Charitable status has attracted, and still attracts, a great deal of public scrutiny and rightly so. All of the c.24,000 registered charities in Scotland need to demonstrate that they uphold and extend their charitable purposes. The independent school sector has undergone the most rigorous scrutiny since the Office of the Scottish Charity Regulator (OSCR) started work. The debate in the Scottish Parliament, which led to the 2005 Act created the toughest test of charitable status anywhere in the UK and, in reality, anywhere in the world.

As part of their purpose of the provision of education, Scottish independent schools must and do ensure that public benefit outweighs any private benefit and ensure access to that benefit is not too restrictive. This involves means-tested fee assistance to widen participation in the schools, but also wider work to share expertise, resources, opportunities and facilities both locally and nationally. This duty to others combines with young people across the Scottish sector taking responsibility to work in and with the communities immediately around them as well as further afield.

Benefit to local community

Independent schools regularly provide school facilities such as academic, vocational and sport resources, hosting events, and sharing music and arts provision with local schools and communities and community groups. This includes the sharing of staff subject expertise and teaching facilities.

Volunteering and charity work

For example, at Merchiston Castle School in Edinburgh, there is a real focus on using the school’s cultural, sporting and other facilities for local public benefit to awaken an awareness amongst pupils of the social context of the all-round education being received. Since 2010, Merchiston have raised £10,000 for Place2Be – the equivalent of 1,428 Place2Talk sessions for children who need a safe place to address their worries and anxieties, making a profound difference to vulnerable children. The school commits staff expertise to other educational agencies and schools while facilities are shared on a non-profit basis for community use.

Over 500 Erskine Stewart’s Melville Schools (ESMS) pupils are actively involved in community service within and out with the schools, including the entire sixth form of over 250 students. The school has raised funds for charities like Social Bite, SAMH and RNLI. Over £76,000 was raised for more than 40 charities, including Bloodwise, Rock Trust and Edinburgh Food Bank. In addition, a special one-off event raised over £87,000 which was split equally between My Name’5 Doddie Foundation and the schools’ Access to Excellence charity which helps children benefit from an ESMS education regardless of the financial capabilities of their parents.

Independent schools dedicate more than £30m a year towards means-tested fee awards

In many instances, the schools’ support for charities extends beyond fundraising to incorporate significant community projects. All three schools support the development and management of two schools in Malawi, both through charitable fundraising, working with Open Arms Malawi, and by supplying teaching and pupil support during the summer and autumn breaks. The Mary Erskine School and the ESMS Junior School have been heavily involved in the establishment, through The Chesney Trust, of The Edinburgh Girls’ High School in north-east Malawi.

ESMS has also completed the sixth year of a ground-breaking Partnership Agreement with City of Edinburgh Council, whereby the schools took over the management and maintenance of Arboretum Playing Fields on a 60-year lease, in exchange for the restoration of the previously derelict pavilion and guaranteed continuing access by local clubs and schools. Under the agreement, local schools use Arboretum playing fields for rugby and football fixtures free of charge on a weekly basis.

In both aforementioned schools, as at most Scottish independent schools, pupils will take part in the Duke of Edinburgh Award scheme with a duty of service to communities.

Morrison’s Academy has been at the heart of the local community in Crieff since 1860. Its pupils take part in many community and charity projects, whether it is the pipe band playing at the Remembrance day parade or the switching on of the Christmas lights or the chamber choir singing at a local residential home. The school shares its amenities with various local groups who make use of the music facilities, the climbing wall and Academy Hall.

Morrison’s has active pupil-led charity committees across all levels, proactively raising money for a wide range of local, national and international charities, including the Macmillan Cancer Support Coffee Morning. As well as reactively supporting global causes, most years a group of S6 pupils visit our partner school, Nansato Primary in Malawi.

Pupils fundraise throughout the year to pay the salary of an extra P7 teacher at the school and also fund specific projects, such as building wells and refurbishing classrooms and equipment. Closer to home, many of Morrison’s pupils also volunteer with local youth and sport groups or visit residential care homes in the area and are actively involved with the Crieff Community Garden and also regularly support activities in MacRosty Park.

Support with financing school fees

All independent schools offer financial support to help families wishing to access their education. Independent schools dedicate more than £30m a year towards means-tested fee awards. The level of financial support ranges from providing an entirely free place, where 100% of the fees are met by the school, to awards down to around 20% of the fees.

As not-for-profit organisations, any income generated by independent schools is reinvested back into the school, whether to pay staff salaries, improve facilities or widen access. As the charity regulator’s register shows, all schools operate on very tight margins, with their reserves often consisting predominantly of historic buildings that require considerable upkeep.

The independent sector provides choice, diversity and a commitment to personal excellence – at whatever level. Whatever the political winds of change in the country, it will continue to do so.

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Following a review commissioned by the Scottish Government to enhance and reform our country’s business rates system, one of the main recommendations was to remove mandatory charitable rates relief from Scotland’s independent schools. This is set to cost the sector in the region of £7m a year.

