School dilemma - is the 20% increase going to happen?

[FredandAmy]

We have one Y7 DC at private school and a younger DC due to start school later this year. Both DC are dyslexic (youngest not yet officially diagnosed but obvious to me and nursery staff have raised it) and the private school has excellent learning support. It has been amazing for DC1.

Planned to send both private but now worried about the potential huge rise in fees when Labour wins the election next year. We can currently afford fees for both by making sacrifices but if two sets immediately rise by 20+% it would mean one would have to leave.

We have a good state school close by, and hopefully she’ll get a place there but I’m worried that the DC will resent not being treated equally. Also worried that DC will not receive the support they need.

Am I worrying unnecessarily? I don’t want to start her at the private school and have to pull her out when she’s settled, and then find the state school doesn’t have any places. Not sure what to do for the best.

Are they subsidising them?

@ladymacbeth

Wasn't being testy. If low end average day school fees are £16-17, 20% of the total of 2/3 easily covers the £6-7k per state pupil. This doesn't include boarders and I doubt very much if a third leave, they are the strivers after all.

It’s rather over simplified, as it will likely be gluts in certain areas as schools become unviable, and other schools remain oversubscribed regardless of fee level.

You're correct, it would save/raise money. The study often cited on here was conducted by the independent schools body and was embarrassingly poorly researched, vastly underestimating fees paid and overestimating the amount of pupils that would leave. It also flat out lied about the amount and cost of 'charitable' activities.

I get the maths, I'm wondering where you're getting your ballpark number of leavers from? Does that include the schools that will shut?

@SheilaFentiman

If you become unviable because the tax payer is no longer subsidising your provision of a restricted, elitist service, I have little sympathy.

It’s not so much leave - we will pull money from savings if needed to keep ours in through exams - it’s “never start”. Intakes at some schools will shrink at year 0/3/7

Wasn’t this attempted in the mid 2000s but failed - not sure why.

The one I went to was private and solidly academic but not remotely flashy; plenty of peeling paint and zero ponies. I finished my A Levels in the late 00s and by the mid 2010s I was in a job where I had to visit state schools frequently. I was amazed at how much nicer the facilities were than the ones we'd had!

Most of the local schools were dire and anyone who could send their child out of the county (we were on a border) or to a private school was; there were quite a few parents from modest backgrounds making sacrifices. One friend, for instance, had a single mum, dad had died and mum was a nurse.

That school went bust after a few years of declining pupil numbers. The cause? A new, excellent state school opened down the road. Parents weren't sending their kids to my school because it was private, but because the alternative was dire.

There are some flashy private schools that grab headlines, but there's also a huge number of local day schools which are just plugging away and being academically decent but far more normal than people envisage when they hear the words private school.

Would you mind linking to the calculations you have seen? The difficulty for people in the OP's position, as I see it, is that despite this being in the Labour manifesto for years, they haven't given any detail on what it would entail, so leaving it quite difficult to predict. In the OPs position the safest assumption is that it would be 20% on everything immediately, with no gradual introduction or exemptions for specialist schools. One reason I would assume that is because in all of the policy debates they simply seem to use a figure of 20% of the current estimated fees, without even making allowance for the reclaim of VAT that schools pay or any children moving to the state sector. I think 20% immediately is the only safe assumption in that context but it may simply reflect that they haven't done the detailed policy analysis.

It may be that in fact there has been more information than I've seen and that they have put out more fine grained detail on which their calculations are based.

Let's hope so!

Hopefully most parents who have already put their kids in private schools will have planned sensibly to avoid disruption for their dc. If new intakes fall, I would welcome that.

I wasn’t expecting so many responses- thank you to everyone who has taken the time to reply.

Interesting perspectives on sending one to state and one private. I know in my heart of hearts I couldn’t do that but it’s a difficult decision to take older DC out as he’s thriving and has been there since he was 4. I’m going to look into availability at the local secondary now as I suspect they’ll be inundated next year, he does already have some friends there.

I’ve also emailed DC1’s school to ask how they propose to deal with any VAT changes. They open their facilities (pool, theatre, sports, language centre etc) to the local schools so I also want to know how long the state schools will benefit from this if dc go there. This will help us to make a decision.

To be honest, even if Labour don't get in or don't immediately enact the policy, aren't you expecting some pretty big price hikes going forwards anyway? If your school can afford to absorb the cost of rising energy bills (these increase a lot more for schools than households and are usually the biggest expense for schools after staff) and increased costs of attracting good staff as the pool of teachers in England continues to shrink- then it probably won't pass the full 20% on to parents anyway.

If it can't then you're likely looking at some higher than average price hikes this September and possibly next September too. It likely won't be 20% all at once but presumably there's a threshold before that point where keeping two in becomes difficult for you?

Anyway, my personal suggestion would be that your older child stays in school until they've done their GCSEs, and then goes state for sixth form- this is very common, and lots of people do it for lots of reasons- and a change might be good preparation for uni, too. Then your younger child goes private for secondary, or a bit earlier, so you're only ever paying one set of fees at once.

Imagine how amazing this country would be if every kid got to go to an "accademically decent" school.

Do you mean this report www.isc.co.uk/media/5926/isc-vat-full-report-1018-for-circulation.pdf I think you must mean another as this doesn't mention charitable activities (they aren't relevant to the VAT question) and uses the same figures as the then Labour manifsto for fee income. Is there another report?

The report I have linked to might be helpful OP because on p17 they have KPMG's analysis of the net VAT position of different schools. It's a relatively small scale analysis but almost all of the commentary on this issue seems to ignore input VAT. Anyway, you can see from that why I suggested it might be better to assume that a 20% VAT rate would feed through to a 10-15% actual increase once you take into a/c net VAT and any reduced costs.

I would definitely work on the basis it is going to happen. The fact Labour used an opposition day on this measure recently IMO signalled intent. It is very popular electorally and Starmer is also going to make a big thing of doing what he said he would.

I’m not sure if this is a reverse… surely with galloping inflation under the Tories making everything unaffordable you (and everyone else) will be a lot worse off if Labour don’t get in? Either way, fees will be going up significantly.

I said 'if' a third leave. I would be surprised if the number was anywhere near that. They don't have to close, they could become free schools. I'm sure that would work.

I don’t think it’s that straightforward to become a free school. Also, teachers might have TUPE rights to carry on with current private school salaries!

@Mia85

The ISC response to Labours latest proposal tacked on a claim about charitable partnerships alongside their dubious funding claims. They claimed over double the amount of partnerships that could be verified. Labour used their own costings and have only suggested charging VAT if genuine charitable status cannot be proved.

Thanks. - do you have a link to Labour's costings, I've never seen any of the detail from them, just the broad 20% of current fee number.

PS VAT isn't linked to charitable status. It's because education provision is currently exempt from VAT.

Then they close and pupils go to another independent or slum it in state schools. Or provide evidence of actual charitable activity - Labour is only proposing imposing VAT if charitable status isn't justified; surely a reasonable suggestion?

The charitable status and VAT are separate issues

@Mia85
I know. Labour is suggesting linking it to genuine charitable activity. We can change VAT rules.

@SheilaFentiman the private school I work for pays state school rates.