UK universities in trouble - why not add VAT to tuition?

[80smonster]

UK universities are in trouble, apparently many could close, why not charge VAT on tuition fees (for those that are financially viable)? Bridget Phillipson says they are autonomous institutions and won’t be given a public bail out - they should rely on their own resources:
https://www.theguardian.com/education/article/2024/aug/09/english-universities-face-autumn-tipping-point-as-financial-crisis-looms

YABU - don’t add the VAT
YANBU - add the VAT

sure, if there would be a good quality free universities available.

There's 8 on that Wiki link! Off the top of my head add Northeastern (was NCH), BIMM, Norland, LIS, Pearsons and loads of smaller ones.

Yes I realised - love to see that!

There are too many universities. Many have only been keeping their heads above water because of international students, including EU students. And now we don’t get many EU students…

I don’t think we have any moral obligation to keep all our universities open. I would rather we keep investing more in vocational and technical training and apprenticeships. Just recently I have been trying to get an electrician in for a small job, and the earliest availability I can find is in October! We have plenty of work that does not need graduates, and a lot of graduates in non-graduate level jobs.

Of course we still need universities for education and learning, but I do not believe we need the current number.

The U.K. has sold student loans to a variety of private investors and debt companies over the years. They tend to sell batches every few years where the Gov gets pence to the £ of their value, but it raises a few billion in ready cash

and stopped quite some time ago @SugarandSpiceandAllThingsNaice

The last sell off was a tranche of Plan 1 loans that entered repayment between 2007 and 2009 was completed in December 2018. In 2020 the Treasury stated:

The government has taken the decision that it will not proceed with further sales of student loans. As a result, no further sales of Plan 1 (pre-2012) student loans will now be undertaken. The government also has no plans to sell Plan 2 (post-2012) loans

Just a few weeks back the HoCL published its latest briefing on Student Loan Statistics. Section 6 specifically covers Student Loan sell offs.

https://commonslibrary.parliament.uk/research-briefings/sn01079/

No one needs to go to university either. We don't need tens of thousands of history graduates every year. Why do we subsidize that? We are short of nurses, doctors, social workers etc.

We vat driving schools - no real choice about that - the UK needs people who can drive so don't see why if we tax private schools we wouldn't do the same for universities too.

They have the same corporate structures as private schools eg non profit making limited companies with some charitable status and endowments.

https://www.hesa.ac.uk/data-and-analysis/finances/kfi does what it says on the tin. Key Financial Indicators for every university and higher education providers.

How would that help? VAT would go to the government not to the universities.

Blimey, are people serious on here?

Private schools and universities are not the same.

And tuition fees should be free. Graduates generally get decent jobs and pay lots of tax over their lifetimes, so they pay for their education. No need for the ridiculous student loan system which is a confusing hybrid of loan and tax and achieves very little. A civilised country funds education properly, if only because having a well educated workforce is a good thing.

There aren't universal good quality free state schools available now. It very much depends on where you live ie postcode lottery

We absolutely need history grads. How can everyone study sciences? We need a balance. I would cull some humanities and arts degrees but keep the majority. We have too many courses accepting DDC or even 2 A levels. Some science courses are poor too.

There’s no reason unis couldn’t merge. Durham has a campus outside Middlesbrough. (Is it at Stockton?) Exeter at Falmouth. It’s perfectly possible. Newcastle could merge with Northumbria. Lots of options to merge and save.

Yet actually on paper universities and private schools are very similar. Like you say, a well educated population benefits everyone and up until now the status quo has been to not tax any form of education for this exact reason. Labour are scrapping that status quo so why shouldn't VAT be applied to other forms of "luxury" educating. Outside of doctors, dentists, vets etc no-one actually needs a degree

Outside of doctors, dentists, vets etc no-one actually needs a degree

What a short list you give. Since you refer to schools, do you not think that teachers should have degrees in their subject?

I said "etc". So obviously the list I gave wasn't exhaustive. Anyway there are plenty of teachers currently teaching subjects they don't have a degree in due to the teacher shortage issue.
No I don't think this is right but with VAT Labour are the ones undermining the principle that education is fundamentally a benefit to society.

I do know that is not why you started this thread

Why not do both? Raise fees and charge VAT too? Surely a win for the treasury and for unis?

Would it be a win for the treasury? Or would it just be an increase in the amount of debt written off at the end of the 30 years, given that the vast majority of students will never pay it back anyway.

I agree. I did a long stint as an admissions tutor for my (Russell Group STEM) School. We have only a few European students each year, mostly very strong students from Eastern Europe. Our biggest international cohorts are always Asian countries.

The Asian students are somewhat put off this year by the new visa regulation. In terms of fees, we need 3 to 4 home students to replace each missing Overseas student, depending on the degree programme. We are typical, I think.

Edit: Our biggest international cohorts are always from Asian countries

Er, they are being funded by people using them. I really don’t think you understand university funding.

You are free to move, as many people do.

If we're seriously talking about VAT and universities, extend the exemption to cover buying in of back office services. Then several universities could share a back office function and benefit from efficiencies of scale. But not an option
under the current tax regime as VAT would have to be charged and would cancel out any savings.

If universities charged VAT, they wouldn't get to keep the VAT, although they would be able to reclaim the VAT that they incur on their costs - but given that their largest chunk of costs is payroll, there's no VAT on that.

Having just shortlisted nearly 100 applications for a very very junior role, many of the applicants having multiple degrees and at least one PhD among them, but about 70% no work experience, it's confirmed my belief that way too many people do degrees these days, and a few less universities wouldn't be the worst thing in the world.

This would mean fewer university places would be available? With many less academic students guided toward vocational/apprentice training? Feels very limiting to me, but maybe you’re right and this is Darwinian thinning. Surely being such a rich country, we/those accessing the higher education services should be happy to pay more to have a diverse choice of universities/courses? Would closing failing universities risk further disenfranchising certain locations in the UK? Where there aren’t a multiple of university choices?

Thank you. Going to give this a long read.