the Government decided to allow public schools to retain charitable status under the new charity legislation by assuming they will meet the ill-defined test of "public benefit".

Delight was the response from the public schools, which can thus continue to appeal for donations that qualify for Gift Aid and charge five-figure fees. And those fees have climbed 50 per cent in ten years, well ahead of the rate of inflation - thanks, at least in part, to those price-fixing cartels.

Was this the arrogance of businesses that wanted to fix the market and exploit their customers, or the arrogance of charities that, as do-gooders, felt they could not possibly be doing anything wrong - or, at least, would not get caught? And does it matter if the wealthy - top annual school fees can easily exceed the UK average wage of £22,000 - pay a little more?

With public schools said to receive some £100m in tax benefits that other charities might feel could be far better spent elsewhere - perhaps on those with fewer privileges or opportunities - this is not a small issue.

The fees are also of concern to every taxpayer because it appears - like other charities taking state contracts - that public schools receive another £100m of public funding to pay for those many pupils whose parents work overseas in the armed forces, the diplomatic service and other institutions.

Because their behaviour has been judged to be against the public interest by a department of this Government, and such actions clearly undermine the public's confidence in charities, surely it is time to reconsider once more whether public schools should be given the benefit of the doubt about public benefit?

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