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INVESTIGATION by Paul Hutcheon
Despite huge defence cuts, officers earning £100,000 a year are still allowed to bill the taxpayer for sending their kids to elite public schools such as Fettes and Gordonstoun.
Thomas Docherty, the Labour MP for Dunfermline and West Fife, said the subsidy was "unacceptable".
The Continuity of Education Allowance (CEA) pays for a private boarding school education for the children of service personnel whose postings change.
The CEA benefits around 5500 claimants and costs nearly £180m a year, of which around £70m is to meet the recipients' tax liability.
The allowance is capped at £6074 per term for every child and beneficiaries must pay at least 10% of the total school fee.
Amid criticism that the CEA was a perk that disproportionately benefited officers, the UK Government announced a review in 2010. But only minor changes were made following lobbying by senior officers.
Figures obtained by the Sunday Herald show how lucrative the scheme is to private schools north of the border. In 2009-10, £3.63m was transferred from the public purse to the independent sector, followed by another £3.68m the following year and £3.44m in 2012. The £10.75m educated around 300 children from military families and benefited nearly 200 military personnel.
But this excludes the tax liability that was paid by the MoD directly to HMRC.
According to the MoD, 26 private schools were used in Scotland.
It was not possible to obtain a breakdown of how much each school received, but in 2008 Lomond school in Helensburgh received £718,550 in CEA.
Although the CEA is open to personnel in all ranks, UK-wide figures confirm that officers are the major users of the allowance.
Last year, 1120 lieutenant-colonels – who earn up to £77,617 – received CEA, whereas only 290 individuals at warrant officer 1 rank received the perk. While 160 brigadiers pocketed the allowance – officers who earn £97,030 to £100,963 – only 80 lance-corporals chose a private education.
In Scotland, many of the children of lower-ranked soldiers are educated at the MoD-funded Queen Victoria School in Dunblane. Parliamentary figures also show that a significant number of personnel based in the UK, rather than overseas, receive the allowance.
More than 4000 children whose service parent is UK based are supported by CEA. Of these personnel, the majority are in the ranks of major or lieutenant colonel.
Foreign & Commonwealth Office diplomats and officials from the Department for International Development who are posted abroad are also entitled to CEA. It is another example of how the taxpayer diverts money to private schools.
This newspaper revealed last month that independent schools, by virtue of their charitable status, received non-domestic rates relief worth £10m in the last three years.
By contrast, state schools are charged the full rate, payable by local authorities.
Thomas Docherty, the Labour MP for Dunfermline and West Fife, criticised the CEA. "There is a legitimate need for boarding school education for servicemen in places such as the Falklands and Afghanistan, but the MoD has not got to grips with the spiralling costs of this scheme.
"It is unacceptable that taxpayer should be subsidising to the tune of £10m private schooling in Scotland. The default position should be that children of service personnel should try to use the Queen Victoria School in Dunblane."
John Wilson, an SNP MSP for Central Scotland, said: "At a time when the MoD is pushing through deep cuts, it is very disappointing to see that funds can still be found for officers to receive a subsidised private education. The MoD should make much better use of existing facilities, such as the Queen Victoria School in Dunblane."
A spokesman for the MoD said: "Military service means that personnel of all ranks are required to move much more frequently than most people. This can place a real burden on families. CEA helps serving parents ensure that their children's learning is not disrupted.
"Eligible personnel of all ranks can claim up to £6074 per child per term if they meet the criteria for the allowance, but must pay at least 10% of the overall fees. The policy was reviewed last year and found it still contributes to operational effectiveness by supporting family mobility."
John Edward, the director of the Scottish Council of Independent Schools, said: "The CEA is provided for UK armed service families to help them provide for their children's stable education that would otherwise be impossible if they accompanied their parents on military assignments both at home and overseas. To suggest it is a 'tax break' for independent schools is as inaccurate as it is dismissive of the needs of service families – who themselves have to make substantial contributions to their children's education."
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