Is anyone else worried about the effect of rising private school fees on state schools?

[BabyIcecream]

Where I live there already aren't enough school places. Three big state secondary's, one is catholic, they are all over subscribed and bursting at the seams using old buildings with not enough funding.

Ive seen reports that at some private schools upto a third of pupils might leave if the fees go up due to VAT.

I'm worried about all these extra pupils needing places, DS already finds his school overcrowded and whilst I don't agree with private education putting extra pupils into the state system is just going to further disadvantage our children.

Unless money raised by increasing private schools costs is going to be used to fund state education? Does anyone know?

Luckily, we don't notice school fees going out of our account. Selfishly, it would be great if the fees go up and up so that the competition for highly oversubscribed schools become becomes less for my own DCs.

The crude calculations used to estimate the amount of VAT which would be raised, as far as I’m aware, are based on VAT being charged on fees as they currently stand. At the moment those fees often include things which are provided by third parties (extra curricular activities). The point is that those could be separated out from the fees and would then not necessarily be subject to VAT.

@BCCoach - I think what I am trying to say is that a lot of services private schools provide are actually ancillary to Core Education. Things like specialist Art classes, Lamda, Specialist Hockey/Football/Swimming/Tennis, French and Mandarin in primary, Computing, weekly Drama classes. Multiple Foreign Languages, Debating Clubs, millions of other types of clubs like Photography.

People pay up for private school to get this currently and it is currently passed on as school fees, because currently that is the easiest way to do it. However, it is actually ancillary to core Education, much of what they provide. A lot of this stuff is provided at lunch time, before school hours and after school hours.
The stuff the rest of us drive our kids around for.
And because private schools do not even have to follow the National Curriculum what is going to stop them from providing the very basics as vatable Education (once it is no longer exempt but rated at [20]per except for “eligible bodies” that can provide it as zero rated. And somehow eligible bodies will exclude all types of private schools (again bearing in mind the different legal entities they can be) but not state academies and universities and specialist music and performance colleges and SEN schools. And somehow kids with EHCP will be zero rates, including those privately diagnosed (not even considering the impact of floodgates to seeking a diagnosis). It is a complete minefield. And will have all sorts of confusing impacts for smaller businesses providing similar services. Who is going to pay for their tax advice?

@Dibblydoodahdah after school care is VAT-exempt if it is for welfare purposes (e.g. wraparound care), and VAT-able if it is activity-based (e.g. after-school football club). I'm sure the school's finance department will cope.

The point is that the Labour Party haven’t taken this into account. They’re assuming they can just easily add VAT to fees as they stand. Those fees aren’t split out at the moment - they could be. This reduces the amount of VAT which would be raised.

A lot of parents in the state sector as well as private sign up to an activity club at school and use this as wraparound care as their child prefers the activity to whatever they do in wraparound and the timings match up. What about the unintended consequences on all working parents for this?

It is extremely worrying in general if they want to start charging VAT on children's activities and this will disproportionately affect state educated children more than private

@Araminta1003 I don't think any private school is going to go to the trouble of setting up contracts with dozens of independent external providers to teach Art and Computing etc (which are core syllabus in any case). For a start, it would massively undermine their brand: why should I pay £10k a term to St Cakes only to find that all the lessons are being contracted out to random third party providers? And they would have to be demonstrably independent suppliers, with no organisational or financial links to the schools they provide services to (and one of the tests that HMRC would apply is that they would need to have multiple customers) otherwise it would be a clear case of business splitting.

It's not going to happen.

It’s not about the school’s finance team coping, it’s about whether VAT is going to be charged on all of these services, the legislation needing to address that and whether Labour have actually taken this into account when calculating their £1.7 billion.

@morechocolateneededtoday - this is the rule as it stands today. You are already paying VAT on afterschool activity clubs (if the provider is about the VAT threshold).

I don’t think that they have taken it into account from what I’ve read. There is also the question over which parts of boarding fees would fall under a VAT exemption. Transport services are zero rated. It’s really not as straightforward as they seem to think.

