Richest private schools 'spend less on places for poor pupils'

More than a quarter of fee-paying schools offer less than 5 per cent of their total income in scholarships and bursaries, according to a study commissioned by the Sutton Trust.

One-in-eight allocate less than 3 per cent of their total income for the purpose.

The study, conducted by researchers at Staffordshire University's Institute for Education Policy Research analysed the websites and financial accounts of 348 private schools for 2008.

The findings show that on average, private schools devoted 7.8 per cent of their total incomes in 2008 to providing bursaries and scholarships to pupils from poorer families who cannot afford the fees.

But the most prestigious schools – those that ranked between one and 70 in a league table published by The Times, spend 4.3 per cent of their total income on financial aid for poorer youngsters.

In comparison, schools that were ranked between 211 and 280 set aside more money – some 7.2 per cent of their income, for bursaries and scholarships, the study says.

The report says: "A plausible explanation of this is that schools that are higher up the ranking have more market power and can attract not only the number of students they want but also the ability of students they want without having to offer as high a level of fee remissions."

The study did find that schools that charged higher tuition fees set aside more money for financial aid. But, schools with higher incomes spend less money on bursaries alone.

Schools which set aside 1-2 per cent of their total income to bursaries have an average income of 10.4m, while those that give over 6-8 per cent have an average income of 8.2m.

The report notes that schools which have big financial reserves, and receive large amounts of donations were able to put more money into funding scholarships and bursaries.

Chairman of the Sutton Trust Sir Peter Lampl said: "The fact that the fee-paying sector is devoting a greater share of its income to fee remissions – and bursaries in particular – is welcomed. However, half of the fee remissions still go to scholarships which are not means-tested. While partnership and community work are important components of public benefit, bursary provision is perhaps the most effective way independent schools can boost social mobility." Under new rules, private schools must prove they benefit children who cannot afford their fees in order to keep their charitable status and the tax breaks that come with it.

The Independent Schools Council (ISC), which represents about 1,200 private schools, previously raised concerns that the Commission was taking a "narrow approach" to the rules and has said it is seeking a judicial review of the guidelines.

ISC Head of Research Rudolf Eliott Lockhart said: "Contrary to the Sutton Trust's report, and using a larger sample and data which is both fully up to date and consistent, we have found no correlation between bursaries and a school's ranking or revenue.

"Bursary provision will depend on many factors, not least whether the school has endowments available to it to make generous provision and the costs involved in operating the school."

The Charity Commission said: "The provision of subsidies or bursaries is only one way in which independent schools that are charities can further their charitable purposes for the public benefit.

"All activity that charities do in furtherance of their charitable aims for the public benefit is taken into account, which for schools could include sharing facilities, teaching or materials."