As a result of this review, independent schools will retain their charity status, but will lose out on the principal financial benefit of this status. Following on from the review, there has been a lot of discussion as to why our independent schools hold charitable status in the first place and why they have been able to claim rates relief up until now. Well, here’s why…

Charitable status

In 2005, the devolved government created the Office of Scotland Charity Regulator (OSCR). Its purpose was to assess all of the organisations that, at the time, held charitable status in Scotland because of their commitment to advancing a charitable purpose – in this case, education. The OSCR eventually determined that independent schools should remain as charities, having ensured that their public benefit outweighed the private, and that fees were not too restrictive to entry.

Independent schools are the most examined and scrutinised of all the 24,000 registered charities in Scotland, or their equivalents in England and Wales

The OSCR public benefit test was designed specifically for them and they have spent the best part of over 12 years continually meeting the requirements of that test. As a result of that unique test, independent schools are the most examined and scrutinised of all the 24,000 registered charities in Scotland, or their equivalents in England and Wales. Here’s how…

Provision of fee assistance

As part of their charitable remit, Scotland’s independent schools must allocate a proportion of their fee income to means-tested bursaries, to widen participation in their education.

As a result, since 2005, the provision of means-tested bursaries has tripled, with independent schools dedicating over £31m a year towards bursaries up to 100% for parents who could not otherwise afford to send their child to an independent school. Data collected from our 74 member schools shows that 25% of mainstream independent pupils in Scotland (that’s over 7,000) receive means-tested assistance.

Sharing of facilities

Schools continually open up their facilities to the local community and work in partnership with local authority schools to share staff expertise and facilities for the benefit of pupils in both the independent and state sectors. This includes opening up cricket, hockey, football and rugby pitches to the local area, sharing facilities such as music halls and theatres, and including other pupils in subject teaching, careers events and other opportunities.

Investing back into the community

Contrary to popular belief, these independent schools do not operate as profit-making bodies. In fact, they are legally prohibited from doing so. Money from fee income is either invested directly back into the school (to pay and recruit teachers or to improve and develop facilities, for example) or it goes towards means-tested bursaries and other forms of fee assistance.

The fact that Scotland’s independent schools are registered charities first and foremost benefits our young people and their families, as well as the local community and local authority schools.

At the end of the day, regardless of the implications for independent schools, the fact that they will retain their charitable status but will not be eligible for the same financial relief to continue their work as every other registered charity in Scotland, England or Wales restricts their work and puts them at a competitive disadvantage.

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Since 2005 the Office of the Scottish Charity Regulator (OSCR) has been responsible for deciding what is or is not a Scottish charity through a test designed by, legislated for and voted on in the Scottish parliament. That test makes the specific requirement that restrictions to accessing the charity’s services, such as fees and charges, are not “undue”. All independent schools have had their status tested on the basis of their public benefit over the past 10 years and constitute almost half of all the charities reviewed in Scotland. That charity test is tougher than any equivalent in the world.

The reports on each school’s activities produced by OSCR merit much wider reading. The outcome has been a widening access programme of means-tested fee-assistance that amounts to £29 million each year and a wider programme of community engagement and shared facilities and staff. The figure reaches £45 million when non means-tested assistance is included. At the same time, every cost for the running of independent schools (except those which receive funding for additional support needs or Forces pupils) is met from parental fee income and fundraising – not from the state, local government or any other public purse.

As of 2014-15, more than 600 pupils in Scotland receive 100 percent means-tested financial assistance. Families of those pupils are amongst those most financially disadvantaged in the country. Further means-tested assistance below that percentage, from 95-20 percent, is currently given to more than 2,300 pupils. In addition, a further 4,000 pupils receive non-tested assistance such as scholarships, sibling and staff discounts – all in a sector that is a modest 31,000 pupils in size.

Charitable status also requires schools to provide facilities and services at free or reduced rates. One medium-sized independent school calculated that the value of supervised facilities and coaching or teaching staff provided free was £38,610 per year; another small school provided facilities for free for 426 hours last year. In addition, there is widespread staff participation in curriculum design and examination development, marking and assessment, staff secondments and the hosting of hundreds of student teachers.

Political commentary often focuses on the issue of relief from full non-domestic rates (NDR). In terms of rates relief, independent schools constitute 0.3 percent of registered charities in Scotland awarded rates relief, alongside universities, royal colleges and many new bodies such as local authority arm’s-length services. Paying rates at the level of mandatory relief still demonstrates that 20p/£ is being provided as new to the exchequer from external sources – again from parental fee income – unlike local authorities funded through taxation.

An independent report by BiGGAR Economics revealed that independent schools in Scotland deliver a positive economic impact to the Scottish economy of £445.8 million gross value added (GVA) per year and around 11,200 jobs in operational benefits. This is comparable to the impact of some of Scotland’s top universities. The report also showed that the schools contribute exchequer benefits to the state worth £263 million annually.

Every independent school’s founding philosophy or ethos is based on their charitable purpose – the education of the child – not on regulatory compliance or legal definition. The charity test has been a worthwhile opportunity for schools to audit, reassess, and reorder their role in their communities. Those who hanker after changing that status would only narrow access again, to the detriment of assisted pupils and contributing nothing to the other 95 percent of Scottish schools or to the “advancement of education”.

John Edward is director of the Scottish Council of Independent Schools: www.scis.org.uk    

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