Private schools 'could close' over plans to scrap charitable relief

A number of independent schools could be at risk of closure if plans to scrap their ability to claim charitable relief from business rates are approved, it has been claimed.
Hutchesons' Grammar SchoolHutchesons' Grammar School
Hutchesons' Grammar School

Legislation is currently going through the Scottish Parliament that would make changes to the collection of non-domestic rates, known as business rates, in Scotland.

The plans include a proposal to drop charitable rate relief for mainstream independent schools.

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Fears have been raised by some within the sector that the change could lead to schools having to raise fees, offer fewer bursaries or even being forced to close.

MSPs on the Scottish Parliament's Local Government and Communities Committee, which is scrutinising the proposals made within the Non-Domestic Rates Bill, met representatives from independent schools on Wednesday.

Tory MSP Graham Simpson asked representatives whether the move could cause any schools to "go under".

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Liam Harvey, headmaster at St Mary's School in Melrose, Borders, said: "Most certainly.

"With the employers' contributions increasing on us, too, that's added to our budgets for next year, that's going to be a dent in our budgets in due course.

"I think it's just another hit that's going to make things very, very difficult for schools to operate."

He added: "We as a business have operated quite efficiently over the last three or four years at St Mary's.

"We offer 15% of our income to bursaries so we open our doors to as many people as we can financially accommodate.

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"We have made decent surplus - and I think it's important that this committee knows that - we've made a decent surplus over the last three years but our intention is to reinvest that into the community at St Mary's."

Mr Harvey outlined the schools' plans for a new sports facility, which would be available for all local authority schools to use and would include offering free expert coaching by staff on Friday afternoons for pupils from other schools.

He added: "All of a sudden, our plans have been put on hold because we are now staring at an increased bill that is coming down the line at us and so it's stifling our ability to widen our scope to welcome the wider community into St Mary's."

Colin Gambles, rector of Hutchesons' Grammar School in Glasgow, said calculations suggest the change could increase its costs by an estimated £326,000 per year.

He said some parents at the school were reaching a tipping point for what they could continue to afford to pay.

Mr Gambles said: "We faced challenges from the teachers' pension and also from the teachers' pay review, that we are obviously aligned to.

"All of these things are making the fees, it's £12,000 a year to send a pupil to our school, which is obviously a huge amount out of post-tax income, but our parents value education that highly that they wish to spend that money but the tipping point is coming."

"There are some parents who, it seems to be, that they are truly affluent but there are a great many who are really struggling to pay those fees.

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"And we know that because we've got a list of pupils who we can't give bursaries support to, every year, that we offer places to and they cannot come to us."

A Scottish Government spokeswoman said: "We recognise the independent sector is a well-established part of the Scottish education system that promotes choice for parents.

"The independent Barclay Review recommended that reduced or zero-rate bills relief for independent schools across Scotland while council run schools pay rates was unfair and should be removed - and we accepted that.

"Ministers will continue to listen to the views of the independent education sector as the Non-Domestic Rates (Scotland) Bill goes through usual parliamentary processes.

"We look forward to the Local Government and Communities Committee's stage one report, which will be published in due course."