Amendment 73 is about the equality of charities, which Mr Martin Tyson of the Office of the Scottish Charity Regulator raised as an issue when he gave evidence to the committee. He said:
“Our concern is that”
the proposal about section 10 of the bill
“goes to the basis of what the charity law in Scotland says a charity is ... For a long time, the assumption has been that any tax reliefs or rates reliefs apply equally to all charities, across the board. There are not some charities that are more charitable than others.
Our main concern is that we could start getting a blurring around the edges of what a charity is and of what the public ... understand a charity to be.” —[Official Report, Local Government and Communities Committee, 19 June 2019; c 10-11.]
He went on to say that it was not clear why anybody would want to create that ambiguity, which would introduce differentiated treatment and be likely to open up legal challenges.
As members know, section 4 of the Local Government (Financial Provisions etc) (Scotland) Act 1962 provides for
“Reduction and remission of rates payable by charitable and other organisations”.
As it stands, that section does not provide for any differentiation in how charities are treated in terms of their eligibility for reduction or remission of rates. Therefore, without section 10 of the Non-Domestic Rates (Scotland) Bill, charities would continue to be receive equal rates relief treatment. With that in mind, amendment 73 seeks to provide beyond doubt that all charities should be treated equally for rates relief.
Amendments 74, 75 and 78 are to do with rates reliefs for nurseries in independent schools. In combination, the amendments seek to provide that nurseries in independent schools will still be eligible for rates relief, putting them on an equal footing with private nurseries that are not in the independent school sector.
It is wholly anomalous to make legislation that removes charitable relief on business rates for not-for-profit charitable institutions yet allows private profit-making nurseries to continue to enjoy rates relief.
When responding, I ask that the minister explains the logic behind that decision, especially in terms of the pressure that the Scottish Government is under to deliver its 1,140 hours policy, to which independent schools, particularly the larger urban day schools, contribute.
The amendments provide that lands and heritages that are related to the provision of nursery classes in an independent school will be entered separately into the valuation roll and will be eligible for rates relief.
Amendments 76 and 77 are about the provision of education to children with additional support needs in mainstream independent schools. The amendments provide that mainstream independent schools will still be eligible for rates relief, if they deliver education to pupils with additional support needs who have been
“selected for attendance at the school ... by reason of those needs”.
I see no reason why their needs should be classified differently from those of pupils at schools that are currently named as special schools.
Amendment 79 would leave out section 10. The minister is well aware why the independent schools sector is so strongly opposed to section 10; most especially, it does not consider that any comprehensive cost benefit analysis has been carried out. The evidence for that is the weak financial memorandum.
The minister persistently says that she values the high standards of education that is provided by the independent sector, and that it is an important part of Scotland’s education system. Indeed, on the previous occasion when many such issues were considered, during the passage of the Charities and Trustee Investment (Scotland) Act 2005, much more detailed analysis was provided to assess the significant public benefit that is delivered by Scotland’s independent schools, which resulted in unanimous agreement across Parliament. If that support remains, as the minister insists it does, and given that the Scottish Council for Independent Schools states that the independent sector provides £51 million in financial support, it would surely have been appropriate to have carried out an accurate and comprehensive financial assessment.
However, this is about more than that. The proposed policy move has significant implications for the state sector, which should not be forgotten in the financial considerations and, indeed, in relation to the availability of places and teaching resources.