Private schools escape paying £2.5 million in business rates to council
Half of Camden's independent schools are set up as charities, qualifying for 80 percent rates exemption
19 October, 2018 — By Richard Osley
Schools chief Councillor Angela Mason
PRIVATE schools in Camden have escaped paying more than £2.5million in business rates to the council in the past year after claiming charitable status, new figures have revealed.
The eye-watering amount of money which the council has been unable to claim – at a time when it has seen its budgets slashed – has reopened a sharp debate as to whether the relief should be allowed. Camden’s council-run schools are not entitled to the same breaks and paid more than £2.3million in rates over the last year.
Education chief Councillor Angela Mason said: “I think many people would think it unfair that private schools in Camden receive, in effect, a hidden subsidy. When state school budgets are being cut to the bone and the council is having to make another £40million in cuts this is an anomaly that is hard to justify.”
Several of Camden’s independent schools have claimed charitable status, which allows them to secure an 80 per cent exemption from business rates.
Figures released to last week’s full council meeting revealed this amounted to £2,568,634, which could not be collected by Camden. Church schools, meanwhile, have a 100 per cent rate relief.
Cllr Mason said: “Many private fee-paying schools in Camden do get a ‘leg up’ from Camden ratepayers. Camden Council is so strapped for cash that any concessions on rate relief for maintained schools would just increase the size of the cuts we would have to make.”
She added: “The fact of the matter is that we have a two-tier educational system which in many ways privileges the private sector.”
Some of the most prestigious schools in the country are based in Camden, with some charging more than £5,000 per pupil a term.
The financial benefits enjoyed by private schools set up as charities remain a live issue for central government, with suggestions swirling around Whitehall this week that chancellor Phillip Hammond is considering charging VAT on school fees for the first time.
Moves towards removing rate relief were dropped in May, however, on the basis that independent schools were supporting their state-run counterparts.
Conservative group leader Councillor Oliver Cooper said: “Only charities are entitled to business rates relief, so only private schools that help the wider community don’t pay full whack. “We should encourage more private schools to give back – from sharing their facilities with state schools and community groups to granting scholarships to local families – and the offer of rates relief for charities is one way of doing that.”
Camden has famously resisted the conversion of its state-run schools into academies run by outside sponsors, a move which Cllr Cooper said had blocked them from securing similar relief, as academies are also entitled to reductions.
“Under Labour’s own Academies Act, academies get 80 per cent or 100 per cent reduction in business rates, so giving them those powers as academies would mean £2.3m more funding for Camden schools,” he said. “Sadly, for ideological reasons, Labour opposes giving schools more power, despite its school results deteriorating relative to all other inner London boroughs in recent years.”
Cllr Cooper has called for a “themed debate” on school performance at the next all-member council meeting.
Cllr Mason said: “I am proud that the Camden family of schools has stayed together and that our schools are continuing to post such good results, with again considerable improvements against London benchmarks across all years.”