Is it justifiable that public schools have charitable status leading to massive tax savings, but state schools don't?

[motherogod]

Many posters here have defended private education in terms of parental choice - fine - but I'd like to know how it can be justified that public schools have charitable status, particularly as half of them then have an 80% deduction on the rates they pay, whereas schools run by councils have to pay business rates. Academies, foundation schools and voluntary aided schools also receive an 80% reduction.

This is not an AIBU.

Schools receive funding for their rates as part of their income from either local or EFA.

Do you actually have knowledge about how schools are funded?

Well, what about the fact that some people pay school fees for 15 years, while also paying tax towards state schools, but have never used them?

The state system would be swamped if all the private school children had to be educated in it too.

And lots of private schools are barely breaking even.

To maintain their charitable status they also have to give back to their local community.

Many schools, including my own old school which is over 350 years old, were set up as charitable institutions to educate the less well-off.
I assume this "tradition" continues today.

Yes thank you, I've a fair sense of how the schools are funded, and I'm aware of arguments against charitable status but don't find many compelling arguments for it. Here's an example of arguments against - inews.co.uk/news/education/calls-to-change-etons-charity-80-tax-break-as-state-schools-suffer-depths-of-austerity-285190

To maintain their charitable status they also have to give back to their local community
In varying amount.
For example, I'm not convinced that 'we will host sporting fixtures for state students in leagues where our students are playing' really constitutes benefiting the community, and often the bursary amounts are so small that they're unlikely to be any genuine help for low income families.

Some schools genuinely do the charitable thing well, but the ones I've seen seem to tick the box and claim the tax exemption.

Some provide a good charitable benefit in terms of significant numbers of bursaries and scholarships, support to local state schools with training and equipment loans, shared use of their facilities with state schools and the local community, summer schools for local gifted and talented pupils, training and mentoring programs to help state school pupils access top universities. I know of one private school local to us that does all this and more with minimal fuss and fanfare at no cost to the schools and children that they are helping (my state school children have benefited from it). I have no problem with their charitable status as I feel that they give back a huge amount. There are other private schools local to us that do pretty much nothing - one example has a token scholarship for a child for a low income family but they keep quiet about it and haven’t awarded it in the last 6 years. Those schools are not deserving of their charitable status.

Local prep school has the local state primaries in to use their pool, that’s where all local kids get their school swimming lessons. That’s giving back to the community. It’s great.

I don't think the arguments so far justify the charitable status, i.e.:
.

1. Paying school fees but taxes going towards state schools - there are tax loopholes that can be used to offset some of the costs of fees eg themoneypanel.co.uk/8-how-to-reduce-the-costs-of-paying-for-private-school-fees/
2. Children not being educated by the state as they're in private schools. This hardly makes a private school a charity.

a) not all private schools are charities

b) the charitable tax break is worth on average about £200 per pupil per year - not as much as you’d think

c) ending charitable status means winding up the charity. Schools would close. Is that what you’re really calling for?

I've read the article. No new news there. Most parents pay for fees from income, which gives no tax relief.

Why are you asking about charitable status? Is this fodder for an article about the A level debacle and private vs state schools?

Many maintained school are legally charities and also have rates relief.

Ditto hospitals.

The answer might be to exempt all maintained schools, rather than just come of them.

Because you can't start treating some charities differently to others, and if you remove the provision of education as a charitable aim, or prevent charities charging fees for service, the potential for unintended affects across the charitable sector will be enormous

Does the schools funding formula take into any account a school's liability for rates? If so, that will need to be revalorised too.

Many state schools are also charities. You need to define state school more precisely if you’re seeking to debate this.

Will you also be seeking to remove charitable status from other educational,
institutions?

@iVampire

a) not all private schools are charities

b) the charitable tax break is worth on average about £200 per pupil per year - not as much as you’d think

c) ending charitable status means winding up the charity. Schools would close. Is that what you’re really calling for?

a)More than 50% have charitable status, enough I think to raise the question of why it's justifiable

b) Private schools save more than £100 million per year (forecast 2020-2022) due to their rates reduction. Many of them are extremely wealthy - if you look at the charity commission records, Eton for example had £8.5million in donations, more than £50million in school fees,
had “funds carried forward” of £437million and investment income of £12.3million. What % of that is being used for the greater good?

c) Would they really close? Given the huge income of some of them, and their investments and so on, the richer ones seem unlikely to close. And would it be such a tragedy if some of the poorer ones did?

I'm agnostic about private schools per se, but sense that their charitable status is indefensible - so I'm not 'calling' for anything other than arguments in favour of the charitable status from posters who might understand it better as there are so many good arguments against it - for example, as contained in these articles:

www.theguardian.com/commentisfree/2018/aug/16/private-schools-charitable-status-strip-benefits
www.civilsociety.co.uk/voices/john-tizard-private-schools-charitable-status-is-neither-in-public-interest-nor-that-of-other-charities.html

I would talk about the charities that provide education for some of the most disabled children in society but past MN experience tells me that people wont be very interested.

Many state schools are charities. The local MAT claims gift aid on any donations received.

Depends on the school but the local day private school from me takes part in local sports leagues with the state schools and always hosts the big competitions, hosts music events for the schools, allows promising young swimmers to train in their pool for free and generally takes part in the community. It's not a posh school, the kids that go there mostly have parents who were state educated but have decent jobs, the kids of drs, university professors, and those who scrape the fees together from ordinary jobs too, lots of kids on 50% bursary's too. My kids attended a few things there and they fed them etc and no charge, they certainly give back to their community.

Eton is not a very helpful example OP. The vast majority of private schools are not wealthy at all. Those with endowments are rare and the fee income from most barely covers expenditure.

@MillieEpple

I would talk about the charities that provide education for some of the most disabled children in society but past MN experience tells me that people wont be very interested.

I'm interested but think that deserves a different thread. I think special schools don't pay rates, but in this discussion I'm most interested in the justification for public schools having charitable status and saving so. much money.

If you want to look at Eton's charitable record it's all published in their website.

The headline figures you cite are eyecatching when presented like that, but that comes in at only £55 per pupil per term.

If that figure includes private nurseries, it will be even lower.

If there was a currently legal easy way to turn charitable assets into private ones, I think most schools would be flocking to take it. At the moment it means complying with the law on closing charities, which would effectively mean the closure of the schools entirely.

I've never seen a proper proposal for how the change could be achieved. If there is one floating around, wouid you link it?

A lot of independent schools, particularly preps, are teetering on the financial brink. If they go under then their pupils could end up in the local state schools, costing the state far more.

Private schools in Scotland now have to pay full business rates but maintain their charity status I think. So yeah it can be done.

It is difficult to give up charitable status so they can’t do it without a change in the law. I suspect many would if they could. IIRC charitable assets have to be passed to another charity rather than becoming non charitable assets.