Mary Hanafin (Dún Laoghaire, Fianna Fail)

The issue of tax exemptions is a matter for my colleague, the Minister for Finance. However, I understand that those primary and post-primary schools that have been granted charitable tax exemption by the Revenue Commissioners under section 207 of the Taxes Consolidation Act 1997 were granted the exemption on the basis of their charitable objects and purpose. The matter of whether they are fee-charging schools was not a consideration. Approximately 420 primary and post-primary schools have been granted charitable tax exemption.

Since 2001, all primary and post-primary schools providing education based on a programme prescribed or approved by the Minister for Education and Science automatically qualify as approved bodies for the purposes of the donations scheme under section 848A of the Taxes Consolidation Act 1997. There are approximately 4,000 such schools in the State. The schools do not have to be charities to qualify for the donations scheme.

Any consideration of the funding arrangements for fee-charging secondary schools should take account of the historical context that gave rise to the differentiation between these schools and non-fee-charging secondary schools. This differentiation arises essentially from the arrangements put in place when free second level education was introduced and those arrangements took account specifically of the position of minority religions with dispersed membership through the creation of the block grant.

As the Deputy may be aware, there are currently 56 fee-charging second level schools, of which 21 are Protestant, two interdenominational, one Jewish and the remainder Catholic. Fee-charging schools, with the exception of the Protestant and Jewish fee-charging schools for which special arrangements apply, do not receive capitation or related supports. I referred previously to the block grant by way of which Protestant fee-charging schools receive funding. The block grant has its origins in the desire of the State to enable students of the Protestant and Jewish persuasions to attend schools that reflect their denominational ethos and it includes payments in respect of capitation.

It would be inappropriate for the State to depart in any fundamental way from the original intent that allowed some schools to opt to remain outside the free scheme and continue to charge fees and therefore I do not propose to withdraw State funding from such schools. This support has been a long-standing feature of our education system and one continued by successive Governments.

Additional information not given on the floor of the House.

However, as I have stated previously to the House, it is important to take stock at this point and in particular I am of the view that while continuing to give reasonable support to existing schools, there should be no further development of the sector and accordingly I do not intend to provide State funding for any new fee-paying schools.

As with all public expenditure measures I will keep the funding arrangements for the schools concerned under review to ensure they remain consistent with their original policy basis.

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