Conditional bursaries – what are the risks and restrictions?

Bursaries to attend independent schools are not a new concept, nor is it new that schools are approached by donors (often alumni) that want to contribute to the education of a fortunate child or children. Following the introduction of the ‘Stormzy’ bursary (offering two funded places for black students to study at the University of Cambridge) the lawfulness of bursaries has been discussed in the media, and in particular, whether bursaries conditional on a person’s characteristics can be discriminatory.

This article considers when a bursary may be permitted under the Equality Act 2010, the exemptions in charity law, and the data protection and data processing considerations for monitoring the effectiveness of a bursary.

Is the criteria discriminatory?

The Law

The Equality Act 2010 prohibits discrimination against applicants, pupils and former pupils in relation to the terms upon which they are admitted to the school, or regarding the availability of the benefits, facilities and services they receive by the school, on the basis of one of the nine protected characteristics (age, disability, gender reassignment, pregnancy and maternity, race, religion or belief, sex and sexual orientation). A school’s provision of a bursary/scholarship could potentially fall foul of the Act if it is discriminatory in relation to one of the protected characteristics.

Occasionally, when a donor offers to fund a bursary, they have specific criteria or conditions in mind that the recipient must satisfy. Often these conditions are based on the characteristics of an intended recipient, which may amount to a protected characteristic under the Act. An example of this would be to provide a bursary for Syrian children to attend the school.

Whilst generally it would be prohibited to treat one group of pupils with a particular protected characteristic more advantageously than another, (i.e. by offering a bursary only to Syrian children in the example above), the Act does permit a school to take steps to address the needs of pupils that share a protected characteristic. This could include providing additional education, benefits, or facilities to those pupils, or to provide specific opportunities to a particular disadvantaged group. Whilst this has the effect of treating a person with a protected characteristic more favourably than a pupil that does not have that characteristic, it can be justified under the Act as a ‘positive action’, provided that taking this step is a proportionate means of achieving a legitimate aim. The permitted aim for this purpose must be one of the following:

1. To enable people sharing a particular characteristic to overcome the disadvantage which the school reasonably believes that they suffer (provided that the disadvantage is connected to the protected characteristic); or
2. To meet the different or particular needs of those sharing a particular characteristic; or
3. To reduce underrepresentation or increase participation of people with a protected characteristic in relation to a particular activity.

Positive action is very limited in its scope and will only apply to circumstances that satisfy one of the three above aims. To be justifiable, the bursary must be a proportionate way to meet one of the above aims. In assessing this, it is necessary to contrast the extent of the disadvantage (or the lack of participation) for the children with the protected characteristic, against the potential impact of providing the bursary on pupils that would not be eligible. It is unlikely to be justifiable if there is a less prejudicial way to address the disadvantage.

Risk assessment

Whilst the criteria for the bursary is usually set by the donor, the school will still be at risk of liability for discrimination, particularly as the school will be involved administratively in selecting the pupil/s that will ultimately benefit from the bursary.

It is important that schools consider the impact and purpose of the proposed bursary in some detail before agreeing to the terms. This is echoed in the Equality and Human Rights Commission Technical Guidance for Schools. Schools should prepare a short risk assessment which considers at least the following factors:

• Is there a particular need or disadvantage among this group that needs to be addressed?
• Is there underrepresentation of children from the designated group at the school?
• What evidence is there to support this?
• What outcome is the school hoping to achieve with the bursary?
• Is there another way that the school could seek to address this disadvantage?
• How frequent will the bursary be?
• What mechanism for review of the bursary will there be to ensure it is achieving its intended aim?
• Will there be an adverse impact on children from other groups as a result of this bursary? How will the school address this?

Preparing a written risk assessment will demonstrate the reasons why the bursary was introduced (including any disadvantage identified), and the outcome that the school was hoping to achieve by introducing it. If there is supporting evidence available (for example, admissions data showing the ethnicity of current pupils) the school should consider this and retain a record of relevant information to support  your rationale as the burden would be on the school to prove that its actions were not discriminatory, should a claim ever be brought. Evidence may include admission/application records, enquiries with colleagues at other independent schools, or national statistics.

