Scottish schools hit after losing business rate relief

By Stuart Hicks, Director

Now that I have written about Wales recently it’s only fair I switch to our more northerly neighbours.

Obviously we are still talking business rates (when do I touch on anything else!) but this time it is the fall out following the SNP’s decision to slash business rate relief for the private school sector.

Having read the most recent stories it is an issue that is igniting very partisan views north of the border with hundreds of posts following each story. I haven’t seen as many since the Daily Mail ran a sexist front-page piece that concentrated on May and Sturgeon’s shoe choice, rather than Scottish independence.

But whether you are a “tax ‘em ‘til the pips squeak” or screaming “politics of envy” at the computer screen, there is no doubt this latest policy has divided the masses. Around 50 private schools in Scotland are due to lose their 80% charitable relief by 2020 and parents are now facing significant increases in fees come September. When implemented it will raise an estimated £5m in tax revenue pa.

The average private school is expected to push fees up by more than £500 for the next school year, an increase of 3.9 per cent. Analysis compiled by The Times showed that Fettes, the country’s most expensive private school, is putting up its fees by 5.3 per cent. It means parents of a senior day school pupil will pay £28,200 in 2018-19 compared to £26,790 in 2017-18. Some private schools are imposing even bigger increases. St Aloysius’ College in Glasgow is upping fees by 8 per cent to £12,825.

The original announcement came last year from the Scottish Government following a review by former RBS boss Ken Barclay, who recommended the end to charitable tax relief on private schools as well as special schools, other council-run and university arms-length institutions. When unveiled, the policy singled out private schools to lose the 80 per cent relief but spared the other institutions.

John Edward, director of the Scottish Council of Independent Schools said: “Schools are committed to means-tested fee assistance for pupils, often for up to six years at a time, as part of the public benefit test. If, despite that, business rates are to be increased fivefold – the only educational bodies across the UK to experience this – it would be no surprise if medium-term budgets have to reflect that too.”

A spokesman for the Scottish Government said “Scottish ministers recognise that, although small, the independent sector is a well-established part of the Scottish education system that promotes choice for parents. We will continue to engage with the sector as well finalise the detail of our proposals, subject to which we intend to bring forward primary legislation to deliver this change by 2020.”

Engaging with the sector doesn’t seem to have got the schools anywhere thus far so, in other words, “suck it up”. Some 30,000 children are educated in the Scottish Private Schools’ sector, including up to 18 per cent of children in Edinburgh.

This policy has been mooted before for England but didn’t gain any real traction outside of the left-leaning media.