If Labour win... are your DCs coming out of Private Education?

[MrsJamesMathews]

Sitting here doing some maths.

It's not looking great.

With increased corporation tax and VAT on school fees, I think we'll be having some very awkward conversations with our DCs schools on Friday.

Anyone else worried?

Yes - we have even had the MP on the doorstep - that's how marginal we are!

Like pp we have worked out our finances and could just about cope with a 20% hike. If the school closed as a result of people being unable to afford the hike then yes I would send dd to a state school. Again as pp have said the effect of a net move of dc into state schools would I believe have a negative impact on schools that are already struggling. It really is a no win situation and rather ludicrous a bit like Donald Trump and his wall. Role on Thursday it is going to be an interesting day

I live in the constituency of a (recently) prominent Tory thrust into the limelight to stand in for her boss. It should be a safe Tory seat but... there's lots of talk here that she could lose her seat not least the debacle surrounding the hustings the other night when we asked the Chair to remove her opponent for asking sensitive questions. Plus she was somewhat rude when discussing some of her constituents. I'm excited that it may be close as being in a marginal is a little thrilling. Before this we lived 'Oop North' in George Osborne's very safe Tatton seat so no thrill there.

people who insist that they are going to flounce overseas "if Trump wins/if we leave the EU/if Labour raises my private education expenses" etc. etc. are usually talking bollocks.

Source for this piece of wisdom please Stickerrocks? Or is it just personal conjecture?

Also I think you'll find you're very much mistaken in your belief that "The policy will be largely irrelevant to a lot of people potentially affected, as they will be able to afford the fees regardless of whether they rise by 20%, 10% or 0%. "
This is the classic socialist misbelief that all private school parents are rich, loaded landowners with huge pots of cash floating about so that they won't miss a few £100k here or there. Apart from perhaps the very elite public schools (Eton etc) I'll think you'll find this to be a very ignorant stereotype. Many of these families are part of the squeezed middle classes who make choices and sacrifices to send their kids to their schools. Holidays, cars, eating out may all be prioritised lower than education. So it WILL make a real difference.

"Classic socialist misbelief that all private school parents are rich, loaded landowners with huge pots of cash floating about..."

@Jng1 Surprisingly few people think they're rich! But those who can afford to pay an average of £14,102 per year, with fees that have outpaced inflation to rise by over 70% since 2004, are certainly in the lucky minority. (Reference: www.telegraph.co.uk/investing/funds/five-ways-to-meet-the-156653-cost-of-private-school/)

I don't think these are signs of a price sensitive market.

I went to independent schools, and I will consider sending my daughter to independent schools, and I know a lot of people who send their children to independent schools. None of us are poor. I would venture to say that we are, either by our own merits or through inheritance, pretty well off. I'm very much on the poor end now and live in tiny flat in a council block, but I'd still prioritise education and I'm thankful that I have enough 'give' in my life (even if it means extending the mortgage, or asking my dad for help) to be able to afford it.

Private schools are often registered as charities and I sincerely hope that they can step up to the mark if this happens and affects children with SEN whose parents are genuinely scrimping and saving to send them. Otherwise frankly their charitable status should be removed (which is another argument in itself!).

"Britain's independent schools are “divorced from normal life”, Theresa May said yesterday as she warned they must do more to help children from poorer backgrounds or face losing their status as charities."

And this "her education policy also included surprise proposals for the reform of private schools, which Mrs May suggested had become increasingly focused on attracting wealthy foreign children."

From just last year -- www.telegraph.co.uk/news/2016/09/09/theresa-may-takes-on-private-schools-as-she-warns-institutions-m/.

Gilly,
The stats that get mentioned are 7% of school age children, 15% of sixth form aged children and slightly more than 15% of children at some point in their education cycle (so for example in grammar school areas some children might be in a private school for Y3 to Y6). These percentages haven't changed for years despite fees outpacing income increases, so my suspicion is that they are out of date and the percentages are lower.

NotMy Penguin - yup. May is also anti independent schools and her ideas on how to make them more accessible (more bursaries funded by fee paying parents) will probably only make them less accessible. The real answer would be to engage independent schools in a discussion on how they intend to remain affordable for people who live here and pay tax. I would suggest two level of fees - one for people resident in the UK for tax purposes and another for international students who are benefitting from a British education but whose parents are not contributing towards the taxes required to ensure there is reasonably equitable opportunity for all children educated in this country. The top up they would pay would be split between the provision of bursaries at the school in question and the provision of education in the state sector. Schools fees in some other parts of the world make even the most expensive boarding schools in the UK look good value.

NotMyPenguin - parents generally know, when they commit to independent schooling, whether for primary, secondary or both, that they are in it for the number of years of that part of education and they plan accordingly. We looked at historic fee increases and built in an estimated 11% increase per annum. A further 20% VAT increase is a HUGE amount above that estimate, and all I'm saying is that I believe it WILL be enough to change behaviour for a large % of independent school parents, so we will have to agree to disagree about whether the market is price sensitive or not.

Of course as someone said down thread, this is not really about raising revenue, it's about Corbyn's outright opposition to selective education per se. Interesting that he and his second wife fell out and divorced over the issue - and sent their son to a selective grammar!

May's proposals were also awful but the manifesto is much more wishy washy on it "We will work with the Independent Schools Council to ensure that at least 100 leading independent schools become involved in academy sponsorship or the founding of free schools in the state system, keeping open the option of changing the tax status of independent schools if progress is not made." so not suggesting an imminent rise in fees.

