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Browne Jacobson home arrow Home arrow Insights arrow Blogs arrow For profit schools a non-starter

'for profit' schools a non-starter?

21 April 2015

If there is one education topic likely to cause debate during an election period, it’s the issue of ‘for profit’ schools. As a recent Guardian article confirms, any uncertainty about the Conservative’s position has been clarified by their manifesto – they will not introduce ‘for profit’ schools. But would ‘for profit’ schools even be viable in England?

Schools often generate profit by letting out their facilities or seconding staff. Income generated is recycled back into the school to purchase items for the benefit of students and the community.

A school which allowed surplus income to be paid out to shareholders by way of a dividend would potentially cease to be a charity and lose the tax benefits that come with charitable status. The costs of running the school would then increase significantly, making generating a profit a difficult and unattractive option for investors.

The concept may well be a non-starter for political parties and commercial sponsors alike.

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Vicki Hair

Vicki Hair

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