Monday 22 October 2007

Penalising prudence

The government is simply wrong to impose a blanket 5% levy on school surpluses. It is true that some schools have sizeable surpluses that are hard to justify. There is a case for taxing large surpluses, especially where they are not being kept for a capital project, but there is no good reason apart from Treasury intransigence why every school that has planned for a modest 1 or 2% surplus to cover unplanned costs or is saving for a new classroom, should be penalised while a school that is profligate is not. Ministers should either scrap this silly scheme or refine it to something more targeted.

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