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

13th October 2017 at 00:02
A Tes Scotland investigation reveals schools pay £163 million a year in rates
‘Inequality’ cited between state schools, independent schools and nurseries

Teaching unions are calling for state schools to stop being charged business rates, as a Tes Scotland investigation reveals that primaries, secondaries and special schools will collectively pay more than £160 million in them this year.

The Scottish Secondary Teachers’ Association (SSTA) said that all public money allocated for education should be spent on education and not “top sliced”.

Meanwhile, the EIS teaching union said that it seemed “impossible to justify” charging state schools business rates in full while fee-paying independent schools benefited from rates relief because of their charitable status.

Business rates – which are standardised across Scotland – are the charges paid by non-domestic properties including shops and offices for public services such as education, waste management and roads. They are collected by councils and handed back to the government, which redistributes them.

Business rates 'inequality'

At the moment, independent schools pay up to a maximum of 20 per cent of their business rate bill because of their charitable status. But a government-commissioned report on non-domestic business rates by the Barclay review group, published in August, called for this “inequality” between state and independent schools to end “by removing eligibility for charity relief from all independent schools”. It estimated the move could bring in an extra £5 million in rates from independent schools

Independent schools argue there is no inequality and that, while they put new money into the system, the rates paid by state schools are simply “a circular paper process between them and authorities” that has no impact on school budgets.

However it has now been suggested the apparent disparity between the two sectors could be addressed another way – by waiving the charges for state schools.

Seamus Searson, general secretary of the Scottish Secondary Teachers’ Association, said: “Local authority schools should be exempt from business rates. As a public service, they should be protected. All public money allocated to education should actually be spent on education and not top sliced.

“Parents are given an overall figure of monies spent on education by governments but they never give the net figure.”

An EIS spokesperson said: “The EIS has long held the view that the fact that independent schools enjoy charitable status while state schools do not is inequitable, and in need of review. The fact that state schools, which provide educational opportunities to young people of all backgrounds, pay higher rates than fee-paying schools is something that seems impossible to justify.”

Implementing recommendations

The Tes Scotland investigation uncovered that one school received a business rates bill for more than half a million this year – Fife’s Levenmouth Academy, which is one of the largest schools in the country, paid £627,200 in rates.

The council where schools paid the most in business rates was South Lanarkshire Council. It collected close to £14 million via the charges (see box, above right).

Finance secretary Derek Mackay confirmed last month that he would implement the vast majority of recommendations in the Barclay review – including making nurseries fully exempt from business rates. However, a decision on whether charity relief for independent schools will be removed has yet to be made. A Scottish government spokesperson said that the government would “engage further on the recommendation” and “confirm the outcome later this year”.

This is an edited version of an article in the 18 August edition of Tes Scotland. Subscribers can read the full article here. To subscribe, click here. This week's Tes magazine is available at all good newsagents. To download the digital edition, Android users can click here and iOS users can click here.

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