SNP’s bid to generate £5m that sparked major political row

Fettes in Edinburgh is among the private schools in Scotland that benefit from business rates relief because of their charitable status.  Picture: Ian Rutherford.
Fettes in Edinburgh is among the private schools in Scotland that benefit from business rates relief because of their charitable status. Picture: Ian Rutherford.
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SNP finance minister Derek Mackay announced in his Budget in December that Scotland’s independent schools would no longer receive business rates relief.

Private schools benefit from the relief as a result of their charitable status, for which they have to show the public benefits from their work and that access to their services is not unduly restrictive.

Last year a government review - the Barclay Report on Business Rates - said private school rates relief was unfair on state schools and that scrapping it would generate £5 million annually.

READ MORE: Derek Mackay accused of passing the buck on private school tax changes

But experts have warned the move risks making the private sector more elitist because schools will have to cover the cost of their higher tax bills by increasing fees, reducing bursaries for pupils from disadvantaged backgrounds and selling off assets such as playing fields.

Rod Grant, headteacher at Clifton Hall School outside Edinburgh, said it will cost the taxpayer £10.8m a year to educate in the state sector the additional children whose parents cannot afford fee increases in the private sector.

He said around 1,800 pupils would return to the state sector “almost overnight”, with state education costing the Scottish Government £6,000 per child.

In an article on his school’s Facebook page, Mr Grant said scrapping the rates relief was a purely political decision, driven by a “narrow-minded” desire to “kick” private schools.

Cameron Wyllie, principal of George Heriot’s in Edinburgh, said that in addition to fewer bursaries and children from less well-off backgrounds having to go through a taxpayer-funded education, some smaller schools could be forced to close.

The change is due to come into effect in 2020.