HomeOpinion“Here is the case against removing tax relief from Scottish private schools”

“Here is the case against removing tax relief from Scottish private schools”

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John Edward

“I was born in London, and went to school in Scotland – I used to be dead tired when I got home at night.”  Sir Norman Wisdom

Amid the other political debate that blankets the country, the recent arguments about the independent sector have been as intense as ever.  They have also been localised, mainly to one political party and, in truth, to one quarter of the United Kingdom – namely England.  The original Labour Conference motion that called for the integration/nationalisation of the sector, or removal of charitable status, higher education quotas, or the redistribution of charitable assets was in a policy area wholly devolved in the UK.

It is easy to forget, as the UK continues to fret about its place in the world outside, how far from unified many areas of domestic public policy are. 

There is no such reality as “British education”.  In independent education alone, almost no competent body is shared across any two borders.[1]  When the Northern Ireland Assembly last sat, there were four different education ministers in the UK in four different party governments.  Indeed, in the Welsh government, a Liberal Democrat education minister sits in a predominantly Labour administration.

In Scotland, for example, education has been fully devolved since it was first consolidated in the nineteenth century in a Scottish Education Department.  The creation of the Scottish Parliament simply added Scottish parliamentary scrutiny and oversight, and the overdue reform of many aspects of regulation and legislation.  As such, it is striking how little effort has been made across education to look at best practice around the Kingdom rather than rushing for “oven ready” new recipes.

In Scotland there are no grammar schools (except in name only), no free schools, no academies, no state boarding – so there is no middle ground between the comprehensive and independent communities.  Equally there are no state school boards, that might allow for the sharing of governance and experience across education. 

By contrast, Scottish independent schools do share the same schools and care inspectorates as everyone else, and make disproportionate contributions to the work of the Scottish Qualifications Authority.  Charity law, and the charity regulator (OSCR), are discrete and even a cursory glance at the sector in Scotland, and developments since devolution would show anyone how different the debate on charitable status and public benefit can be.

In 2005, the Scottish Parliament passed unanimously what remains a unique, formal test of public benefit aimed at independent schools.[2]  Schools’ charitable status, established by law, was to be maintained only on completion of a school-specific test of two parts.  One part looked at whether accessing the charitable purpose – education in this case – was made unduly restrictive by fees.  The required response to that was the confirmation of means-tested fee assistance as the default position for schools in Scotland. 

The other part looked at whether public benefit – in return for rates relief – exceeded the private benefit that flowed to pupils and families through their education.  This required the auditing and modernising of all community and national relationships.  This included the offer of specific subject teaching; extra-curricular provision – arts, drama, sport; shared coaching and use of facilities; open careers or music events; and the extensive use of facilities by community teams and groups at minimal or no cost.[3]

All of this was designed by a Labour-Liberal Democrat coalition government.  That test has seen means-tested widening access become the default for schools at the expensive of traditional skill-based scholarships that took little or no account of ability to pay. 

The overall amount offered in means-tested fee assistance has tripled since to over £30 million per year – all derived from parental fee income and close in per capita terms to the publicly-funded fee assistance offered in higher education in Scotland.  This widening of access has happened while schools continue to encourage high attainment and positive leaver destinations from pupils of all interests and abilities.

Nevertheless, the Scottish Parliament has confirmed the removal of the non-domestic rates relief from independent schools exclusively – removing the financial space that allows schools to offer at least five times more in public benefit than they receive.[4] 

The reasoning for separating 50 bodies out from the other 24,000 on the charity register has been hotly debated; while few have instead seriously questioned why state schools are “charged” a needless, nominal rateable value at all.  Schools rightly question why no account has been made of the effect that any resulting fee rises will have on pupils returning to add pressure to the state sector, including those on 60-80% bursaries.

One can assume that OSCR, the Registrar of Independent Schools and HMRC would have something to say about any government seeking to further direct or control the use of charitable assets, including specific legacies, of any school. 

Further to all of this, those committed to the fully devolved Scottish education system might question any proposals to introduce VAT on all UK school fees, to fund free school meals in England, ignoring the existence of free school meals in Scotland – already paid for by the Scottish tax-payer. 

Rather than discussing the possible dismantling of a historic and complementary system, described by Scottish ministers as part of the “rich tapestry of Scottish education”, policy-makers might look at what works, what is achievable, and what makes a genuine difference to young people’s lives.

John Edward is the director of the Scottish Council of Independent Schools (SCIS), a role he has held since April 2010. He had previously been Head of the European Parliament’s Office in Scotland for six years.  Prior to that he worked in Brussels, as EU Policy Manager for Scotland Europa in Brussels, and for the European Policy Centre. 

[1] https://www.dropbox.com/s/e8lfpdhoilfdq7y/INDEPENDENT%20SCHOOL%20REPRESENTATION%20IN%20A%20DEVOLVED%20UK%20-%20table%202019.pdf?dl=0

[2] https://www.parliament.scot/parliamentarybusiness/Bills/25928.aspx

[3] https://www.oscr.org.uk/about-oscr/reviews-of-charitable-status/#review-of-schools

[4] https://www.parliament.scot/parliamentarybusiness/Bills/111337.aspx

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