Brian Monteith: Schools policy dead end for Labour

Kezia Dugdale with pupils from James Gillespies and Boroughmuir high schools at a referendum debate in Edinburgh. Picure: Malcolm McCurrach

How can the Labour Party seek to regain voters that have departed to support the SNP? Leadership contender Kezia Dugdale believes her party has to take a left turn by attacking independent schools and raising taxes for the highest earners, but she will find it is a dead end.

The policies may appeal to the guttural instincts of some envious electors who believe in levelling down, but they will achieve two things; making independent schools even more exclusive and successful; and helping to drive members of our entrepreneurial class out of Scotland. Add to these undesirable outcomes, which are contrary to the goals used to justify the policies, there is also the reasonable possibility that the SNP could adopt the same ideas itself and Labour would then be no further forward, but Scotland would certainly be all the poorer – both financially and educationally.

Dugdale’s gripe – and it is by no means unique to her – is that due to their charitable status independent schools can receive an 80 per cent reduction on the business rates levied upon their properties, saving them an estimated £10 million across Scotland. This needs to be seen against the £250m contribution to tax revenues they are believed to make to the exchequer. Dugdale believes independent schools should lose that tax benefit and proceeds from higher taxes should be directed at helping failing state schools throughout the country, but it is not that simple.

Firstly, it would mean increased costs to the independent schools that would be passed on in higher school fees. If that were to result in the sector contracting (no doubt bringing joy to some) tax revenues could fall below the £250m currently received. The state would not have gained £10m but have lost out.

Secondly, if the fees were to become too high for some parents they would have no alternative but to send their children to the state sector, placing a further burden upon the costs and resources of our already over-stretched local authorities. Some 21 per cent of school pupils in Edinburgh go to independent schools, if just a quarter of that number were to switch to state schools Edinburgh City Council would not have the places for them – nor the funds to build new schools to accommodate them. The policy would cost the state more money it does not have.

The concern about the charitable discount on business rates to schools is misplaced. It is a typical straw man that politicians on the left love to beat up when they have run out of ideas and cannot face the fact their policies – especially on education – are being seen to fail. The answer is simple, give state schools the same tax break by constructing regulations for them to receive the same 80 percent reduction in rates. It is not beyond the wit of man and it will not mean a loss of revenue to the state because the rates issue is a mirage, a financial merry-go-round. State schools are given state money they hand back when they pay the state tax.

In the past, when state schools were not asked to pay rates, they were not given the money. The change in procedure of state schools paying rates began when the public sector followed new accounting practices to create greater transparency of comparative costs with the private sector. While, as charities, independent schools already received a tax break, the fact state schools suddenly had to pay rates did not mean they faced a new unfunded burden. They were not put at any disadvantage because the money was provided for them to pay the rates.

Of course, if state schools received the same 80 per cent discount they would also experience a commensurate reduction in their funding as the state would not give them the money for a tax liability that no longer existed – but at least all schools be they independent or state-run would be on a level playing field.

The reason Scottish education is failing both by its own standards and in comparison to the rest of the UK has nothing to do with money or that the independent sector exists. Since 1999, when education became the responsibility of the Scottish Parliament, spending on the state sector has increased by 32 per cent in real terms – and yet attainment figures have been overtaken by English schools that spend less per pupil and Scottish pupils’ literacy and numeracy figures have become a national scandal.

After more than 50 years of comprehensive education, the system is failing the most disadvantaged while the relatively well off can choose their school by house purchase – with only a small percentage using independent schools.

Suggesting the charitable status tax break is why independent schools generally perform better is a deflection from the real reason. The clue is in the description “independent” school.

It is no coincidence that in England, where state schools have been given greater independence and flexibility from local authorities, have made great strides across many measures of attainment. Likewise they have been able to tap into private sector and charitable trust funding – but the key is not that they can raise funds, but they can decide how best to spend them. Were Scottish state schools allowed greater independence and be able to access private sector and more charitable trust funds too, they could make decisions suited to their pupils and communities.

Likewise, making the small number of people paid over £150,000 a year liable for a 50p tax rate will only make some relocate their domicile to England or be paid more to compensate them. The additional tax revenues such an avaricious tax hike would bring would make little difference to the teaching standards in the poorest performing schools. It might even lead to a fall in revenues due to entrepreneurial flight.

Kezia Dugdale’s proposals have no logic and do not add up; she had better go back to school, preferably an independent one.