May Warns U.K. Private Schools Their Tax Breaks Are at Risk

(Bloomberg) -- Theresa May told Britain’s private schools they must help their state-run counterparts or face losing tax breaks.

The prime minister’s speech on education on Friday drew fire over her plan to overturn decades of policy consensus by allowing the expansion of grammar schools, which select pupils on ability. But she also had a warning for schools in the fee-paying sector.

“These schools have become more and more divorced from normal life,” May said in a speech in London. “Between 2010 and 2015 their fees rose four times faster than average earnings.” She said that she would be “asking them to do more as a condition of their privileged position to help all children.”

That means that if they want to keep their charitable status, which allows them to avoid tax, the schools will have to offer support, facilities and even teaching time to children at nearby state schools.

May’s speech, her first set of announcements on domestic policy since she became prime minister in July, sparked controversy over grammar schools, which select children at the age of 10 or 11 on the basis of tests. Such schools were widespread in the 1960s, but most were stopped from picking the cleverest pupils by Conservative and Labour governments in the following decades because of the negative effects on the children who failed to qualify.

Tory Criticism

Nicky Morgan, who was education secretary under May’s predecessor David Cameron, said after the speech that she continues to oppose the extension of academic selection for schools, suggesting May will find it difficult to get the change through Parliament. Cameron’s government rejected calls for new grammar schools, even though they are popular with some Tory lawmakers.

“An increase in pupil segregation on the basis of academic selection would be at best a distraction from crucial reforms to raise standards and narrow the attainment gap; and at worse risk actively undermining six years of progressive education reform,” Morgan wrote in a posting on Facebook. “The evidence is now incontrovertibly clear that a rigorous academic education does not need to be the preserve of the few.”

Data shows the schools tend to disproportionately help wealthy children who can afford extra tuition to get through the entry tests while harming opportunities for their poorer contemporaries.

‘Arbitrary Rule’

In an effort to offset these problems, May said she’s considering whether new grammar schools should be required to take a quota of poor children, or to establish and run parallel non-selective schools. She’ll also require universities that want to increase tuition fees to sponsor under-performing schools.

“For too long we have tolerated a system that contains an arbitrary rule preventing selective schools from being established, sacrificing children’s potential because of dogma and ideology,” May said. “The truth is that we already have selection in our school system -- and it’s selection by house price, selection by wealth. That is simply unfair.”

Michael Wilshaw, the chief inspector of schools, warned that expanding grammar schools could put progress in education at risk. “We will fail as a nation if we only get the top 15-20 percent of our children achieving well,” he told the BBC.

Another May proposal, to allow schools set up by faith groups to select pupils on the basis of religion, was also criticized by her own side. “I strongly oppose 100 percent faith schools and will be voting against religious segregation of our children,” Conservative lawmaker Sarah Wollaston said on Twitter.

--With assistance from Thomas Penny To contact the reporter on this story: Robert Hutton in London at rhutton1@bloomberg.net. To contact the editors responsible for this story: Alan Crawford at acrawford6@bloomberg.net, Thomas Penny, Andrew Atkinson