Is the bursary charitable?

There are a number of exemptions in charity law that allow a charity (including a school) to administer a bursary limited to pupils who share a protected characteristic without acting discriminatorily. The main exemptions are:

1. The Charity Exemption

The charities’ exception allows a charity to limit its benefits (for example, a bursary) to people who share a protected characteristic. Although this may exclude people with other protected characteristics from benefiting, it is permitted under the charity exemption if:

• The charity’s governing document (its objects) only allows people who share a protected characteristic to benefit; AND
• The restriction can be justified either by:
  1. Tackling disadvantage, i.e. the aim of the bursary is to tackle a particular disadvantage faced by pupils who share a protected characteristic; or
  2. Achievement of a legitimate aim, i.e. where a school is seeking to achieve some other legitimate aim in a fair, balanced and reasonable (‘proportionate’) way through the bursary.

Provided strand (a) and (b) are satisfied, the bursary will be permitted under the charity exemption.

The starting point for a school would be to review its objects, and consider whether a bursary of the type proposed would be permitted.

2. The Positive Action Exemption

A charity can treat members of a disadvantaged or underrepresented group more favourably provided that it satisfies the three conditions of positive action from the Act, namely:

• To overcome a disadvantage connected to the protected characteristic; or
• To meet the different or particular needs of those sharing a particular characteristic; or
• To reduce underrepresentation or increase participation of people with a protected characteristic in relation to a particular activity.

Where a school is satisfied that one of the three conditions applies, and it has completed a risk assessment to consider such, it is likely that the positive action exemption can apply, however, whilst positive action is a defence to a claim of discrimination, it is open to interpretation and ultimately it will be for the court to decide whether or not it applies. It is therefore recommended that a school documents within its risk assessment that it has considered the charity law implications of the bursary and to emphasise why it concluded that the bursary would amount to positive action (i.e. which of the 3 criteria it is relying upon).

Charity law is a complicated area, and the consequences of getting things wrong can be significant for the school. Taking advice at the outset is highly recommended.

How can schools monitor the effectiveness of the bursary?

If a school decides to accept a bursary it is very important to keep the bursary under review to ensure that it is still justifiable and lawful. If participation of pupils from these backgrounds were to considerably increase, this may shift the balance from a positive action, into positive discrimination, which would be unlawful. Reviewing the bursary annually is recommended.

The most obvious way of monitoring the effectiveness of a bursary is to consider the cohort of the school, and specifically, the group that the bursary is targeting, to see whether the bursary is having the intended effect. There are however implications for the school in obtaining and processing this data.

Equality Act 2010

Independent schools are not subject to the public sector equality duty and are not required to publish certain equality information under the Equality Act. This means that independent schools cannot rely on this duty to collect, process or publish equality data on prospective or current pupils.

As set out above, it is recommended that schools undertake a risk assessment when considering whether or not to accept a conditional bursary offer. Collecting and processing personal data regarding a person’s protected characteristics, for example data regarding ethnicity and/or nationality to assist in this risk assessment would be lawful under equality law as, without this data it would be difficult to determine underrepresentation or disadvantage of pupils from different groups.

Data Protection Act 2018/ GDPR

Data protection law considers that data which reveals an individual’s racial or ethnic origin, health, or sexual orientation is ‘special category data’ (“SCD”) meaning that it is more sensitive in nature and must be afforded special protection. As a consequence there are a number of ‘hurdles’ each of which must be overcome before data controllers (including schools) can lawfully collect and process SCD. These are:

1. Identifying a lawful basis

There are six lawful bases for processing personal data, two of which are likely to be the most relevant:

• Consent: the pupil (or parent, if a young pupil) has given clear consent for the School to process their personal data for a specific purpose.
• Legitimate interests: the processing is necessary for the School’s legitimate interests or the legitimate interests of a third party, unless there is a good reason to protect the pupil’s personal data which overrides those legitimate interests.

