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Press releases 2006 -

Independent schools agree settlement

Competition investigation resolved

88/06    19 May 2006

The OFT has agreed a resolution of its investigation into an agreement between independent schools to exchange information about intended fee levels. All fifty schools investigated have agreed to the resolution proposed by the OFT and the ISC Steering Group earlier this year.  

Under the terms of the settlement, the schools have admitted that their participation in the exchange of sensitive information through the ‘Sevenoaks Survey’ involved a distortion of competition and infringed competition law. Each school will pay a nominal penalty of £10,000 which will be collected by the OFT on behalf of the Treasury. The schools do not, however, make any admission that the agreement had any effect upon fees.

The schools have also agreed to make an ex-gratia payment totalling £3 million into an educational, charitable trust to benefit the pupils who attended the schools during the academic years to which the ‘Sevenoaks Survey’ related. These were 2001/02 to 2003/04.

Vincent Smith, Director of Competition Enforcement at the OFT said:

‘We are pleased that the independent schools have now accepted the terms of the settlement in this case. This is a fair outcome in a case where the parties have accepted there has been an infringement of competition law, but are also charitable, not-for-profit organisations.’

The OFT will now proceed to a final, formal decision for each school which will record the competition law infringement and the exceptional features of the case which support its agreed resolution.

NOTES

1. The OFT issued its statement of objections in its Competition Act 1998 (CA98) investigation in November 2005 (see press release 214/05). The Independent Schools Council (ISC) Steering Group was set up to consider with the OFT whether an agreed resolution to this case might be possible, following a request from the parties under investigation.

2. The Royal Hospital School is part of a trust, Greenwich Hospital, whose sole trustee is the Secretary of State for Defence. The Royal Hospital School is therefore legally protected by Crown immunity from the payment of any penalty in respect of any CA98 infringement. The OFT cannot therefore legally require the school to pay the £10,000 penalty. All the other terms of the resolution, including the payment into the trust, have been accepted on behalf of the school.

3. The trust will be independent of the schools with trustees appointed following consultation with the Charity Commission and with parents. Schools will make equal annual instalment payments into the trust starting in 2006 with the last payment no later than 31 December 2010.




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