Rates reform could mean private schools ‘go under’

MSPs hear private school parents are reaching ‘the tipping point’ in terms of what they can afford to pay

Tes Reporter

Rates relief reform could lead private schools to close

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.

Legislation is currently going through the Scottish Parliament that would lead to 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, which the sector says will cost it in the region of £7 million a year.

Background: Private schools should pay business rates, says Scottish government review

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

Related: Private special schools ‘threatened’ by business rates proposal

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

Today, 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.

'A dent in our budgets'

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

Liam Harvey, headmaster at St Mary's School in Melrose, in the 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 past three or four years at St Mary's.

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

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

'Plans on hold'

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 suggested the change could increase the school's costs by an estimated £326,000 per year.

He said some parents were reaching a “tipping point” for what they could continue to afford to pay. And he added that the teachers’ pension and pay awards were also putting pressure on schools and pushing up fees, which at his own school amounted to £12,000 a year.

Mr Gambles said: "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."

Register to continue reading for free

It only takes a moment and you'll get access to more news, plus courses, jobs and teaching resources tailored to you

Tes Reporter

Latest stories