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?

I’m in Yorkshire. The local private schools are currently charging over £23k for upper secondary and sixth form day pupils. You add on the annual 5% increase and 20% VAT and you will be hitting £30k very shortly.

We are only just out of the system. My youngest DD sat her A Levels this time last year. You could say that sixth form are the key years. Many just switch to private then.

And for the children just starting now. They have another 16 years to go. Even primary school will be very different now compared to when yours were there. Yours started school when Labour were in power and sure start still existed!
And many parents try to avoid private sixth forms now given that some universities often unfavourably discriminate those applying from private school.

Sixth form is important if you are going to university too. There are plenty of other children who go down different routes.

My take is that those who have children in private school now are unlikely to move them until their child reaches a natural transition point. Such as starting secondary or sixth form. And even those struggling to pay fees will do their best to get them to that point and make plans for then (applying to grammars, moving to catchment etc).
But within. 5-10 years there will be definitely be a significant fall in those starting at private schools be it in reception or year 7. The cost will simply be too much for not enough benefit. Private school fees have risen at an astronomical rate in recent years even before VAT is accounted for. Some private schools will have to close due to the falling numbers.
The state will have to pay for more places than it anticipated and more people will be moving to pushing to get into the best state schools. Private schools will become for the true minority elite like most other things they have access to too.

Of course, there are ultra high paying schools all over but the fact remains that the average secondary fees are just over £15k, not £30k

£15k at upper secondary and sixth form? That’s very cheap and I suspect the average private school does not charge that for the GCSE years. None of the local ones here charge that. Realistically it’s much more.
But I am referring to when VAT is added along with the standard annual increase, plus the obligatory extras. Even at £15k (which is unusually low) that would become £18k per child. Plus the annual increase.

The average cost per year at private school is now over £20k for day pupils. More for upper secondary and sixth form. And it’s increasing year on year by at least 5% to cover costs.
you add 20% VAT on top of that in one go, wil cause a lot of parents to reevaluate very quickly. Particularly those who are thinking of starting.

Additionally, the NZ Government contributes to capital expenditure for private schools.

No they don’t. That was a one off project funded under a Covid recovery scheme and allegedly chosen because it was a project that was ready to go.

More likely it was a dodgy decision by a politician with his eye on upcoming elections - he had to apologise for it.

https://amp.theguardian.com/world/2020/sep/04/james-shaws-mea-culpa-on-green-school-funding-exposed-his-lack-of-political-nous

NZ government funding is restricted to a per student amount based on the age of the child, ranging from $1000 to $2100 per child.

NZ private schools pay for all capital costs from fees and stakeholders.

According to IFS average day fee is £16.7k (see Table 1 here)

ISC data also indicates the median and mode are in the £12-15k range. The mean is skewed upwards by the very expensive, but numerically very small, premium outliers - the ones everyone's heard of and talks about non-stop, although they account for around 1.5pc of independent children and 0.2pc of children overall.

So. The significant majority of day schools are charging around 1.2 to 1.5x the cost of state school if you include (correctly) fixed costs and overheads for the latter, as most analysts don't. More expensive, but not quite as dramatic as many on here are saying. It only looks amazing from the perspective that state school is "free" rather than itself costing £7.5k variable and ~£11k including fixed costs.

That's why it's so important not to consider state schools as "free" but to remember they are simply "paid for by others".

‘The local private schools are currently charging over £23k for upper secondary and sixth form day pupils’

South - between £18k min fees ( NOT including extras, school transport, uniform & sports equipment, sports coaching, music lesson, language pathways, even exam fees) going up to 38k in our 8 local/ closest schools.
The idea that schools outside London aren’t still the preserve of the wealth is a myth.

Would you have a link to this please, did they revise the original paper?

I wonder if you might read the post above yours and reconsider?

There really aren't many day schools with fees of £38k. Which eight schools are you referring to?

I just looked at the fees at my local independent schools (south of England), I haven’t included any of the big names) and pre prep / prep is coming out at around £12 - 20k (some with extra charges for wrap around, transport or lunch) and senior school £18 - 30k for day pupils. The big names are £27 - 30k + for senior day pupils.

