To think good school places will be even harder to find next year because of the VAT on school fees

[Nesca1]

We are are looking at secondary schools for DS. We have our eye on a decent school bang in the middle of a solid middle class area . The school is always over subscribed; this year we would have gotten a place but last year we would have missed out because of how far we are from the school.
Usually, the school offers places to children living 1600m away, last year it was 1400m due to a large number of sibling applications.

Due to the whole VAT issue, i think more parents from the local area are going to be sending their kids to this school, rather than sending them to private schools.

Is this a reasonable assumption? I don't think parents will wait for the policy to be enacted, but they will move their year 6 children into this school.

Sadly, this will not happen. Even the IFS optimistic/flawed calculations estimate raising the equivalent of around 1% of the state education budget. Even if every penny raised gets put towards the state sector it won’t make a difference.

The issue is also not just about affordability but also perceived value.

Our DS is planned to be at PS for the full 14 years and as older parents we have saved and invested significant amounts to ensure this is affordable.

However even though it might be affordable it is inevitable when he reaches 11 that we may consider value alternatives ie grammar schools. Speaking to other PS parents we are not alone with this view.

If the pressure on grammar schools comes not only from those who can no longer afford PS but also those who quite fancy selective education funded by the tax payer as a value alternative then there will be a huge issue for state school children in terms of opportunities at the best state schools.

For many PS parents grammar entry which they may never have considered previously will become a shot to nothing. In general pre-prep and prep fees are far cheaper than senior fees. The second 7 years generally costs double the amount the first 7 does so a value assessment at 11 will start becoming the norm for swathes of PS parents even if they have the cash for senior PS.

The VAT fall and lower income tax that situation likely creates will soon dwarf the relative pennies Labour claim will be raised by the policy.

Yup! I know private parents are horrified at the idea of their little darlings mixing with the hoi polloi but 95% of us use state schools and our kids are fine thanks very much.

its easy being ‘top’ at something in a school of 400 kids, but if you want genuinely ‘well-rounded’ kids then state schools, which are actually competitive, are a much richer experience, have kids from all backgrounds and prepare children better for the modern world.

I mean the tax code can specify the difference between a biscuit and a cake. It doesn't just stop at "food" or even "sugary snack food" as a product.

VAT codes can be messy but it's not impossible.

Ah, another one with a crystal ball… my friends who use private schools all seem to have one of these at home…
The reality is - they don’t want to fork out more money. But they will if they have to.

I wish I had your confidence however the markets don’t agree at all.

They have a Labour led government being around a 93% probability of happening.

Yes, I think you're right OP. Certainly in our local area, there is a choice of local secondaries in special measures, a girls' and boys' grammar or private schools which are mostly attended by overseas students.
I don't think an extra £4K + will massively impact the overseas sector but the scholarship families would probably reconsider the academically superior Grammars as a real alternative.

I just saw a post on IG - of the top 20 schools 19 were grammar

It’ll just reinforce that and people will use spending power for that instead. It seems to be what people want but some dc will miss out.

That's shocking what that Head said. Was it said in front of your DS too? xx

It’s nothing to do with having a crystal ball. I don’t think anyone would argue that a 1% increase in state education spending is going to make any meaningful difference.

Or increase the number of them...

Yes agree OP
Parents won’t risk a potential huge hike in fees.
If it doesn’t happen they’ll just move them out later assuming the PS near you will have places for them. They’ll take that risk and wait.

Unfortunately many people don’t live in areas where the state schools are “fine”. Lots of children have moved to the private sector precisely because the state system has failed them. If the 95% of state schools are “fine”, why are teachers leaving in droves, school refusal figures increasing hugely etc? Many kids really aren’t fine.

The state sector needs huge improvement, but taxing the private sector is not going to help with that. We need to start from the bottom up, not the top down.

Also Gloucestershire.

Our state schools are really crap.
Any parent that has the money or can get scholarships or burseries moves to the private sector.
They have no choice.

Plus my area in Kent

If it’s in a solid middle-class area, the addition of VAT probably won’t be too much of a hit. There’s still VAT on a portion of the fees; if I am right, it is currently just the tuition element that’s VAT-free.

Fees are rising above inflation currently and adding another 20% will change some peoples plans

It's not just a 20% increase, private schools go up every year between 5 and 10%, I believe there has been a recent 5% employer contribution increase to the teachers pension scheme plus increasing energy cost / maintenance costs all get passed on. So parents could easily be faced with a 25% increase next year.

No that's not right. There's no VAT on fees at all as closely related supplies are also exempt e.g. school trips or school lunches. For that reason the whole fee is generally exempt, even if it includes e.g. the cost of lunch.

More detail here https://www.gov.uk/guidance/vat-on-education-and-vocational-training-notice-70130#:~:text=If%20you%20are%20an%20eligible,services%20(see%20section%207).

It’s this 👆 fees have already been going up a lot. Ours went up 8% this academic year, with another rise of 7% for September. We will take the hit for the next year as ds will be year 11 so GCSEs. But we will them send him to state 6th form - not the original plan. We are definitely not the only family changing our plans.

Thank you for correcting me.

This is one of the issues I have. People often claim that it’s not “fair” that only some children can access private schools. What I think is even less “fair” is the fact that only some children can access a decent state education, whilst others only have the option of dreadful state schools. When the state is funding it, all children should have access to the same decent level of education. There’s huge inequality in the state system. If there was an option for us of an excellent state school, we would happily save ourselves tens of thousands of pounds a year. Most private school parents are not paying huge amounts of money for the fun of it!

Or it depends on how many have managed to move to the area or buy a property.

Agreed. We have exactly one choice of high school unless we move to a different town. It has a terrible reputation and parents are taking kids out to homeschool them at a shocking rate.