Why an independent school should be any good at founding a state school is beyond me but at least it's all quite vague and longer term.

And this "her education policy also included surprise proposals for the reform of private schools, which Mrs May suggested had become increasingly focused on attracting wealthy foreign children."

Surely this only applies to large public boarding schools. Not the independent day schools in areas outside the SE where you have a great many parents who are living off one wage and using the other to pay the 25kpa it is costing to put 2 children through independent senior school.

In 2014 an independent consultancy analysed the economic benefits that independent schools bring to Britain.
It reported:

• An annual contribution to GDP of £9.5 billion – larger than the City of Liverpool, or the BBC
• More than 227,000 FTE jobs in Britain supported by ISC schools – one for every two ISC pupils
• More than £3.6 billion in tax revenues flowing into the Exchequer each year
• Annual savings for the taxpayer of £3.0 billion – equivalent to building more than 460 new free schools every year

That's a lot of jobs and tax revenue to be replaced if schools go under. Many mid-range independent schools are already operating on margins with a fall in pupil of just 2-3% sending them under. I have seen two local to us disappear /merge in the last 5 years.

Wrong quote highlighted, I'm afraidJng1. I'm more concerned about your hand-wringing than your flouncing. Not a single one of those I work with has expressed the slightest concern about the possibility of a VAT increase, perhaps because we all appreciate that schools will have to absorb some of the increase themselves as we're accountants. None of them are going to up sticks and move overseas either as they prefer a life with friends and family than becoming a migrant worker with all the insecurity that brings.

Stickerrocks - yes, sorry, it was another poster's quote.
Well, no hand-wringing here, but you obviously work with richer folk than my friends and colleagues as there is real discussion of 'plan Bs' going on here...but I never mentioned moving abroad I don't think - not an option for us due to care issues.

I genuinely think that as We're all within the accountancy profession, we aren't phased by a notional vat increase. Yes, a major cost (staffing) is outside the scope of VAT, but other costs are recoverable. If they treat schools like any other business becoming VAT registered, there will be the opportunity to recover VAT on capital expenditure incurred over the preceding 4 years as well, which would provide a bigger buffer for current pupils before the full cost has to be passed on.

I still believe that a hike in interest rates is a greater threat to whether many will continue to see private education as an affordable luxury.

His second wife? I thought it was his first and only wife?

He's on number 3.

Wife 1 is a Labour Party member who said she didn't vote for him for the leadership!

i'm not sure why we have to pick one cost rise to worry about in our Corbyn victory scenario. I've got the following concerns personally and in ranked order of worry:
-concern about interest rate rises
-concern about min wage pushing childcare bill up for holiday clubs, after school clubs and nursery - I'm assuming the min wage hike kicks in before any free hours DC2 will get or be able to get a place for!
-concern I'll lose my job due to the plug being pulled on the already not profitable EU bit of my US firm if their EU costs go up further - corp tax, min wage rises
-concern about council tax going up
-concern that income taxes will need to go up much more than stated now and in the future.
-I'll have to keep saving for free university because that's a policy that'll be repealed by the time my 6 and 2 year olds get there!
-definitely private school will be out (oh woe for me and my over-privileged DC)

Isn't hard Brexit likely to cause an interest rate hike already though? But have to say, the interest rates I've had all my adult life are so low that an interest rate rise doesn't bother me really. I've purposely not moved to a bigger house - even though we could do with one - in anticipation.

My biggest financial concern is Brexit and I want as soft a landing as possible but it's impossible to tell who I could get that with as May and Corbyn are both being cagey. So I'm voting based on schools, welfare and the NHS this time round.

Sadly I think even if Labour get in (which is unlikely), improvements in education will take time. The senior school that is available to DD2 (currently year 5) is not going to meet her needs at all, she wouldn't get a scholarship/bursary, and I can't afford full fees for the nice little independent school she'd thrive at. (I stupidly looked around it, gah.)

So, gulp, home ed is looking like the only option.

"Interesting that he and his second wife fell out and divorced over the issue - and sent their son to a selective grammar!"

One battle that JC obviously didn't win.

"Many of these families are part of the squeezed middle classes who make choices and sacrifices to send their kids to their schools"

The average U.K. salary is under 30K.

Average earners would have to give up eating and living in a house to afford private school fees.

Many of these families are part of the squeezed middle classes who make choices and sacrifices to send their kids to their schools

And I hope whoever said that (losing track!) doesn't think that people who are not wealthy enough to afford independent schools aren't making choices or sacrifices for their children? We all do that! It is like the rather pathetic "I earn lots of money because of how hard I work" line.

If those building projects are new buildings there won't be any VAT to recover though. And how many school can afford sizeable building projects these days that would be enough to offset the output VAT they are charging on fees?

minifingerz One of friends at DS's independent school - parents each earn below average UK salary, c. £22k. As their household income is below £50K they are eligible for a bursary help for about 2/3 of school fees, but it won't take much to make the £5K a year they pay unaffordable under Labour...

If those building projects are new buildings there won't be any VAT to recover though. why is that Jackie? Genuine Q, I don't know much about VAT and reclaiming it.
Certainly both of my children's schools have major building projects that they have been saving for and would be doing in the next c2 years (new blocks, sports centres etc). When we've looked around senior schools recently most have new science centres, sports facilities, 6th form blocks going up.