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Last Updated: Wednesday, 9 November 2005, 12:04 GMT
Private schools fee-fixing ruling
view of Eton College
Schools complain the law was changed without notice
Fifty of England's top independent schools may have broken competition law by sharing information about fees, the Office of Fair Trading has said.

In a provisional finding, it said this meant parents were charged higher fees than they otherwise would have been.

The case involves some of the UK's most famous private schools including Eton, Westminster, Harrow and Marlborough.

The Independent Schools Council said when they realised the law had changed, they ceased - before the inquiry began.

The investigation had been "a scandalous waste of public money", said its general secretary, Jonathan Shephard.

The schools were found to be provisionally in breach of the Competition Act 1998 which came into force in 2000.

Higher fees

The OFT has issued a "statement of objections" to them.

The two main preliminary findings are:

  • they exchanged information about their intended fee increases and fee levels for boarding and day pupils via what was known as the "Sevenoaks Survey". Sevenoaks School, in Kent, then circulated fee tables to the schools concerned, updating it between four and six times each year as their budgets developed
  • this "regular and systematic exchange of confidential information" was anti-competitive and resulted in parents' being charged higher fees than would otherwise have been the case, the OFT said

The OFT has given the schools several months to make written and oral representations.

But in a swift initial response, Mr Shephard said exchange of information was commonplace among charities.

Jonathan Shephard
This is a Kafkaesque situation
Jonathan Shephard
Independent Schools Council
Until March 2000, schools were specifically exempted from competition law and were freely able to do this.

As soon as they realised the exemption had been removed, they stopped - before the OFT inquiry began.

"This is a Kafkaesque situation," he said.

"The law seems to have changed without Parliament realising - and without the independent sector being consulted - contrary to the government's own strict guidelines on consultation.

"Schools are now being held liable for breaking a law which no-one knew applied to them."

He added: "The OFT's broad assertion that sharing information produced higher fees is highly contentious."

Fees rose in line with costs in state schools, the biggest component being staff salaries and pensions.

Schools, care homes and other charities wanted to keep their fees as low as practicable. Sharing information was an effective - but no longer legal - way of doing that.

"The attack by the OFT on the charitable sector is something that should worry all charities.

He said: "We have no doubt that exchange of information among charities in non-educational sectors still continues - and these are sectors which have never had an exemption from competition law. Will charity shops and care homes be next?"

Penalties

The schools have until next March to respond, and the whole process is likely to take another year - a total of three and a half years, which Mr Shephard called "a scandalous waste of public money".

If the OFT does then decide the law has been broken the penalties it would impose would, it said, "reflect the particular circumstances of this case".

The maximum possible is 10% of the worldwide turnover of an undertaking in its last business year - but it did not anticipate anything on that scale.


The OFT named the schools concerned as:

Ampleforth College
Bedford School
Benenden School
Bradfield College
Bromsgrove School
Bryanston School
Canford School
Charterhouse School
Cheltenham College
Cheltenham Ladies College
Clifton College
Cranleigh School
Dauntsey's School
Downe House School
Eastbourne College
Epsom College
Eton College
Gresham's School
Haileybury School
Harrow School
King's School Canterbury
Lancing College
Malvern College
Marlborough College
Millfield School
Mill Hill School
Oakham School
Oundle School
Radley College
Repton School
Royal Hospital School
Rugby School
St Edward's School, Oxford
St Leonards-Mayfield School
Sedbergh School*
Sevenoaks School
Sherborne School
Shrewsbury School
Stowe School
Strathallan School
Tonbridge School
Truro School*
Uppingham School
Wellington College
Wells Cathedral School
Westminster School
Winchester College
Woldingham School
Worth School
Wycombe Abbey School.

*In the case of Truro and Sedbergh, the OFT's preliminary conclusion is that they participated in the Sevenoaks Survey in only two of the three relevant years, from 2001-02 to 2003-04.




SEE ALSO:
Warning over school fee bursaries
30 Sep 05 |  Education
Fee-fixing probe at public schools
29 Jun 03 |  Business
Charity status warning to schools
12 May 04 |  Education
School stereotypes 'being broken'
15 Mar 05 |  Education
Money for private school links
12 May 04 |  Education


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