Once the bastion of the private school system in Scotland, the independent sector in Edinburgh is facing a stark future, experts have warned.

An economic impact report concludes that the financial security of many schools in the capital is under threat as a result of the partial removal of business rates relief, rising teachers' pay and spiralling pensions contributions.

The report, by Edinburgh-based independent economic consultancy BiGGAR Economics, says the financial implications are severe with a £9 million increase in costs for all schools, which it calculates would result in a hike in fees of seven per cent - or £900 per pupil on average.

It states: "This is a significant sum of money for parents, and will be compounded for the parents who have more than one child studying at one of the independent schools.

"Based on discussions with the Edinburgh independent schools it is clear that many parents would not be able to bear this financial burden. For around 15 per cent of parents this would be completely unaffordable, leading to these pupils dropping out of independent schools.

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"This equates to an estimated 1,750 pupils, which would be equivalent to a school the size of George Heriot's closing. If this scenario were to occur it was estimated that income across the Edinburgh independent schools would fall from £143.4m currently to £130.4m."

The report concludes: "Independent schools in Edinburgh are facing a number of external pressures which challenge the financial sustainability of the sector."

Edinburgh private schools are unique in Scotland in that around 25 per cent of pupils from the city are educated in the sector compared to a Scotland-wide average of just four per cent.

Some of Scotland's most famous private schools are located in the city including Fettes, Stewart's Melville, George Watson's, George Heriot's and the Edinburgh Academy.

However, fees can be significant with Fettes charging £28,000 a year for a senior school day pupil. A more typical sum is the £12,555 charged by George Watson's College.

John Edward, director of the Scottish Council of Independent Schools, which commissioned the economic impact study, said schools across the country were facing a similar position.

He said: "There is a double whammy of pensions contributions and business rates as well as inflationary increases in teachers' pay and that impacts on all schools across the country.

"The money has to come from somewhere and that will include increases in fees, reducing the assets of the schools such as staff and facilities, which they don't want to do, or it comes down to charging commercial rates for facilities and no-one wants to do that either."

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Mr Edward also highlighted the report's concerns over the knock-on impact on an exodus from private schools on the state sector both in terms of additional pupil numbers and the availability of wider community access to facilities.

The report said: "These 1,750 pupils ... would need to be accommodated in state school education. An additional £6.9m in public sector funding would be required to educate them in schools run by Edinburgh City Council, and £2.1m in local authorities outside of Edinburgh.

"Lower pupil numbers would mean that the economic contribution of the independent schools in Edinburgh would fall by £11.3m and 270 jobs.

"The Edinburgh independent schools are therefore facing a number of external pressures which challenge their financial sustainability, the economic and fiscal contribution they make and their wider community engagement activities."

From 2020/21 independent schools could lose the partial business rates relief that they currently receive following a recommendation of the Barclay Review, set up by the Scottish Government.

In addition, employer contributions to the teachers' pensions scheme are expected to increase across the sector from 17.2 per cent to 22.4 per cent from April 2019. The lifting of the public sector pay cap is also likely to have a substantial upward impact on teacher pay in Scotland with a current deal of at least nine per cent currently being considered by teachers.