Scottish private schools 'saved' as charitable relief extended due to pandemic

But the proposals are now being pushed back to April next year to help the sector cope with the Covid-19 outbreak.

John Edward, director of the Scottish Council of Independent Schools, said some institutions would have closed overnight if the move went ahead as planned.

He said: “It’s been unprecedented [for independent schools], like it’s been unprecedented for everyone else.”

He said schools were already facing a “triple whammy” from the rates change, salary increases resulting from last year’s teacher pay deal, and a rise in employer pension contributions.

He said “nobody in their wildest dreams” could have foreseen the coronavirus crisis on top of this – and called for the tax reprieve to be extended to September 2021.

It was previously estimated private schools will be hit with an estimated £37 million bill over five years as a result of the rates shake-up.

Existing rules mean all independent schools are eligible for 80% mandatory rates relief if they are registered as a charity.

Local authorities then have a discretionary power to “top up” this relief, up to 100%.

But a review of business rates by former RBS chief Ken Barclay in 2017 argued it was “unfair” that private schools benefit from reduced rates while state schools do not.

Independent schools argue the rates paid by the state sector are a “circular paper process” between them and councils with no impact on school budgets.

Nevertheless, measures to strip mainstream private schools of charitable relief were voted through Holyrood earlier this year as part of the Non-Domestic Rates (Scotland) Act.

Private special schools and specialist independent music schools will continue to be eligible for charitable relief under the legislation.

MSPs approved the move despite warnings it could lead to schools having to raise fees, offer fewer bursaries or even close their doors.

Liam Harvey, headmaster at St Mary’s School in Melrose in the Borders, told a Holyrood committee last year that some schools would “most certainly” close as a result of the change.

He added: “I think it’s just another hit that’s going to make things very, very difficult for schools to operate.”

The Scottish Government confirmed the relevant part of the Non-Domestic Rates Act has now een delayed until April 1, 2021, to assist independent schools as they deal with the impact of Covid-19.

Edward said many schools have furloughed employees such as groundskeepers and support staff.

Meanwhile, some boarding pupils from China and elsewhere are stranded thousands of miles from home as a result of the lockdown.

These students are being looked after by schools or guardian families.

By the time the restrictions start to lift, Edward said, some pupils may have been separated from their families for around six months.

Elsewhere, students stuck overseas are having to juggle different time zones to continue their studies.

Edward said the impact on the economy from Covid-19 would inevitably have an effect on the independent sector.

Many schools have reduced fees or moved cash into hardship funds to help families who have experienced a financial hit.

“It really is a case-by-case thing, because apart from anything else schools are not meant in any way to discuss fees with each other,” Edward explained.

He said around two-thirds of the income independent schools generate in fees goes directly into staff salaries, while the fact they operate as charities means cash reserves are tight.

Edward suggested many private schools down south, where there is a huge amount of competition, will not survive the coronavirus crisis.

However, he said the autonomy of private schools has also allowed them to adapt quickly to the coronavirus lockdown.

“Their autonomy means that they can set up a system that works best for them in relation to their specific pupils,” said Edward. “It doesn’t have to be a one-sizefits-all system.”

Scottish Conservative education spokesman Jamie Greene said it is vital ministers support schools during the coronavirus crisis.

He said: “Like all sectors of our economy independent schools have been hit very hard by the lockdown.

“The delay to the removal of charitable relief on business rates incurred by independent schools is therefore welcome.

“However, it remains the case that these schools were already facing considerable challenges from this policy change even before Covid-19.

“In a few cases, it meant uncertainty about whether the school could be financially viable in future years – something which has impact for the state sector as well as for the independent sector.

“It is absolutely vital that the Scottish Government supports all schools when it comes to the damaging effects of Covid19. That includes all the schools in the independent sector.”

Private schools down south still enjoy at least 80% relief on their business rates.

However, in March it was reported the Independent Schools Association had warned its members this could change next year as part of a Government review.

The Scottish Government has announced extra rates reliefs and grants to help businesses through the coronavirus pandemic.

A spokesman 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.”

All non-domestic properties including independent schools will benefit from a 1.6% rates relief in 2020/21 which will be applied automatically by councils.