Auriol Stevens: 'Private schools must change – or we all suffer'

'There is no more damaging divide in society today than this one in economic and social terms." Thus Anthony Seldon, master of Wellington College, described the state/independent school split this summer.

It has been getting worse. The rich have been getting richer, and less apologetic about it. Education is used to entrench advantage into the next generation. Private schools raise fees above the rate of inflation to provide better facilities and smaller classes than state schools.

Selecting financially, academically and socially, private schools excel at getting students through traditional academic exams, giving them a head start in the competition for places at top universities. Social mobility is thwarted, creativity is stifled and resentment flourishes.

This is "utterly avoidable", says Seldon. He may be unduly optimistic. But there is a new willingness to confront divisions that have worried educators for 150 years.

Schools are under financial pressure. The credit crunch is biting. Some schools are closing. William Hulme's in Manchester and Belvedere in Liverpool have given up fees and selection to become academies. Costs will rise further. The Charity Commission is moving carefully but determinedly to make sure the Charities Act 2006 is effective. The act removed the presumption that providing education was itself a charitable activity. Now those claiming charitable status, and the tax breaks that go with it, must demonstrate – not just assert – the "public benefit" of what they do.

Most of the 100 schools surveyed recently by Zurich Financial Services are putting more money into bursaries to help people who can't afford the full fees. Some plan to raise fees to "fund measures allowing them to prove their charitable status". Almost half are opening up lessons to neighbouring schools or thinking of doing so.

The Independent Schools Council, representing 1,450 fee-charging schools, from the grandest to those providing for children with special educational needs, is busily "spreading good practice" while reaching for lawyers to warn the Charity Commission against too robust an interpretation of the act.

There is a dilemma for the schools. As they become more expensive but less exclusive, the benefits they sell become less obvious. So customers defect or mix and match – state primary, state sixth form, a few years boarding.

Meanwhile, the Government's academies programme, now enjoying cross-party support, offers an escape route. In a sign of changing times, the Rev Tim Hastie-Smith, chairman of the Headmasters' and Headmistresses' Conference, a club for some 250 heads of the poshest schools, which holds its annual meeting next week, is leaving the fee-charging sector to run a new academy in Kettering.

He shares Anthony Seldon's view of the social divide. "It's one of the biggest problems with the independent sector," he said earlier this year. "Many independent heads, myself included, are actually very uncomfortable with the word 'charitable' being applied to our schools. We are businesses. We do make money. I can't pretend that an institution which is providing a very expensive education and is necessarily excluding a huge segment of the population is a charity."

Those with the interests of state schools at heart, such as the Education Review Group, which met the Charity Commission last week, are pressing the latter to make sure "charity" means something in future. They want the commission to use its powers to produce greater transparency. Until now, most charities have not had to account openly for the public benefit of their charitable activities.

They also want those activities to be carefully scrutinised, arguing that scholarships and bursaries, which strip talented, well-motivated children out of state schools, damage the public interest by harming the schools attended by the majority of children.

Full-cost bursaries, on the other hand, enabling looked-after children or children from dysfunctional homes to benefit from small classes and/or boarding, could be useful. Specialist teaching in subjects where state schools lack qualified staff, for example in science and maths, should count as benefiting the public, as should opening up their Combined Cadet Force corps to pupils from state schools. Use of swimming pools for a charge should not count as a benefit. Helping to develop the 14 to 19 diplomas to suit the full range of students, including those in independent schools, would prevent the divide becoming bigger.

Faced with these pressures, some schools may want to throw in the towel. But it is not an option. They cannot ask to be removed from the register of charities, forego the tax breaks and become businesses because their assets have been acquired through charitable giving and remain charitable for ever.

Many of the schools in question were founded to educate the poor. If they could now think imaginatively about how to renew their charitable purpose, they could begin to bridge this most damaging divide

The writer is a former editor of 'Times Higher Education'