2. Identifying a condition for processing SCD

There are ten conditions for processing SCD, again the two most relevant are listed below:

• Explicit consent: is not defined in the GDPR, but it must be freely given, specific, affirmative (opt-in) and unambiguous, and be able to be withdrawn at any time. There is a clear emphasis under data protection law that explicit consent is the preferred starting point when it comes to SCD.
• Substantial public interest: the data is necessary for the purposes of identifying or keeping under review the existence or absence of equality of opportunity or treatment between racial or ethnic groups with a view to enabling such equality to be promoted or maintained.

3. Obtaining, recording and managing consent

For a school to rely on explicit consent to process SCD it must be prominent, concise and easy to understand (taking into account the age of the pupils). The consent must require an active opt in and should include:

• The School name and contact details
• Why the data is being collected
• What the school will do with the data, and
• The pupil’s right to withdraw consent at any time and how they can do this.

Pupils (and parents) must be offered a genuine choice over whether and how the school will use their SCD. It therefore cannot be a condition of admission to the school that this SCD is provided, or that an expectation is raised (either explicitly or by implication) that it is mandatory during the course of a child’s schooling, or that a failure to provide it will disadvantage them in some way.

Practically speaking, obtaining consent could involve the school issuing an equality form with the above bulleted information, or better still having an online form or portal that allows pupils (and parents) to update their equality details or withdraw/reinstate their consent as and when they wish to do so. If schools wish to obtain SCD from younger pupils that may not be ‘Gillick competent’, the school will need to consider obtaining this consent from their parents. There is no specific age when a child is considered ‘Gillick competent’, but generally speaking, children over 12 may be considered competent enough to understand their rights in respect of their data, and to therefore take ownership for it, but ultimately this is a decision for the School to make.

The SCD can be requested at the registration form or at another stage during the admissions process, as long as it is separate from other information collected during that time. To avoid any perception that this information will be used to decide on whether or not to admit a child, it could instead be requested after a pupil is admitted, i.e. for current pupils. What is crucial is that schools are clear from the outset about its purpose(s) for collecting and processing this SCD. Schools must not be tempted to stray from these purposes, should this data transpire to be useful to the school in other ways.

An alternative approach: anonymised data

If a school is able to collect this data anonymously, without it compromising its usefulness for the bursary risk assessment, then this will be a far more straightforward and less burdensome approach to take forward. Data that cannot genuinely be linked back to a pupil, even in combination with other information held by the school, is not personal data. It therefore does not fall within the scope of data protection law and the school’s obligations in this regard are not applicable. A school would not, for instance, be required to seek or record valid consent.

If a school would like to collect this data during the admissions process, a form could be included in the admissions pack. On return, a member of staff would need to immediately remove that form from all other admission paperwork/forms. It will then need to be filed separately and no other records/paper trail should be kept that may allow the data to be linked to pupils, similar to the handling of equal opportunities forms in a recruitment context.

On the other hand, if the intention is to collect this data from current pupils, and not alongside other information, a school will only need to ensure that the completed form itself cannot be linked to a pupil. For example, information sought on the form should be limited so that answers, when considered together, will not identify a pupil. Ideally multiple choice answers should be provided (this avoids ‘free text’ answers which may lead to pupils (or parents) including personal identifiers).

Any online mechanism you may wish to use must also be set up in a way that does not allow pupil identification. Liaising with the IT department (and software providers, if applicable) will ensure a technical solution is in place to address this.

Summary

When faced with an offer of a conditional bursary, schools must consider the pros and cons of the offer in considerable detail before agreeing to the terms. The conditions attached to a bursary are capable of creating considerable consequences for the school, either legally or reputationally, or both!

It is necessary to take early legal advice when an offer is put forward to ensure that the bursary is both lawful, and is in accordance with the school’s aims and values.