Business rates rise for private schools put on hold

Scottish independent schools were due to start paying business rates in full last month, but have been given a reprieve

Emma Seith

Coronavirus: A planned business rates rise for Scotland's private schools has been put on hold

In a bid to help independent schools cope with the impact of the coronavirus pandemic, the Scottish government has delayed the controversial rise in business rates due to be introduced for the sector last month.

Independent schools have up to this point paid 20 per cent of business rates, as a result of their charitable status. However, thanks to the Barclay Review of Business Rates, published in 2017, which said it was “unfair” that state schools paid business rates in full and independent schools did not, they were due to start paying the non-domestic rates in full in April.

Now, though, the introduction of that additional cost for the sector – which has been estimated at £7 million – has been delayed until April 2021.

Background: Scottish private schools and rates relief

Related: Schools 'should be exempt from £163m business rates bill'

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Opinion for: 'It's only right to stop private school tax breaks'

England: Hundreds of private schools 'bust by Christmas'

A Scottish government spokesperson said: “Having considered the financial impact of Covid-19 and school closures on the independent schools’ sector in Scotland, we have decided to delay commencement of section 17 of the Non-Domestic Rates (Scotland) Act 2020 until 1 April 2021.

“This decision was taken to assist mainstream independent schools as they – like all businesses in Scotland – deal with the impacts of Covid-19.”

Scottish private schools face paying more in business rates

The sector has welcomed the reprieve, although the Scottish Council of Independent Schools (Scis) maintained that because schools in the sector had passed the charities test, the rise should never be introduced.

Scis director John Edward said the coronavirus lockdown was “a massive struggle” financially for private schools and that some were taking advantage of government support. He said some schools had furloughed grounds staff, reception staff and sports staff because they were unable to work but that most teachers had not been effected because they were needed to deliver online learning.

In England, there have been reports that hundreds of private schools will be "bust by Christmas" because parents have stopped paying fees.

Mr Edward said he had not heard of specific schools facing closure in Scotland, although he said some would be “down to the bottom line and beyond”.

“During the Barclay review a couple of schools were saying they would really struggle with an 80 per cent increase in rates. If that was the case then it’s probably the case they are under real pressure now but so far the focus for schools has been on getting to the end of the summer term and seeing if they can keep going. I’ve not heard of specific cases of schools being faced with closure,” he said.

Melvyn Roffe, principal of George Watson’s College in Edinburgh, said that “overwhelmingly” parents had understood the situation and continued to pay fees. He said that boarding schools were offering discounts because they were no longer running boarding houses but there were fewer savings to be made for big day schools like Watson’s.

“We have said we will review cost savings and we will see what we can prudently return to parents,” he said.

Mr Roffe is keen to make sure that current pupils did not have to leave the school because of the crisis, and a fundraising campaign is underway.

The challenge for independent schools was likely to come over the next two or three years, he added, as parents who would have expected to send their children to schools in the sector became less confident that they would be able to afford the fees.

He added: “The financial crash of 2008 actually wasn’t too significant over the following two- or three-year period but there’s no textbook for this. We are just really trying to be as helpful as we can to parents.”

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Emma Seith

Emma Seith

Emma Seith is a reporter for TES Scotland

Find me on Twitter @Emma_Seith

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