Labour, private schools VAT and universities

[BloodyHellKen]

Following on from the thread about Labour, private schools and VAT please could someone explain to me why we shouldn't be concerned that a Labour govt wouldn't remove tax exemption from universities also as they are also VAT exempt in the same way private schools are.

I'm not personally worried about VAT being added onto private school fees and I recognise arguments for and against but the possibility of VAT being added onto a university education does really concern me.

Anyone?

Most won’t leave. But problems for the state don’t mean that the policy is wrong.

Agreed. Blame the Tories. They’ve had 14 years to do something. They’ve made it all worse.

If average private schools are charging almost £30k with VAT annually for secondary education day pupil, they really does reduce the numbers who can access it.
we have thought about it. But now it makes more sense to move into a good catchment area at secondary and pay for private tutors.

We will pay probably an extra £100k for a comparable house in the better catchment. Before we thought of paying that for private school which would have paid for years 7-11 almost. But not anymore. So the state loses out really as they’ll cover those years now.

2.7% down on rolls even before Labour get in. Grammars reporting a record rise in applications for this coming Sept. The IFS estimate was 5-7% but now looks more like 7-10%.
That's all anyone can do, an educated guess. Anecdotally people always already reporting going for grammars over private and withdrawing at end Yr 11.
All the evidence so far is going in the direction of initial discussions.

Birth rates are down (17% in London in ten years), the last bulge year in secondary was last year so overall numbers in all schools are falling. Cost of Living crisis and rises in mortgage rates is bound to mean less people can afford private schools. School fees have also increased (see schools leaving the TPS because it’s unaffordable). With all of these pressures, I’m amazed that numbers haven’t fallen more than 2.7 %.

Doesn't matter if "most won't leave". 10% leaving = over 50,000 kids that the state will have to fund.

Yes but you capitalise your £100k (less moving costs) whilst private school fees are a sunk cost so it is a more financially sound choice. How do you know you will need to tutor?

There is no basis for assuming 10% will leave. You don’t know what will happen.

A lot won’t leave. Only at transition stages.
But a lot more now won’t start. And just move into catchment areas and pay for tutors to get entry to grammar schools. That logical.

As a previous poster has said, “Grammars reporting a record rise in applications for this coming Sept. The IFS estimate was 5-7% but now looks more like 7-10%.” This policy impacts decent state schools just as much private schools.

It is a realistic projected figure. You can argue about it but 7-10% is looking realistic based on behaviour changes already being seen.
The Grammar Heads warned about this 6 months ago!

And you don’t know how much of this is simple cost of living crisis issues. You can’t assume it is the product of a mooted pilicy of a government that hasn’t even been elected yet!

At the end of the day , however many leave the state still has to fund them.

You are speculating about what is driving behavioural changes and it could be a lot more complex than hypothetical VAT.

The govt are going to have to raise fees one way or another or see a number of universities go bust in the next 2 years.

its the only “private” business model where the govt (who ultimately may pay the fees) sets the cost (fees) that the business can sell their product at. Even when the cost of that product has shot up, but the business isn’t allowed to increase prices. The sector is in deep shit currently.

Yes but the scale of the issue can be very different depending on who you believe. We don’t know what will happen.

Many DC won’t be capable of getting into grammars even with tutoring. You can’t make that decision about a four year old.

The IFS admitted they underestimated at 5% and new estimates are 7-10%. The economists who research this don't just pluck numbers out of the air, they use behaviour modelling techniques.
Of course no-one has a crystal ball but these are logical %.

But private parents are the ones who can more easily afford tutors etc.

Lots of state school parents can too. You may be underestimating the competition in the state sector. Not all DC need tutoring to get into grammar either. Some get into super selective grammars without it.

If day fees reach £30k a year for a standard private school, that really does limit who can access it when only 5 years ago they would have been about £20k.
Sure some people will always be able to pay, but for a lot of people approaching entry points now or soon, that amount is just not viable even on a great salary with one or two children. And also what the private schools offer will not justify that amount. Particularly now that some universities actively discriminate against private school applicants.
Ultimately, the state will then be paying for those children at state schools and there will be more push to get into the better schools.

‘Which the state will then have to pay for whereas previously they didn’t.’

We’ll cope. The benefits will far outweigh the disadvantages

Modelling is as much an art as a science and very much has its limitations. It is all based on assumption/ hypotheses. That’s why there are always ranges of different scenarios. Models often come up with projections that are very far apart indeed. People assume because a model has been built that speculation is more robust. The truth is that there is a lot of rubbish in/rubbish out and sometimes specific agendas behind assumptions. However, people can be gullible.

‘If day fees reach £30k a year for a standard private school, that really does limit who can access it when only 5 years ago they would have been about £20k.’

Its posts like this that make me realise HOW out of touch some people are… £20k plus the extras PER child already limits who can ‘access’ these businesses