‘Strip private schools of charitable status’ says MSP Neil Findlay

By Andrew Whitaker
Published on 15/09/2012 00:00

PRIVATE schools should be stripped of their charitable status, a Labour education spokesman has suggested, as he claimed they are “taking advantage”to gain “significant financial benefits” over the state sector.

Scottish Labour’s shadow learning minister Neil Findlay said that “it was very questionable” what charitable role private schools played, saying he would back scrapping tax exemptions for the institutions if this could be proved.

Mr Findlay’s intervention came after an investigation by the Office of the Scottish Charity Regulator (OSCR) into the charitable status of private education cleared the first 13 schools and allowed them to remain exempt from tax.

However, Mr Findlay, the deputy convener of Holyrood’s education committee, said it was “very strange” cash-strapped state schools were forced to pay rates and VAT, while the taxes are waived for private schools.

The Labour MSP went on to suggest that private schools were claiming to be charities to avoid being hit with the taxes and he said that the authorities should now “halt” the ­exemptions.

Mr Findlay made the comments as he called for the Scottish Parliament to be handed full income tax powers to ­increase taxes on top earners to fund free public services, saying that he backed the “redistribution” of wealth.

The Lothian MSP, a former teacher, said there was also a “general concern” among Scots about private schools continuing to receive charitable ­status.

The Scottish Council for Independent Schools (SCIS) insisted the sector fulfilled its charitable role by encouraging access to education and claimed that institutions in Scotland faced stricter regulations on proving a public benefit than those in England.

Mr Findlay, when asked by The Scotsman whether he would support scrapping the charitable status for private schools confirmed “yes”.

He added: “It’s very questionable what charitable role is played by private schools. They have to pass the test of being charities, which gives them benefits such as rates relief and tax benefit.

“If an organisation is not playing a charitable role then we have to halt that. There is a general concern that private schools are using the charity regulations to gain significant financial ­advantages. They are registered as charities to take advantage of this status.”

He added: “There are many advantages from this status and it seems strange that state schools such as Whitburn Academy in my constituency have to pay rates, but that private schools such as Fettes don’t.”

Meanwhile, a further 40 private schools are to have their charitable status investigated by OSCR during the next two years.

The SCIS, which represents 75 of Scotland’s 100 private schools, claimed that its members were subjected to tight regulations.

SCIS director John Edward said: “Independent schools are charities because of the education they provide, one of the key charitable purposes recognised in Scotland.

“The test of charitable status requires them to demonstrate that they encourage access by providing, among other things, substantial means-tested assistance – something many of them have been doing for decades.

“The public-benefit test is higher in Scotland than elsewhere in the UK, precisely because MSPs insisted on a tougher test of public benefit as the legislation passed through the Scottish Parliament.”

Conservative MSP Alex Johnstone also defended charitable status for private schools as he claimed that parents would face higher fees if the tax advantages were scrapped.

Mr Johnstone said: “The parents of children at private schools are already paying tax towards state schools, as well as fees for private education.

“If the charitable status of private schools were to be ended, then parents would effectively be paying three times because they would be hit with large increase in fees due to the extra costs that would be imposed on schools.”

Meanwhile, Mr Findlay called for the Scottish Parliament to be handed full income tax powers to allow MSPs to increase taxes on the wealthy.

He said: “If we don’t have public services funded by taxation than we would start to see the break up of society.

“Public services are a civilising force and powers over personal taxation to generate finance for these services would be a positive move.

“I’m not afraid to say that I believe in redistribution.”