Private schools may lose charity status

DOZENS of independent schools in Scotland could be under threat, as a result of a fresh attempt to scrap the charitable status which many of them need to survive, it emerged yesterday.

SNP, Socialist and some Labour MSPs are preparing to join forces to try to change the law which allows private schools to be registered as charities, giving them tax breaks.

Without the tax breaks, the schools would be forced to put up fees to much higher levels than at present, a change which they claim would threaten their viability.

The Executive is expected to launch its Charity Law Reform Bill in the spring, and critics of the special status granted to private schools will use the opportunity to try to change the law.

The original statute, formulated in the 1600s, defined four purposes of charity, one of which was the provision of education.

This was the basis under which many independent schools were first granted charitable status, but that is now being questioned by an increasing number of MSPs.

Fiona Hyslop, an SNP MSP who is on the education committee, criticised the tax benefits to which independent schools are entitled.

"I don’t think they should have tax relief. There’s no level playing field between the state and independent sectors," she said in an interview with Holyrood magazine.

And she added: "Is the degree of public benefit worth the financial benefits? I don’t think it is."

Private schools have to demonstrate a clear public benefit to qualify for charitable status, something that many MSPs believe they will not be able to prove.

Labour MSP Marlyn Glen said: "These schools will be unable to demonstrate the ‘public benefit’ test to obtain the proposed new status of a Scottish charity."

She believes that the money saved should be spent on schools in the public sector instead.

Fellow Labour MSP Elaine Smith agreed, saying: "It is only fair to expect that any institution benefiting from charitable status demonstrates some benefit to the public.

"The current situation, which sees private schools subsidised by the taxpayer, without any duty being placed on them to provide in any way for the wider community, is unfair and should be reviewed," she added.

The teaching unions are also calling for a change in the law.

Pat O’Donnell, of the NASUWT, said that he had "no difficulty with them losing their charitable status".

"An independent school is not a charity; it’s a school," he added.

Judith Gillespie, of the Scottish Parent Teacher Association, insisted that "private schools exclude people".

She said: "They are making profits. That is not the basis for a charity."

However, the private schools are keen to fight back against the onslaught.

Judith Sischy, of the Scottish Council of Independent Schools, said education is "a social benefit".

"We accept that charity law has to be modernised, but we feel that any public benefit test would still include independent schools," Ms Sischy said.

A Scottish Executive spokeswoman said: "All organisations applying for charitable status will need to prove that they provide public benefit. The new regulator will be required to develop guidance on how this public benefit will be interpreted.

"In the case of independent schools, they will need to ensure that they provide a wider benefit to the community. This could include allowing access to those who are excluded by the fees they charge, such as bursaries and scholarships, or public access to sports facilities."