James McEnaney: Why the #SNP16 backing of charitable status for state schools is a mistake

CommonSpace columnist James McEnaney comments on events at the SNP conference, where delegates have backed calls to extend charitable status to state schools

WELL it was close – really, really close – but in the end members at the SNP conference backed motion 19.

Despite strong opposition from many members (including the SNP Youth group), and the revelation that calls to withdraw charitable status from private schools had been blocked by the party’s powerful Standing Orders and Agenda Committee (Soac), Scotland’s governing party now formally supports the extension of charitable status to Scottish state schools.

Supporters of this move claim that it will help to address an obvious injustice which sees elitist, fee-paying schools benefit from tax breaks of around £10m a year. They are wrong, and here’s why.

Read more – "Erse afore elbow"? SNP conference votes for charitable status for state schools

First of all, the taxation burden referred to in the motion is a matter for local authorities, not individual schools, with councils paying business rates on all schools under their control. Charitable status would therefore represent a significant saving for local authorities which could certainly free up more money for education spending. So far so good.

The trouble is that business rates are paid to the Scottish Government which also provides the vast majority of councils’ cash. Charitable status for around 100 private schools costs the Scottish Government about £10m a year, so imagine the figure for 2,500 state schools. If the government could promise not to claw back this money by reducing education funding then that would be one thing, but the money will surely have to come from somewhere.

Furthermore, if this government is indeed willing to finance a significant increase in education spending - such as would be achieved by non-domestic rates exemptions - then why not simply hand over the money right now?

If this government is indeed willing to finance a significant increase in education spending then why not simply hand over the money right now?

Another area where people assume savings could be made is in relation to VAT, with some arguing that charitable status would allow individual schools to reclaim money currently sent to the treasury in London. This is certainly an appealing prospect but, again, it doesn’t quite match up with the reality: a local government source has confirmed that councils already claim back VAT associated with education spending.

So would charitable status be of any benefit to state schools? Maybe - but there are serious pitfalls to be considered.

Charitable status would allow schools to access new sources of funding which, in theory, could mean more investment in education across the country. Once again, however, it’s not that simple.

Under such a system any government would find it easy to ‘pass the buck’ on education spending, with calls for increased public investment potentially dismissed with a wave of a National Lottery funding form.

'Unhappy with your budget for the year? Well that's not our problem. Use that charitable status we gave you and start fundraising.'

This type of system would align with the government’s views on increased school autonomy but it also carries with it a real risk of entrenching, perhaps even increasing, the gap between rich and poor. Schools in predominantly wealthy areas would likely find it much easier to boost their income, with the social and professional capital of well-off, middle class families providing an enormous advantage when it comes to working through funding applications or locating additional sources of revenue.

Charitable status for state schools will clearly cause more problems than it could ever solve. 

Extending charitable status to state schools also risks encouraging a culture of donations and patronage, with wealthy local residents – such as prominent business owners  –  invited to ‘support their local school’. It doesn’t take much of an intellectual leap to see the potential problems with private individuals treating schools as prime advertising opportunities.

And then there are the practical issues, such as the bureaucracy and paperwork involved in establishing and maintaining the legal entities and charitable boards that will be needed for any of this to take place.

So charitable status for state schools will clearly cause more problems than it could ever solve. 

At this stage it is worth considering how this motion (one of 166 to be submitted) even made it into the famously well-protected SNP conference agenda.

One possibility is this move could provide some political cover for the SNP’s more conservative tendencies by effectively killing off the argument around tax breaks for private schools (the real issue at the heart of this debate). Members of the SNP who are opposed to private schools holding charitable status – and there are plenty of them - should be aware that the passage of motion 19 will cement, rather than challenge, that obvious injustice.

Today’s vote looks an awful lot like a major step towards the establishment of Scottish free schools.

Worryingly, is also possible that the extension of charitable status to state schools is linked to the government's plans to markedly reduce local authorities' involvement in education, both through the creation of new 'educational regions' and, more importantly, the intention to bypass councils - to an as yet unspecified degree - when it comes to school funding.

Remember that the government is yet to make (or at least announce) a decision on proposals to turn St Joseph’s primary into a parent-led "state-funded autonomous school" (or, in simpler terms, a free school). It’s also worth noting that Swinney’s own conference motion says that “head teachers, parents and communities should have more responsibility for schools in their areas”.

John Swinney may have (quite rightly) pledged not to pursue the Academy model of school governance seen in England but that does not necessarily preclude the possibility of institutions being effectively run by boards comprised of headteachers, local parents and other ‘stakeholders'.

This, combined with the introduction of the sort of parallel funding structures outlined above, means that today’s vote looks an awful lot like a major step towards the establishment of Scottish free schools.

Picture courtesy of Ryan Stanton

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Comments

Malcolm Kerr

Sat, 10/15/2016 - 22:46

Thanks for this balanced article which explores some of the genuine dilemmas around this issue. Hairsplitting: SOAC doesn't block policy proposals, it blocks *discussion* of policy proposals (two years running, apparently, in this instance). It is as though simply permitting discussion of an issue presumes the outcome of that discussion. Increasingly stage-managed conferences are beginning to alienate SNP members, and will contribute to the Party experiencing the 'effects of political gravity' sooner than we can afford, imho.

MeMalky's picture

MeMalky

Sun, 10/16/2016 - 15:51

Malcolm Kerr offers a kinder appraisal of the article than i ever could, although he doesn't say what makes it 'balanced'.
I can't be sure what is meant by "SNP's conservative tendencies" or of any of the possible outcomes related to the successful passing of this resolution, and neither can the author.
The SNP is a broad church, but its leadership is, I suspect, necessarily cautious in how it approaches introducing fairness, balance and equity into a newly awakened socially democratic Scotland. It would be folly to jeopardise its position as the emerging positive and dominant force in Scottish, and indeed Britain-wide, politics in order to satisfy the impatience of those who want change and who want it yesterday.
Graham Sutherland rightly voiced his frustration in the end at the difficulty faced in getting a resolution pass SOAC which would have seen conference debate the anomaly of charitable status of private schools. He acknowledged that this may have been second best; but, for the moment at least, it was the best we could hope for.
Revolution may yet come, but let's not get oor erses in the way of oor elbows.

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