VAT on fees and schools wasting money

[Cinnamonswirled]

It seems as though the fees are likely to go up by 15%.

But is anyone else frustrated by how much their children’s schools seem to be spending on unnecessary things like never ending building programmes, ever-changing branding and gimmicky roles for staff?

It all seems a bit tone deaf in the current climate.

Does anyone else feel this?

Very interested to know how people are planning on paying for these fees tbh.!

@Spirallingdownwards you don't think they are overpaid, or you don't think they are on packages below those of the state sector?

@Brainworm pensions are the topic of the moment and that is where the money to 'absorb' vat is coming from. Other costs need to be stripped to the bone first.

If parents can't/won't pay the running costs of the school then you're right, it will go out of business. But staff should not be asked to subsidise them.

Perhaps they should challenge schools on their spending first?

@Sewingmachine1. I agree that teacher pay should not be something built into the mix of keeping fees as low as possible. Other measures are available- which would result in the indie offer being more similar to the state offer in some respects.

Sone state schools achieve excellent results and indies could do the same / replicate this model. But, parents are unlikely to pay for this in areas they can get similar for free.

https://taxpolicy.org.uk/2024/01/26/school_fee_vat_avoidance/

They will have no choice but to tighten their belts! But it should not be at the cost of good teachers and teacher pensions.

Parents are only in the sector for a few years. Teachers especially longstanding ones should stand up to management.

If you calculate this latest pension increase on fees (for a school with 1000 students), it is usually around £300-400 per fee payer.

Fees have been rising far more than that in recent years. Where’s the money going?

I think management probably feel they are justified in getting out of TPS for new joiners in a potentially hostile political environment. I mean “political risk” is a big think in the private education sector right now.

Even some of the very big public schools are now looking at coming out of TPS. They will offer alternative benefits like free housing and heavily subsidised school places for teachers’ kids. It is a totally different package on offer.

@Araminta1003 thank you. Belt tightening shouldn't start with teachers' packages.

If other equivalent benefits are being offered, that's all well and good, but if the stick is fire and rehire, teachers really do need to stand up to management.

@Brainworm thank you.

Some things will have to give. I suspect bursaries paid from school fees will have to be cut, as well as expenses like travelling for an hour to play a friendly fixture or swimming every week if you have to hire a pool.

But then, what's your USP?

I think the trouble is that staffing costs are the biggest expense by far in most private schools, evident from the accounts. Most compromise on no TPS for new joiners which keeps existing good staff locked in. It is kind of hard to argue with that. And many private school teachers are just as reluctant to go back or into state as the private school parents. So management take the easy route- squeeze the teachers and pass everything on to parents. If you read the article I linked above there really is only personal risk in absorbing or structuring around VAT for management so it is going to be passed straight through.
Key teachers will be fine. It is the extensive PE staff and peripatic music teachers etc more likely to bear the brunt as some parents will have to cut back.

Refurb, food, maintenance, gardening costs have all gone through the roof in the last 10 years - not much management can do about that. If your clientele is the luxury market they are not going to accept wild meadow lawns and blocked toilets.

The mistakes have happened in the past with the facilities arms race. If you look at private schools in other European countries fees have not risen as much in the last 20 years. Some people may end up sending their kids to boarding schools in France, far cheaper.

Not all private schools are like this. Some genuinely serve the local community, do what they do well and have no interest in climbing league tables etc

I think it differs at different indies. Round our way they are better paid than state sector teachers. In other areas they are not. This is because they are businesses and are led by market forces. I live in an area where although there are a number of independents including some very selective ones and demand for places outstrips places available. Thus there is a fight for school places. The type of schools they are means they can pay teachers more. I also appreciate there are areas where the fees are a lot lower, they actively need bums on seats and therefore the salary may not be high but presumably the teacher prefers the workplace setting. There are schools running their businesses well and making money to invest back into the setting however they choose. There are schools barely scraping by and these are the ones more likely to be hit by VAT increases potentially.

I am not one for saying one things applies to all. Thus if you are not happy as a parent you vote with your feet. And therefore if this teacher is not happy with what is happening in her workplace setting, she too can vote with her feet. If she doesn't like the premise of private education she has the choice to go back into the state sector.

Again, all depends on the school. No such job titles at DDs school and the 2nd Master teaches a reduced timetable, the Headmaster teaches some of the extra curricular sessions.

School spending is not led by market forces. It is led by one consultancy firm, the HMC and ISBA.

And there is no way that parents know about pay scales in private schools. Most teachers don’t know about pay scales in their own private school.

The natural step from being indignant about fee increases is to go to Companies House and read the school’s accounts. Why do parents not do this?

Or the Charities Commission. Salary trends are a real eye opener.

I don't do it because I see no need.

I talk to ds' teachers and they are happy and motivated. None of them are leaving. Most only leave when they retire.
My son and his class mates are happy & well educated.
The school facilities are well maintained, the kitchen has just been refurbed, an elderly temporary class room has been replaced by a new built block and the outdoor swimming pool is having a part slide back roof. School minibuses are being renewed.
I pay half fees with a scholarship and that represents excellent value. Everyone is happy.

I don't feel the need to pry into the accounts. I check occasionally that the school has sensible reserves and that's enough for me.

It’s the bursaries that should be the first to go. If there is no charity status then I don’t see why existing parents would still essentially pay for bursaries. You see on here all the time, parents applying for bursaries at schools they can’t afford. Cut your cloth!

Once parents put their child into a school they know they are committed to keeping them there for a long time.

The time to read accounts would be before entry to the school.

I look at the accounts of any company that I'm about to use, unless it's a small amount

Or that one of my adult DC has applied to for a job.

That's because DH is an accountant. Not everyone understands accounts.

Maintained schools are only allowed to use non qualified teachers as a very temporary measure and in my wide experience of primary, doesn't happen for permanent class teacher posts where qualified teacher status is an essential requirement.

https://getintoteaching.education.gov.uk/is-teaching-right-for-me/teacher-pay-and-benefits#

The sheer number of people who don't understand VAT on all these threads is unbelievable.

They tell you to build new things, develop marketing and development departments, pay enormous entry fees for ‘Parent Power Times School of the Year’ competitions. Suddenly you have as many people working on the support staff as you do teachers - but these new staff aren’t supporting teaching… and your teachers are leaving (increasingly in unceremonious circumstances - check the accounts for severance fees) and being replaced with unqualified, inexperienced ones … and they don’t stay long either.

Surely that's instantly self-defeating? One of the first things most parents look for is good results. As soon as those start slipping away, the number of new applicants plummets.

Is this now a thread about Baines Cutler?

Who has misunderstood VAT @aitchteeaitch

https://www.bainescutler.com/media/3mxlqh1o/example-day-boarding-school-fee-affordability-and-parental-time-survey-2022.pdf

https://www.bainescutler.com/media/fmohr2xb/example-day-boarding-school-teacher-pay-report-2023.pdf

The old VAT report still quite interesting
https://www.bainescutler.com/media/2umbzz1c/isc-vat-full-report-1018-for-circulation.pdf

Our state school was in Parent Power. Are they paying?!

I am still more shocked that some of the academy heads/CEOs of state schools earn hundreds of thousands of pounds a year and significantly more than the head of Eton College. And yes, I looked it up. I don’t know how much our state school heads earn. Where would we find out?

https://www.theguardian.com/education/2021/mar/20/english-secondary-school-headteachers-among-best-paid-in-the-world

The head salaries being significant is a STATE AND PRIVATE ISSUE. So if state heads earn so much then private ones will have to as well?