HomeOpinion"Why are we exporting a model of inequality around the world?"

“Why are we exporting a model of inequality around the world?”

Robert Verkaik, journalist and author

The relentless quest for more and more fees has forced some of the best-known English public schools to cash in on the overseas education markets.

They have done this by establishing off-shore franchises in faraway places, with the most popular locations in Thailand and China. But there are now public school outposts even in Kazakhstan and Qatar.

Here, they are well placed to market their education brands directly at a middle-class client base who cannot afford the expense of sending children to the UK.  

Research by Private Education Policy Forum found that out of 100 high-attaining British private schools, 38 schools were operating 122 satellite campuses in 2022-23.

A further 28 campuses are planned for the near future, which will bring the total number of British private schools with overseas campuses to 44. Forty of these have charitable status.

The thinktank calculated that between 2011-12 and 2020-21, these 40 British private schools received around £18.7 million in tax breaks for these ventures.

Do you know how they did this? By using their charitable status to avoid corporation tax through Gift Aid donations. This meant £5.5 million in unpaid tax in 2020-21 alone. 

Seen in these terms, it is easy to see why the public schools value their foreign schools’ financial contribution.

Harrow led the way in 1998 by setting up a school in Bangkok, where its famous straw boaters helped promote its brand of quintessential English education.

It now has schools in Beijing and Hong Kong too. Sherborne, a boarding school in Dorset, has opened a branch in Qatar and Wellington, a boarding school in Berkshire,  has a franchise in Shanghai.

Meanwhile, Clement Attlee’s old school, Haileybury, has set up in Almaty, Kazakhstan. 

Several girls’ schools have also taken the plunge.  In 2021 Wycombe Abbey in High Wycombe, Buckinghamshire, in a partnership with BE Education, opened franchises in Nanjing and Hangzhou in China.

But it is Nigel Farage’s old school, Dulwich College, that is capitalising most on the education of foreign students.

Through an exclusive worldwide charter agreement with Dulwich College Management International, it has established eight full International Schools and two International High Schools in Asia, all taking the Dulwich name. 

Currently, more than 9,000 students are receiving a Dulwich-linked education overseas. Four Dulwich Colleges have been established in China (two in Shanghai, in Pudong and Puxi, and one each in Beijing and Suzhou), one in Seoul, South Korea, and one in Singapore.

These seven schools are all co-educational and principally cater for the expatriate community. In addition to the international schools, two High Schools have been established in China (in Suzhou and Zhuhai), working with local  Chinese schools, to teach the IGCSE and A Level curriculum to Chinese pupils who are aiming to attend universities in the UK, USA and elsewhere.

The number of foreign scholars attending English public schools abroad is estimated to be more than 60,000, mostly children from rich and influential families. For this reason these enterprises are presented as an important part of Britain’s soft power.

However, just how ‘British’ are they?

Most of the new breed of schools are run by local management companies.

Some schools are even considering franchising entire regions to education providers, including American chains.

At that point the link to the playing fields of England becomes rather stretched.

And there are also cultural tensions. 

China, for example, does not allow foreign schools to teach Christianity. King’s School in Canterbury pulled out of a partnership there, concluding that the constraint was inappropriate given its association with the cathedral, the historic seat of the Church of England.

As demand continues to grow, profitable new markets are in South America, notably Chile and Mexico.
However, Britain’s best know public school, Eton College, has conspicuously chosen to eschew the foreign franchise market. Its governors believe such a move would damage the brand. 

There are also wider taxation and ethical implications to consider. 

As the PEPF research shows, these satellite campuses generate substantial profits in developing countries, which, for those British private schools with charitable status, are largely transferred tax-free to the ‘home’ school.

Under Charity Commission rules, charities are banned from trading only to raise funds, meaning many private schools set up companies to operate international franchises on their behalf.

Profits are then channeled from the subsidiary company back to the UK-based school via Gift-Aided payments, thus sidestepping corporation tax.

This tax benefit is in addition to the 80% tax relief on business rates that private schools with charitable status benefit from on home soil, and also in addition to the separate exemption from VAT (value-added tax). 

In 2017 there were 59 overseas campuses run by English public schools educating a total of 31,773 pupils.

That was the first year where the number of pupils attending overseas campuses exceeds the number of overseas pupils attending UK schools.

The number is now double that and is only going to get bigger.

Ultimately, wherever a child grows up in the world, it boils down to this. If the family has enough money, they can afford to pay to improve their child’s life chances at the expense of other families who cannot.

In Britain, where those attending private schools are already blessed with huge advantages, parents use their wealth to multiply these gains over other children. 

The American economist Alan Krueger, who developed the Great Gatsby Curve correlating inequality with social immobility, has said that well-off families use private schools in America to protect their assets and pass them onto the next generation.

The English public school is a much more complex and subtle institution, but it too guarantees the advantage is seamlessly transferred from one generation to another.

And having failed to reform this inequitable system at home, we are now exporting the model to the rest of the world, while at the same time sending millions of tax-free profit back to the schools at home.

It is time to reform the tax system so that families using the private schools to game the education system are not handed tax incentives to do so.

Abolition of charitable status for public schools is an important first step that will generate £1.5 billlion to help our underfunded state schools.

If politicians are serious about levelling up, then they must make multimillion enterprises like Eton College, Harrow and Wincester College pay their fair share of corporation and business taxes. 


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