09/11/2005

Public schools found guilty of fee fixing

Fifty of England’s top public schools have broken competition law by exchanging information about fees, the Office of Fair Trading has announced.

Following an investigation lasting more than two years, the OFT found that pupils’ parents ended up paying higher fees as a result of the information-sharing.

The investigation involved some of England’s most prestigious schools, including Eton and Harrow.

The OFT issued a statement of objections to the schools involved, setting out its provisional findings that the agreement – from March 1, 2001 to June 2003 - had breached competition law by sharing information on intended fee increases and fee levels.

The OFT centred on the ‘Sevenoaks Survey’, to which the schools submitted details of their intended fee increases and fee levels ahead of the beginning of each academic year.

The details were then collected by Sevenoaks School and circulated, in the form of tables, to the other schools involved in the survey. The information was then updated and circulated between four and six times per year as school developed their fee increase proposals in the course of their annual budgetary processes.

The OFT said that 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 that the school had been given several months to make written and oral representations on the statement of objections, before a final decision and any appropriate penalties were made.

The maximum penalty could be as high as 10% of the worldwide turnover of an undertaking in its last business year, but the OFT said that it did not anticipate that any penalty imposed would be at the top end of the range.

The investigation is one of the largest undertaken by the OFT. However, it has been criticised as a “scandalous waste of public money” by the Independent Schools Council. ISC General Secretary Jonathan Shephard said that the investigation was an attack on the whole charitable sector. He said: “Schools – along with care homes and other charities – are concerned to keep their fees as low as practicable. Sharing information is an effective – though no longer legal way of doing that.

“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?”

The schools concerned are: 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 and Wycombe Abbey.

In the case of Truro School and Sedbergh School, the OFT's preliminary conclusion is that they participated in the Sevenoaks Survey in only two of the three relevant years.

(KMcA/SP)

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