Rates hike for private school nurseries ‘is discrimination’

New regime threatens to cut nursery places
New regime threatens to cut nursery places
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Finance Secretary Derek Mackay has been warned that his plans to increase the business rates paid by private schools could face a legal challenge amid concerns of its impact on nursery provision.

Around 30 fee-paying schools across Scotland provide nursery facilities for a total of around 1,500 children, in partnership with local authorities.

Fee-paying schools fear that the new rates regime will affect their nurseries because they will not be entitled to the same relief as those run privately, in the third sector or by councils.

The Scottish Government has said nurseries should receive 100 per cent business rates relief, from this month on, to help it meet its ambitious childcare target.

Ministers have pledged to expand funded early learning and childcare to 1,140 hours a year by 2020 for all eligible children.

Last night opposition politicians said nurseries run by private schools were being discriminated against because their institutions were about to be hit by a business rates hike.

Mackay intends to end the arrangement whereby private schools – as non-profit charitable institutions – are eligible for 80 per cent business rates relief. Charging them the full amount is expected to raise £5 million.

Conservative Shadow Education Secretary Liz Smith said: “How can it be right that a private, profit-making nursery is liable for 100 per cent rates relief when a nursery in a non-profit-making charitable institution is not?

“This discrimination makes no sense at all, particularly as these nurseries are participating in partnerships with local authorities who 
are trying their level best in very difficult circumstances to expand childcare provision.

“The Scottish Government’s policy is riddled with holes to the extent that I think a legal challenge is highly likely.”

John Edward, director of the Scottish Council of Independent Schools (SCIS), said: “It is quite odd that you create a business rates system that would favour people who would set up a private nursery for their own good over ones that by law aren’t able to run a profit.”

Edward also suggested that Scottish Government policy could result in nurseries run by private schools withdrawing from their partnerships with local authorities.

He said: “The government’s own policy about early-years numbers suggests to schools that independent school nurseries cannot charge for their nursery provision on top of the state amount, despite these nurseries offering longer hours in many cases, higher staff ratios and wider provision of activities – all of which require additional funding.

“If independent school nurseries are forced to withdraw from their local authority partnerships then local authorities are going to lose thousands of places at nurseries that they help to support – a result which benefits no-one and achieves nothing.”

The Scottish Government said independent schools, depending on the circumstances of their property, could “split their estates” to make nurseries eligible for rates relief.