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Written by Tom Freeman on 26 November 2014 in Feature

The charitable status of independent schools is under scrutiny

The Scottish Parliament’s Petitions Committee is considering a petition calling for independent schools to be stripped of their charitable status. Ashley Husband Powton, a postgraduate student at University of Highlands and Islands, gave evidence to the committee via video link from Orkney. “Charitable status and private subsidy for private schools is inappropriate and unjust,” she said, adding: “To have charitable status means all taxpayers including the poorest among them are subsidising the rich and privileged to privately educate their children.”

Private schools serve about four per cent of Scotland’s pupils and, because of their charitable status, do not pay corporation tax and receive 80 per cent discount on their non-domestic rates. Husband Powton argues the falling tax liability represents an effective subsidy. Fettes College in Edinburgh, for example, saw its tax liability in 2011 fall from £209,139 to £41,828. 
Private schools are failing the three basic tests to qualify as a charity, according to Husband Powton: public benefit, the benefit not being outweighed by dis-benefit and access not being unduly restrictive. “On all three of these accounts, private schools would appear to fail,” she said.
Conservative Tory MP Jackson Carlaw defended the system, saying it takes 33,000 pupils out of state education and thereby represents a saving to the public purse, but the SNP’s Angus MacDonald said he found the argument convincing. “I had previously been vehemently opposed to the removal of charitable status, having been lucky enough to have an education at a private school. However, the petitioner did give a good argument when she presented the case to the committee,” he tells Holyrood.
The petition is just the latest in many attempts to overhaul the system over the last few years. The Parliament set up the Office of the Scottish Charity Regulator (OSCR) in 2006, which was tasked with testing charities against a set of criteria. In September 2012 it announced it would review the charity status of 39 fee-charging schools. 
The reviews are now complete, and there have been some high-profile failures, when schools have been told to give out more bursaries or else lose their charitable status. The latest schools to be tested were Christian schools Oakwood in Falkirk and Springvale in Aberdeenshire, both of which form part of a UK-wide network. Both passed. OSCR’s Head of Registration, Martin Tyson, said the regulator’s review was aimed at maintaining public confidence in charitable status. “As with all of the schools we have reviewed, there was an issue of possible undue restriction on gaining access to the benefit provided,” he said, adding:  “We were also aware of issues that related specifically to these two charities. However, having examined carefully all of the evidence available to us, we have decided these two schools do meet the charity test.”
John Edwards, director of the Scottish Council of Independent Schools, says the charity status test is robust and has been “incredibly onerous” but has allowed the sector to concentrate on its sense of purpose and audit its charitable activity. “The Parliament set up OSCR, and it’s very clear if you read how Ms Lamont and Christine Grahame and people challenged my predecessor in committee at the time, [especially] John Home Robertson. They were aiming the test specifically at the independent school sector. Absolutely fair enough, that was a policy objective,” he says.
Edwards says policy and the latest petition have been a proxy for arguing against an independent sector altogether. “In one way, I really admire the petitioner in the way she framed her evidence in the verbal evidence she gave. When pushed, she said, ‘well, this for me is just a first step to getting rid of the schools altogether’. I think in four and a half years, she’s the first person to have had the honesty to say that up front,” he says.
If the policy was to fail all independent schools from the beginning, he argues, it should have been stated up front, but instead schools have come out the other side of a test difficult to pass with more means testing and detailed reports. “Surely rather than discussing where we were in 2006, we should now be discussing what the outcome of that test is, and whether the public policy objective is being met.” 
People’s definitions of charities differ, says Edwards, and OSCR has tried to help define the meaning to be more than just a volunteer-run, cash-dispersing organisation. “The Charity Commission down south have found it a lot harder, because our much more… how shall I put this politely…bullish neighbours in the independent sector down south just said, ‘none of your business, we’ll see you in court’ and effectively struck down the charity test, which is not the approach we would have ever chosen to take up here.”
Many schools in Scotland were charities before the Union, he says. “A lot of schools like Heriot’s would say ‘hang on, we’ve been doing this for 300 years, you don’t tell us what charity is’.”
Both Alex Salmond and his successor as First Minister, Nicola Sturgeon, have in the last week revisited the SNP’s commitment to free equitable education. “Everyone, regardless of background and circumstance, should have the opportunity to fulfil their potential,” Sturgeon told conference in her first speech as party leader. But arguably, a system of exclusive schools which, even after bursary awards, is based on the ability to pay may seem to fly in the face of the oft-lauded ‘Scottish principle’ of equitable education. 
Edwards insists the four and a half per cent of school pupils in the independent sector isn’t throwing the system off. “In the broadest sense, I would contest the idea education is meeting everybody’s needs to an equal level across Scotland,” he says.
Removing charitable status would increase fees and stop schools from being obligated to provide levels of bursaries, Edwards argues, among a sector which is currently “in with the bricks” of Scottish education, with most schools participating actively in the SQA. Parents would inevitably end up looking back at the state sector, he says. “If 11,000 parents in Edinburgh wrote to the council tomorrow and said, ‘in spring 2015, my child is moving back to the state sector, please let me know where they’re going to be educated’, it would just explode. That’s not a threat, it’s just a reality.”
The committee has agreed to call in OSCR for their views on the proposal, and written to the Scottish Government, council body COSLA and teachers’ union the EIS for further guidance. Edwards suggests they should also visit a private school, something Husband Powton admitted she hadn’t done.
Angus MacDonald’s former school closed in 2000, but he says he still sees a place for the independent sector. “I have the benefit of having been at a state school and a private school, and it certainly helped build a confidence up perhaps I wouldn’t have had if I’d stayed at state school. I probably wouldn’t be here,” he says.  

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