Schools firm aims at gap in market with lower fees

A chain of independent schools is to be set up to bridge the gap between the state sector and top independent schools by charging "affordable'' fees.

The plans by Global Education Management Systems (Gems), a company based in Dubai, is likely to encourage more parents to avoid the state sector and put pressure on other independent schools to cut fees. The Office of Fair Trading is investigating allegations of fee-fixing by independent schools including Eton and Winchester.

The company has taken over two private schools in Britain and is looking for more. It also plans to build schools on greenfield sites within easy reach of city centres.

Gems employs Mike Tomlinson, the former chief schools inspector who is heading the Government's inquiry into exam reform, as an adviser. He said yesterday the choice for parents was limited. "Where the state system doesn't provide the type of education that they would like for their children, parents are forced to find increasingly prohibitive funds for school fees - inflating at 7 per cent a year - or pay up to £50,000 premium for a house in the right postcode."

Gems' parent company is owned by Sunny Varkey, who runs about 30 private schools in the Middle East. Gems, which said it had "several million pounds" to spend, has several well-known names on its management board. They include Sir Gareth Roberts, president of Wolfson College, Oxford, who headed a government review into the shortage of science and engineering skills; Elizabeth Passmore, a former head of inspections at the education standards watchdog Ofsted; Nick Stuart, a former head of policy at the Department for Education; and James Sabben-Clare, a former headmaster of Winchester.

Simon Cummins, Gems' director of schools, said yesterday: "We don't have a magic figure as to the number of schools we want to create. There is no limit - we are merely responding to demand. We're talking to several independent schools and are also looking at brownfield and greenfield sites where we can establish our own schools. We don't want to be seen as offering cut-price education because of the connotations that might have but we do see ourselves simply offering a more affordable education that is lower in cost than at a lot of independent schools.'' Fees at independent schools can be as high as £20,000 a year. The fees at Bury Lawn school in Milton Keynes, Buckinghamshire, one of the schools taken over by Gems, are just over £7,000 a year. Bury Lawn, a co-educational day school for children between one and 18, also offers specialist facilities for dyslexic students. The company has also taken over Sherborne House, a prep school near Southampton.

Gems said all its new schools would be co-educational and day schools. Mr Cummins said Gems' ambitions would lead to more pupils leaving the state sector. "We detect there is a demand for more affordable independent education." Its decision is also likely to put pressure on other independent schools to curb fee rises.

Gordonstoun, the Scottish boarding school that the Prince of Wales attended, said last week that its fees would go up by 2 per cent next year- compared with rises of between 8 and 12 per cent this year in the rest of the independent sector.

Mr Varkey's parents set up Our Own English High School in Dubai 30 years ago. He expanded the operation into a chain after taking over in 1980.