The business of private schools

The Bottom Line

BBC

Personal Journals, Society & Culture, Business

4.6 • 606 Ratings

🗓️ 18 July 2024

⏱️ 34 minutes

🔗️ Recording | iTunes | RSS

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Summary

Private schools in the UK are mostly registered as charities – but they are also businesses – businesses in the sense that they sell a service to paying customers.

They’ve recently been in the news because the new government has said it will remove their exemption from VAT.

In this episode we take a look at the business of private education: how it works, how much money is made and what will happen when exemption from VAT is removed from school fees.

Evan Davis is joined by: Geoffrey Stanford, Head of Royal Grammar School Newcastle Jesse Elzinga Head of Sevenoaks School Cheryl Giovannoni, CEO, Girls' Day School Trust (GDST) Duncan Murphy, Director of Education, MTM Consulting

PRODUCTION TEAM: Producers: Drew Hyndman and Alex Lewis Editor: Matt Willis Sound: Rod Farquhar Production co-ordinator: Rosie Strawbridge and Janet Staples

Transcript

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0:00.0	BBC Sounds, Music, Radio, Podcasts.
0:05.3	This is the podcast version of the programme.
0:07.5	It's some extra material in it that we didn't have room for in the radio broadcast.
0:11.9	I hope you enjoy it.
0:14.0	Hello, welcome to the programme.
0:16.1	Private schools in the UK are mostly registered as charities,
0:20.5	but they are, of course, also businesses, in the UK are mostly registered as charities, but there are of course also businesses,
0:23.2	businesses in the sense that they sell a service to paying customers. Now, they've been in the
0:28.7	news of late because the new government wants to treat them a little more like businesses and a little
0:33.2	less like charities by removing their exemption from VAT. And we thought that gave us a great pretext
0:39.7	for looking at the business and economics of private education, how it works from where the money
0:45.3	comes, where it goes. We will talk about VAT on private schools, but we won't only talk about VAT.
0:54.3	Now, on figures I have seen, about 6% of school children in the UK are privately educated, much higher at 6th form level,
1:03.3	but that 6% of students absorb maybe 15% of the resources devoted to schools.
1:09.4	However, it is important to understand that when we talk
1:11.9	about private schools, we are talking about several very, very different types of school
1:16.9	in very different markets. So we will and must distinguish between them. I have four guests
1:23.3	to help me out and let's meet them and And we'll start by meeting two head teachers from two
1:28.0	somewhat different types of school. First up, on the line, Jeffrey Stanford, head of Royal Grammar
1:33.7	School in Newcastle. Give us a quick biography of Royal Grammar School, Newcastle.
1:39.5	So we are nearly 500 years old. We have 1330 students in the school. We are a large regional day school in an area of the country which is not affluent, and therefore we consciously keep our fees as low as possible to be as accessible as possible. We have a large bursary program with, as of September, it will be 90 students fully funded.
2:03.0	Last year we won the award for the independent school of the year based on our partnership program,
	...

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