Universities don't unfavourably discriminate against those applying from private school. They look at examination results in the context in which they were achieved. That is a very different thing altogether.

There really aren't many day schools with fees of £38k. Which eight schools are you referring to?

Between £18k and £38k for day? I can believe that - Charterhouse is £38k for day pupils.

Wycombe Abbey is £38,700 for day pupils too.

The average for secondary school - throughout school - is £15,655. I’m afraid you’re just unlucky in your area! But yes, for most of us tgat will mean 18,000 which is a frankly awful thought.

Once again, state schools are free at point of access, which you seem to constantly ignore. Exactly like the NHS, which I would guess you would also have big issues with. My husband and I have paid huge amounts of taxes over the years and we still do and no longer have any children in school. I have no problem with contributing to younger children's education at all. Along with healthcare, I can't think of a better use of my taxes.

According to IFS average day fee is £16.7k

That’s the 2023 ISC census data that’s now out of date. That average day fee also includes both day school day fees and boarding school day fees.

You might want to sit down and pour yourself a stiff drink before you see the 2024 figures.

According to the 2024 ISC census the average day school fee is now £17.8k, but the average day school fee at schools that also provide boarding is much higher - £23.5k.

I think regardless of VAT there comes a point where the cost of private school outweighs the benefit. There is a roof value for everything. I enjoy a take away latte, but now in some cafes (Yorkshire), the prices have risen to over £4, so now I just don’t bother anymore. I don’t think the latte is worth that money even though I can afford it. It’s the same with eating out etc.
A silly example of coffee, but if private schools in my area go up to pushing £25- £30k per annum with VAT for secondary and sixth form, then it simply stops being value for money and would rather put my money into a house in a good catchment area and pay for extras such as tutors etc. I think a lot of people will think the same. The state will then have to pay for that education. And I will have more equity in my home as my money will go there instead of private school.
There is always a cut off point where people think no that is too much money for the benefit I get. And private schools are definitely hovering around that at the moment. As I said previously, the result will be that private schools will end up just being for international pupils and the very wealthy in this country. Not for those who work middle class jobs and make hard sacrifices to fund it.

I don't have issues with the NHS (or rather, I do, but not about the fact it's paid for from taxation), please don't make stuff up. Nor, (as I've mentioned twice and you seem to constantly ignore), do I have a problem with paying via the tax system for other people's education.

I have a problem with pretending "state schools are free" to justify an education tax and saying "look at those enormous tax breaks/subsidies over there".

Education is a social benefit whoever pays. Independent education is a particular social benefit because it saves the taxpayer £££. And there are no tax breaks nor subsidies for independent schools. Many countries have tax breaks or subsidies, we do not.

The only subsidy is the 100% funding of state schools (which I don't have an issue with, before you say otherwise yet again). The only tax break is the almost unique ability of state schools to reclaim VAT on purchases while not charging VAT on sales.

Completely agree. People have a breaking point and nobody knows where that is. Just because people accepted the previous rise, doesn't mean they'll accept the next, especially when "the next" is going to be 2-4x the previous.

The IFS / Labour Party assertion that "the rich will pay, they always do" is like walking towards a cliff with a blindfold on. "I haven't fallen off yet, therefore I'm safe to keep walking, in fact I'll break into a run".

In addition those who will be thinking of sending their children to private schools will be of a different generation now. The generation affected by huge property prices, recession, high nursery fees and significant student loans as well as stagnant wage rises.
They will have lived a significant part of their adult life under a Tory government.
Parents in their thirties with children approaching school age. This generation has a lot less disposable income compared to the one before to pay for private schools.

Average day fees calculated nationally are useless unless you remove London. In some parts of the UK the average day school fee can be anywhere between 2-4.5k per term. And in these areas parents aren’t rich - many can still send their kids to private on 45-50k salaries because house prices are low.

The families who send their kids to private in these areas don’t have an unlimited ability to weather costs and schools know this. If VAT is applied in these areas I expect fees to freeze / decrease commeasurately. There are also link ups with private providers - eg some private schools near Birmingham will replace teaching support for 11+ with private tutition if VAT is applied.