How private schools can earn their keep

It is a class warrior's fantasy, the one that sees Labour suddenly deciding to remove Eton's charity tax breaks

One of the great confidence tricks that the affluent society plays on itself is the one that dictates that charity is always a good thing. This is most apparent in the run-up to poppy day, when we are all encouraged to "wear our poppies with pride". Actually, why should we be wearing our poppies with pride? Shouldn't we be wearing them with shame? Shouldn't we all be thoroughly downcast that ex-servicemen, in our supposed welfare state, are reliant on our patronising handouts when they fall on hard times, and not decently supported by the state as a matter of course?

One of the great confidence tricks that the affluent society plays on itself is the one that dictates that charity is always a good thing. This is most apparent in the run-up to poppy day, when we are all encouraged to "wear our poppies with pride". Actually, why should we be wearing our poppies with pride? Shouldn't we be wearing them with shame? Shouldn't we all be thoroughly downcast that ex-servicemen, in our supposed welfare state, are reliant on our patronising handouts when they fall on hard times, and not decently supported by the state as a matter of course?

Or Barnardos and the NSPCC. What do they think they are doing with their competitive-horror advertisement campaigns, each more shocking and vile than the last, each designed to persuade the public to give money to them and not to all of the other charities clamouring for funds, particularly the other children's charities?

The amount of cash spent on marketing charities, booking adverts and sending out mail-shots must be phenomenal. Frankly, one hesitates to give one's address to a charity for fear of the mountain of free pens that will then flow through the letterbox. Can this really be cost effective? If it is, why can you not move on the high street for paid salespeople, hassling you into signing up for another direct debit?

Why are so many charities, often raising money for such similar causes, set up almost in competition to state services anyway? Why all the repetition of expertise, all the lack-of-economy of lack-of-scale and all the duplication of effort? And why, if all this marketing-led charity-business is working, have charitable giving and volunteering been declining?

Why? Why? Why? Why? There are a million questions that could be asked about the state of charitable Britain, and I presume that when the Draft Charities Bill is published on Thursday, it will touch on quite a few of them. But one rather more ideological issue appears to be creating all the excitement: why do private schools have charitable status?

It's a class warrior's fantasy, the one that sees New Labour, in a nod to its grassroots, suddenly deciding to remove Eton's charity tax breaks. Why not? Eton, after all, has an annual turnover of £28.2m, charges its pupils £21,000 a year, and recently dropped a cool £4m trading on the high-risk currency and futures market. Its charitable status means that it receives 80 per cent relief from the uniform business rate, relief on bank deposits and income from investments, not to mention its ability to claim back tax on gifts from benefactors.

The latter, particularly, is highly irritating. George Foulkes, the Labour MP for Carrick, Cumnock and Doon Valley, did look into introducing a private members' bill that would tackle the issue, but found that private bills are not allowed to increase taxes for individuals or organisations. The Scottish Executive similarly got the idea into its head that it could sweep away tax privileges for private schools in this way, but was foiled by its own lack of tax-raising powers.

Nevertheless, it is expected that the Draft Charities Bill will address this thorny issue to some degree. No one imagines that the Bill will actually suggest that charitable status is removed from private schools. But there is a real possibility that in order to qualify for tax breaks, they will have to pass tougher new requirements for organisations to show a "clear public benefit" in order to qualify. Independent schools are already encouraged to do this, of course, and grants are already available for joint enterprises between private and public-sector schools. But a few days ago Charles Clarke, the Secretary of State for Education, perhaps in a foretaste of regulations to come, warned a conference of independent school heads that they should move away from old policies.

"There are two possible approaches which independent schools could take in forging links with the maintained sector: a separate independent sector, offering scholarships to a few, very able pupils from the maintained sector. Or working in partnership to reach the many, not the few, valuing difference, tradition and excellence," he said. Mr Clarke added that it was up to schools to decide which way they went, but urged them to take the latter route.

At least one of the heads had clearly sussed which way the wind was blowing ages ago. Dulwich College, the south London independent school that famously educated Raymond Chandler, announced yesterday that it would be responsible for running a new city academy to be opened in east London.

There is a certain poetic justice in the idea that Dulwich College should be lending its expertise to the state sector. After all, the school's intake almost entirely consists of liberal south and east Londoners who vote Labour and live Tory, thus, many would argue, doing great damage to the comprehensive system. They remove a vital element of its social and academic mix, and attract staff away from the public sector with those high, tax-break supplemented salaries. At least this way something is going back.

But it is not, by any means, going to be enough for the class warriors. After all, city academies are new-fangled schools, not comprehensive, but nominally selective, and funded directly from Whitehall. Having them run under the auspices of private schools will for some be frankly repellent.

I think the experiment is well worth observing though, as it could offer a real test of the theories the left and the right have about the state sector. In her recent film about state education, Fiona Millar presented a rosy view of the state sector that was too ideologically laden to be true. All selection - even the sort of selection which puts you off sending your child to a certain school because he keeps on getting his lights punched out there - was wrong.

Ms Millar castigated the people of Lambeth, south London, because so many thousands of pupils are educated outside the borough (even if they remain within the state sector). But in fact, this largely happens not because parents actually choose to send their children to schools outside the area, but because there are massively fewer places than pupils at secondary level in Lambeth.

For its residents, the situation is hellish. However much you may wish to deny that any of its shortcomings are self inflicted, the fact that a borough is spectacularly unable even to provide enough places for its pupils does suggest a level of actual incompetence that is surely undeniable.

It will be most interesting to see what the educationalists of Dulwich College make of the intake they will be attracting in east London. But since private schools are not going to go away, and since social deprivation is not either - not under Labour or the Tories anyway - it will be fascinating to see whether anything useful can be learned when the two are brought together. If the results are good, then it will become possible to suggest that only the schools which can impact on the public sector deserve their charitable status, while those which cannot, are not all they're cracked up to be in the first place. If they're bad, then right-wing arguments about the innate superiority of private sector education will be sorely damaged. Either way, there's a chance at least for a debate in stalemate to shift. Charity may begin at home, but it's about time we worked out what exactly it ought to be achieving at school.

d.orr@independent.co.uk