To not see how the gov will make any money from taxing private schools?

[AngryHedgehog]

All the other threads seem to have descended into bunfighting over the ethics of the policy, yet I'm not really understanding how this stands to benefit the government as surely they'll be footing the bill for all the kids that move to state schools?

As a disclaimer, I don't have kids and wouldn't be able to afford to privately educate them even if I did, despite earning a half decent salary.

I'm reading that it costs around £7k per pupil per term, so it would take the VAT from around four families to fund each additional child moving to state education.

Given that this may be 4/10 kids in private education moving to state schooling, I don't see how this doesn't create a net loss as there will only be 50% more kids left in private education and there needs to be multiple times that for the VAT increase to foot the bill.

Surely I'm missing something here?

My cousin was in exactly this position. She is a GP in a deprived area. They chose to send their son to a private school due to the state of local schools. The alternative they were seriously considering was to move to the catchment of a good school on the ‘better’ side of the city and move to a work in different GP practice nearer there.

yes - and GP recruitment is hard enough in deprived areas. I'm a GP in a hugely deprived area of London - we have been under-doctored for over a decade.

If Labour had been smart, they would have announced they planned to conduct a ‘review’ of VAT removal first. This way they could have properly assessed the implications, then once this had concluded, the result had been announced, and the proposal made sense, a timetable of a couple of years or so allowing all stakeholders including state schools etc to adjust.

It smacks of triggering Brexit article 50. Not doing a full impact assessment is crazy and it concerns me that we’re going to see more populist announcements when they get in. I was really hoping this type of approach to policy development would end with the removal of the current Tory administration, but it seems not.

https://www.theguardian.com/education/article/2024/jun/03/society-is-unequal-but-this-is-regressive-parents-on-private-school-fee-vat-plans-labour

YABU I think
-declining birth rate means that pressure on school places is easing anyway. In London(where there is the biggest concentration of private schools) there are LOTS of spare primary places (due to declining birth rate and people with kids moving out due to the cost of living). Any private sector exodees will absorbed at a marginal cost (ie the government will have to pay the extra per pupil cost but for the most part not the costs not allocated on a per pupil basis).
-there is plenty of capacity in the state system - only about 20% of schools are at or in excess of capacity. https://explore-education-statistics.service.gov.uk/find-statistics/school-capacity/2022-23
-many or private schools will absorb the costs fully or partially. Some have already said they will
-many or most private school sending parents are rich enough to absorb the costs. Yes, there are exceptions. But people with a spare £18-£23k to drop per child per year (average London school prices) are by and large not watching the gas meter fearfully or worried their card will be declined in Tesco at the end of the month.

Capacity is not uniform.
A lot of parents- majority i my experience, outside London are not rich and can't just keep absorbing increases. I am one of them.

And with all the extra sen kids in state, there will be even less focus and money for the ones already there.

Also £7k per pupil per term is incorrect. The 'basic' per annum per pupil funding is £4.6k in primary and £6k in secondary (see the national funding formula . This can then be topped up if various criteria are met - eg deprivation, EAL, mobility, SEN. On average the private population will be 'cheaper' than the mean for the current state cohort because they are richer than the mean (there is a link between SEN and poverty on a population level so this will not just affect the directly deprivation based funding) . In addition there is so-called school led funding (not dependent on pupil numbers).

So VAT on £18k fees (£3.6k) will fund about 3 state school places pa. Given that some school fees are more like £45k a year (public schools, which will continue to attract rich parents), personally I think the maths is fine.

This is not to say that some families won't be priced out by this law, and that no schools will close. But personally I see it as an absolutely viable policy. And both as an academy trustee for a set of schools in a v deprived area and as a private school parent I think it's the right policy.

Read the Guardian article I posted above (1 of 2 such articles in the Guardian), or ASI report, or EDSK report. Just to mention a few who criticise the policy.

Not sure how that article answers the points I made? It is a collection of comments from private school parents saying they don't want the fee rise?

This is from gov.uk.
The VAT isnt funding state school places.
Every private child who moves to state school costs the tax payer £7.6K.

See my comments above. The £7.7k figure you cite (which is per annum not per term as the OP says) is an average figure. Per pupil funding is determined by the National Funding Formula taking into account the individual characteristics of each pupil. Due to the affluence of private school pupils they will be cheaper than the average to fund, applying the National Funding Formula. It's also possible that the £7.7k figure includes school-led funding averaged out on a per pupil basis -and as I say, due to the capacity within the state system, school-led funding will not need to increase proportionally for each additional pupil absorbed into the system.

See https://assets.publishing.service.gov.uk/media/651d2587bef21800156ded01/National_funding_formula_for__schools_and_high_needs_2024_to_2025.pdf for details

How on earth can £3.6k VAT fund three school places?!

So sorry, you're right, that was the wrong way round: I meant VAT from 3 private school places at £18k pa will fund (comfortably) a state school place.

only about 20% of schools are at or in excess of capacity

Why do you think any are above capacity if there are plenty of spaces?

many or private schools will absorb the costs fully or partially.

For the vast majority of private schools, this is a complete impossibility. They simply do not have the ability to cut their costs by over 10%. Why do you think they have been putting prices up so much recently if they could have cut costs? The likely increase in fees this year for most if they introduce VAT will be over 25%.

Exactly. If this is what pp are relying on it’s not going to go as they want

So if out of 4 private students 3 stay put and one leaves to state then the policy breaks even financially.

Hardly a great result is it? The people who 'win' most are likely the 3 remaining private kids who have an even smaller class size!

So if out of 4 private students 3 stay put and one leaves to state then the policy breaks even financially.

And even if there were spare places (which there aren't in my local area), it assumes there's no further costs such as capex on extra classrooms and facilities to house the increased numbers. Or frankly buying land and building schools from scratch as there's no capacity to absorb the numbers where I live (there's not enough land either but that's another story).

Honestly, it's just an ill-conceived policy. Despite what many posters think, private school parents do not want state schools to fail. My state school education was fantastic (bar the extra curriculars) and it's paid for my kids' private education.

There's some outstanding state schools near me but the house prices are even more extortionate than everywhere else (a million plus for a modest family home in the catchment area). When those private school parents decide to move near to the best state schools, is that levelling up?

You'll end up with the lower income families having to live near the lowest rated schools. And everyone with bigger class sizes. Our school has a third of pupils on bursaries, many full, which will be withdrawn. It's not a net win whichever way you look at it.

The 3 remaining private school children won’t win as lower numbers mean the school is less financially stable. A 25% reduction in numbers would close many schools then 100% of those pupils need a new school. Some will get places in other private schools but many would move to state. Then there are the short term costs of the school closing and the council picking up responsibility for students. This school closed ten years ago - it cost the council £257,000 (£350,000 in today’s money) to educated 98 primary school pupils for up to five months before they were found school places over the summer or found private schools (that link was behind a paywall).

https://www.bbc.co.uk/news/uk-scotland-north-east-orkney-shetland-27717321

Most private schools are in the south. If one closes, parents will send their children elsewhere.
Frankly there is some poor private school provision that needs to close.

@GOTBrienne The very pristine PS near me has a theatre where big name comediennes and musicians play. Maybe more need to diversify to make them financially viable.

Diversify in what way?

Where did you get that data from because I'm in the NE and there are 8 in our region.
30% of Scottish pupils are at private schools.
Would really love to hear where you get the figure from that says for definite that there are more private schools in the South.

In how they bring in money. I mean lots seem to have nice land and are empty mostly during the summer.
My friend taught at one which offered accommodation in the summer like universities do.