Independent schools to lose rates relief?

(This article first appeared in the Winter 2017/18 edition of our Connect client newsletter.)

The Scottish Budget announced measures to scrap the business rates relief that independent schools receive as charities.

This was the result of the Barclay Review, which thought it “unfair” that independent schools receive rates relief, whereas state schools do not.

However, critics have pointed out that a state school pays its rates to the council, which funds the school, meaning there is no actual loss of funds. Other studies estimate that the fee increases that independent schools will need to make to afford the rates increase will drive pupils to the state system, with one estimate suggesting this will cost the government £5m more than the rates increase will generate. The Scottish Council of Independent Schools said that this move may also cut the amount of support independent schools can provide in the form of bursaries and grants.

The Budget is in draft form and will be voted upon in February.