
Posted 06.01.25
One of the toughest decisions facing public sector leaders is often not what to do – but what...
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The Scottish Council of Independent Schools (SCIS) represents 70 independent schools, that collectively educate 28,870 pupils and employ 7,630 staff across Scotland. BiGGAR Economics was commissioned by SCIS to assess the economic, fiscal and wider impacts of SCIS member schools.
The analysis by BiGGAR Economics estimates that SCIS member schools in 2022/23:
Beyond this, SCIS member schools create public benefit in a number of ways. They are an important part of their local communities working closely with partner organisations. They use their capacity, autonomy and agility to develop innovative approaches to education, including the creation of online education platforms that can be accessed by all. They support the Scottish education system by helping to ensure viability of some key subject areas. Underpinning all of this is a commitment to creating public benefit by working in partnership with local authorities, state schools and local community organisations to deliver public benefits for all.
The analysis also considered the implications of Value Added Tax (VAT) on school fees and the effect this could have on the sector.
The additional revenue that could be generated for the public sector from VAT at 20% being applied on school fees (£51 million) could be negated by behavioural changes. An increase in school fees could make independent school education unaffordable for those currently at the margin leading them to leave the independent sector and look to the state sector. If that were to happen, the cost of educating those pupils would be upon the public sector. There would also be a reduction in the wider fiscal contribution of the sector.
If the number of SCIS pupils declined by 13% (a decrease of 3,190 pupils) this would more than wipe out the gains in revenue from VAT, by reducing the projected VAT collected (by £7 million, to £44 million), reducing the other taxes paid and collected by the sector (by £20 million) and due to the cost of education now borne by the public sector (£24 million). On that basis, a behaviour change that led to a reduction of more than 13% in pupil numbers as a result of VAT on fees, would result in a net cost to public finances.
Furthermore, any reduction in the scale of the independent sector would have further negative economic and fiscal impacts, since it would also likely lead to reductions in employment and other sources of economic benefit, including bought in supplies of goods and services.
For more information, please see our full report:
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