Do independent, fee-charging schools provide a public benefit?
By Mike Baker
BBC education correspondent
That, in essence, is the test private education faces under the newly-published draft Charities Bill for England and Wales.
The independent sector, which educates some 600,000 pupils, may now have to look forward to the Charity Commissioner calling.
Charitable status is worth quite a bit. It means 80% relief from business rates, and tax relief on investment income and covenanted gifts or appeals - for a new sports hall, for example.
In 2001, the Independent Schools Council (ISC) estimated that charitable status was worth £88m. However on a total fee turnover of £3.4bn that is a relatively small proportion.
Still, with fees rising at 9.6% last year, loss of charitable status would add to the growing costs for parents.
Has the independent sector anything to fear? Government sources suggest not. As one insider put it this week, they are "not in the mood to start clobbering the private schools".
The ISC accepts the government is not out to "get" its members. But it is keeping a wary eye on some Labour backbenchers who it believes would jump at the chance of attacking private schools.
It fears that, if the government continues to find itself in difficulties over Iraq, it might be happy to toss a sacrificial bone or two to its own backbench critics to try to win back some favour.
Shared facilities and the nature of scholarships could be key tests of charitable status
The great majority of the big "public" schools are charities, as are many of the smaller independent schools.
It is the latter who perhaps have the most to worry about. They do not have extensive facilities to share with local state schools nor do they have the financial capacity to offer means-tested scholarships.
Shared facilities and the nature of scholarships could be key tests of charitable status.
In recent years, the big public schools have been moving away from offering scholarships on the basis of ability alone. Instead they now prefer to give financial assistance only to those who need it.
Similarly, sharing facilities is not a huge problem for many schools.
Bancroft's School in Essex, for example, allows local community groups to use its swimming pool. It costs the school very little, provides good PR, and it showcases the school's facilities and may even attract a few applications.
After the Labour government stopped supporting students at independent schools by abolishing the Assisted Places scheme, Bancroft's - like others - set up its own scholarships for bright students from poorer families.
For families earning less than £15,000 a year, the scholarships cover the full cost of fees, with support diminishing on a sliding scale up to incomes of £35,000.
This sort of scheme may help keep charitable status. The Independent Schools Council says almost one-third of its pupils receive some help with fees.
However critics say scholarships are window-dressing. They point to the very high fees charged at schools like Eton or Rugby and ask how schools which charge so much more than the cost of state schooling can justify the tax benefits of charitable status.
Others point out that, with some notable exceptions, the independent schools are willing to offer financial support to the gifted and talented but are not quite so keen to welcome the difficult and fractious or, even, the child of average abilities.
A recent Fabian Society report by Harry Brighouse urged the prohibition of selection at independent schools as a condition of continuing charitable status.
The change in emphasis in scholarships may be welcome but much of the help is still offered in order to attract the very bright, the sporty or the musically talented.
A few years ago, because of uncertainties over state school allocations in my area, my elder daughter took the entrance tests at a couple of local independent schools.
This timing gave them first pick of the crop and allowed them to charge parents non-returnable deposits
She was offered two different scholarships, each worth one-third of the fees. I felt grateful at the time, but looking back I have to wonder whether that help should really have been offered to those whose financial need was greater.
The independent schools also made sure they made their offers before the state school admissions were decided.
This timing gave them first pick of the crop and allowed them to charge parents non-returnable deposits before they knew which state school offers they would receive.
In fact my daughter stayed in the state sector but not before we had lost a hefty deposit. I couldn't help but feel that it would have been more "charitable" if the independent schools had kept to the same admissions timetable as the local state schools.
In general, though, the independent schools do seem to be more aware of their public image than in the past. Many do a lot for their local communities.
But is it yet enough? Back in 1919, the chairman of the Headmasters' Conference - representing the big public schools - told the then Board of Education they were "prepared to offer as a voluntary service ¿ that share in the education of ex-elementary schoolboys which was demanded by the state from other schools".
It is still a long way from that, although the independent sector does save the taxpayer a lot of money by educating children who would otherwise be a cost on the state. The ISC estimates this at £2bn a year.
The independent sector, though, could be more centrally involved in state-funded education. In Sweden, for example, private schools receive state funding for pupils under a voucher scheme.
Since the scheme began in 1992, the number of private schools has grown considerably, offering parents greater choice.
But to comply with the scheme the private schools must have non-selective admissions policies, accepting pupils on a first-come, first-served basis - and they cannot charge any top-up fees.
Some might like similar conditions imposed here. But, unless the Charity Commission takes a tougher-than-expected line, that looks unlikely.