Experience is the best of schools

Faced with the growing realisation of the need for some serious financial planning to pay for the education of his children, Tim Johnson has discovered a psychosomatic pain in his wallet.

All things considered, it may be a good thing that David Cameron isn't planning on sending his children to public school. With his new austerity salary of #142,500 (which amounts, after tax, to a still pretty good-sounding #88,000 or so), he would have to spend the whole lot, and a little bit more besides, on paying the school fees. Maybe Samantha could chip in for the uniforms. Eton, our Prime Minister's alma mater, now tucks into the parental wallet to the tune of #30,000 a year. Most of the top independent schools are remarkably similar. When Thomas Carlyle noted that while experience was the best of schools, the fees were high, he hadn't seen anything.

It's certainly a far cry from the aims and intents of the original foundations: Winchester College was explicitly founded to provide free education for seventy 'poor and needy scholars'. Eton too was established with sufficient bursaries and endowments to enable it to provide a free education for many of its pupils. Even if this aspect of the independent sector is ancient history, it's not so very long ago that comfortably middle class parents would look on the provision of a public school education for their children as something little short of a right. In the late 19th century a year's fees at public school would cost between #20 and #40, at a time when a clergyman might earn #300 a year, and a solicitor or doctor could reasonably expect to earn #800. Even in the immediate post-war period, fees were relatively reasonable, a year at Harrow in 1950 costing #400 - affordable even in the days of sky-high income taxes. The rapid escalation of school fees really got underway in the 1970s, during which average school fees more than doubled, hitting #2,000 in 1978. But that is nothing compared to what has happened recently. According to research carried out by Halifax Financial Services in 2008, average school fees for boarders increased by 86% over the decade from 1997.

What's going on here? On one level the answer is quite straightforward: public schools are involved in a race to the top for facilities, staff and accommodation. The inevitable result is soaring fees. When I went to public school, the first years still studied in little wooden cubby-holes dating back to Victorian times - complete with ancient graffiti and woodworm. That's really not that long ago - Sachin Tendulkar had already played a dozen Test matches for goodness sake - but it's a completely different era. The new generation thrive on comfort. Queen Ethelburga's College apparently provides a list of facilities in each bedroom (telephone and voicemail, timer-controlled TV/video, tea/coffee-making facilities, fridge, music centre, hairdryer, ironing facilities and heated towel rail) that would shame a luxury hotel. The bathrooms at one well-known public school are rumoured to have underfloor heating. If you listen carefully, you can hear Stalky & Co snort with contempt at such lily-livered luxury.

There's an element of the dreadnought-building arms race of the early 20th Century in all this competitive luxury. Once School A has a cutting-edge technology department, then School B has to get one too, or risk falling behind - after all, when fees are so high already, you have to offer the very best, even if that means fees have to rise still further. In fairness to the schools, it's not entirely driven by monogrammed bathmats and broadband access in the chill-out zone (it's not the Government, after all). Maintaining extremely low pupil-teacher ratios, combined with the rapid increases in teaching salaries in the private sector, has seen staffing costs rise dramatically, while even for the lavishly-endowed old public schools, the recent financial crisis has seen other sources of revenue, both in terms of donations and of revenue from land and other assets, diminish appreciably. As if these increasing costs and decreasing revenues were not enough, the impact of the Charities Act 2006 (or at least the interpretation of that Act by the Charity Commission) has incentivised schools to offer bursaries and heavily reduced fees to low-income pupils - at the expense of even higher fees for the rest. The principal casualty in all this is the salaried upper-middle class, that tribe of lawyers, accountants, doctors and civil servants whose children have populated the public schools since the days of Tom Brown.

It is not, I should point out, that they are remarkably ill-favoured by fortune. Their salaries have increased pretty respectably over the past decade (although the last couple of years have seen pay freezes and redundancies), and in any event earning in excess of #50,000 a year puts you (according to the Institute for Fiscal Studies) in the top 10% of the population even if your spouse doesn't work and you have dependent children. In these straitened times, complaining that your income no longer stretches to sending your children to public school is up there with missing out on a second skiing trip in the public sympathy it garners. Yet regardless of whether they are truly deserving of our pity, for the professional classes these have been rather chastening times. When their parents were growing up, the earnings of a lawyer, a doctor, a Major in the army and a stockbroker were all reasonably equivalent, none of them earning stratospheric amounts, but all of them comfortably off. Yet the trappings of this income - large houses in London, or on the commuter belt, three children at independent school - are now completely unattainable.

The reason for this is pretty straightforward: the new distinction between rich and super-rich. The flourishing of the City of London, and the re-emergence of London generally as a magnet to the wealthy from all over the world has led to a disparity between the old-fashioned professions and the new generation of financial whizz-kids, oligarchs and entrepreneurs - the haves and have-yachts. That cosy lifestyle of large houses, foreign holidays and the kids away at boarding school? The admission fee for that lifestyle now is estimated at a cool half a million pounds a year. You just don't pull down that sort of money on a salary, it takes a banker's bonus or a hedge funder's equity payout.

Is there any way for this breach to be resolved? Well, I think we can safely dismiss the prospect of schools significantly reducing their fees. Even as smaller private schools feel the pinch of falling numbers, the larger schools are having little difficulty in making up their pupil rosters. There is, however, a policy that the Government could introduce that, as well as solving our little problem, could potentially revolutionise education provision in the UK as a whole. It's a straightforward, practical policy that would extend parental choice, improve access to good schools, and open up the independent sector to a whole new range of potential pupils. It would also be a natural second step for the Coalition's current plans for education - themselves potentially the most radical since RAB Butler. I refer, obviously, to education vouchers.

Let's just quickly remind ourselves what the Coalition's current plans are: the extension of academy status, with the freedom from local bureaucratic control that implies, to the majority, if not all, current state schools, plus the freedom for groups to set up their own new academies - the Free Schools. Essentially therefore, the Coalition is creating a system whereby schools are operationally independent, within certain guidelines, but in which funding is provided to them centrally on a per pupil basis. All that would be needed to extend this plan would be to allow schools to charge a supplementary annual fee if they so desired, on a means-tested basis, without losing the state funding already received - and then to extend this funding to the existing independent sector.

Could such a policy work? It already does, in Australia where over a third of children are educated at private schools and where the average fee paid at an independent school is approximately AUS$5,000 - roughly equivalent to #3,000. This system has transformed the Australian independent sector, which used to be dominated by a handful of extremely prestigious and concomitantly expensive schools, into a genuinely broad-based sector that caters to a much wider segment of society - although it is true that access is still limited for the very poorest. It's undeniably extremely beneficial to the aspiring classes - not merely the salaried professional classes referred to above, but to the wider middle class to which far more people belong.

So why won't it happen? Politics. The great problem with this system is that it entails state funding for independent schools. You can argue (and you can argue correctly) that independent schools currently act as a subsidy to the state by removing the onus on the state to educate some 7% of children. However, in terms of raw politics, the prospect of David Cameron (Eton), George Osborne (St Paul's) or Nick Clegg (Westminster) standing at the Dispatch Box defending plans to spend public money on their alma mater is inconceivable - all the more so at a time when the Liberal Democrats are getting filleted for their reversal of their tuition fees pledge. Regrettably, the actual merits of the scheme are all but irrelevant in determining its viability. Maybe it's time to start looking up the airfare to Sydney.

Tim Johnson was educated at Winchester College. His children, unfortunately, almost certainly won't be.
This article first appeared in the Spring 2011 issue of Attain.