The UK’s competition watchdog has issued a stern warning to independent schools that it will levy hefty fines if they are found to have colluded on tuition fee pricing amid the Covid-19 pandemic.
The Competition and Markets Authority said it was aware that some independent schools “may be engaging in discussions with each other about the level of discounts and/or refunds on school fees” in a letter to the Independent Schools Council and other sector bodies.
In its letter, the CMA warned that any attempt to agree prices and exchange commercially sensitive information would likely infringe competition rules and could result in fines equal to 10% of annual turnover.
Many independent schools – particularly those not owned by large corporations but are instead family owned – have been hard hit by the Covid-19 crisis. Many are facing cash crunches as fee-paying parents have lost jobs and income streams and have thus pulled children from schools. Large numbers are offering discounts and refunds, as families complain that the online education in place of classroom learning is subpar.
Some private schools have already announced they will close because of the impact of the pandemic. Earlier this month, Moreton Hall Preparatory School in Bury St Edmunds said it would shut after the summer term.
The letter – written by CMA senior director, Howard Cartlidge, and obtained by the Private School Policy Reform thinktank – acknowledged the need for increased collaboration between schools during a time of crisis, but stressed that this did not give any a “free pass” to engage in non-essential collusion.
According to The Guardian, the letter stated: “We are sure that you share our concerns not just about the unacceptability of anti-competitive practices in the current circumstances, but also the risk of undermining public trust more widely across the independent school sector. It is therefore vital that any poor behaviour is nipped in the bud now.”
In 2006, the now-defunct Office of Fair Trading found that 50 independent schools, including elite institutions including Harrow, Eton College and Westminster, had broken competition law by sharing information about pricing intentions. Each was fined £10,000.