@BCCoach - well I think they will do precisely that, especially in places like London. So and so famous artist provider club whose customers are all these private schools. Rather than downgrading their brand, they will find ways to upgrade it. Whilst the rest of us get stung and the politicians and HMRC lag 3 miles behind them.

The fact that children’s after school swimming lessons and sports clubs may attract VAT when state schools do not provide enough PE lessons to keep children fit and we have an obesity crisis amongst children and an NHS (which means bad health is a huge long term cost for all) in itself is outrageous. This is where Labour need to put their energies, not some hate policy on the few who were always going to be fine anyway.

I have 2 kids at private school and I can tell you there WILL be a mass exodus! The majority of parents we know cannot afford the rise in VAT and will be too stretched to manage it. The people who will be able to stay are the ones with massive inheritance, super wealthy so all the relatively normal ones who either have made sacrifices to send their kids there (for whatever reason you may or may not agree with) or who have highly but not insanely paid jobs will have to leave.

There are no places in the state schools round us so not sure if Labour is planning to build more schools (and therefore defeating the object of saving money), cramming loads of kids into existing school (affecting the state school kids and education of all kids not to mention welfare of teachers) or do they expect working mothers to pick up the pieces, drive their kids miles to random schools or home school their kids as we did through Covid… of course it’s the mothers who will end up picking up the slack.

In the meantime there will be even more disparity between the private and state schools as all privates which have families from relatively mixed backgrounds will become like Eton/ Harrow and be reserved only for the super wealthy/ international students!

It's amazing how honest people are not about money. I suspect people will 'find' it from somewhere.

NOt currently but it was not so long ago until the government realized though it was politically expedient it COST them tens of millions!

I already pay for two state school places I don't use through my taxes, thank you.

That is an odd way of thinking of things.

This month I reckon I have paid for 8 endoscopies i havent used, 4 books in a library that i havent read, a reponse to a car crash i wasnt in and for some dinner in the houses of parliament i didnt eat.

@Spendonsend I don't think it's any odder than @cupofdecaf happily spending more of my money for me on school places. I'm proud to pay lots of tax. It means I'm earning well and I'm paying a lot into the system to help others and provide services we all benefit from but my pit is not bottomless.

I agree it is very easy to spend other people's money!

The state education system has failed. It isn't an 'education' system at all. It's part of the social care and indoctrination system. Astonishing numbers of children have mental health issues and SEN including significant behavioural issues. The family is considered bad by the state and by woked up state school teachers so you will not be told if something happens to your child.

Private schools are good because the family is the customer, not just a cog in the machine. People will continue to pay for this and if they can't they will expect state schools to provide the same kind of service.

The idea that state schools provide some kind of equality of opportunity is a fallacy. They go to school for 32 weeks a year for 6 hours a day. There's so much other stuff that happens in the lives of children to make life unfair.

In comprehensive schools you still get total educational apartheid. Top sets are full of children from two parent families with a mortgage. Bottom sets are full of children who are looked after, have SEN or are from dysfunctional families.

Also, the GCSE system requires about 50% of children to get a fail grade. The grades are awarded based on a normal distribution graph. Half of us send our children to school when they're five knowing that they can't and won't achieve pass grades in their GCSEs in 16 y years time. What's the point?

The people bleating about how bad private schools are just want to prop up a system that is inherently unfair.

The difference is that you’re not being penalised through the tax system for not using the NHS, as an example. By proposing to add VAT to school fees, you are effectively penalising someone for not using the state education system. No one is asking for a credit for the amount that it would cost the state to educate their children (although interestingly, several countries do this). They are simply saying that they shouldn’t be hit with a tax charge when, in effect, they are saving the state system money.

I can't tell if you're being critical of people wanting the best for their children. I live in a district that has excellent schools and NO teacher's unions. Some people do send their children to private, but most send them to the public school. As a result, our public high school is one of the highest performing in the state, because the parents are involved and interested in their children's future.

So if i buy a bicycle i should avoid VAT on that bike because i'm not wearing out roads or polluting the air with a car?

How private school fees have escaped VAT for so long is a mystery to me.

The parents have the choice to use state or private, can't compare to the NHS as NHS treatment often isn't available for many months, sometimes years, some people simply have no other option.

I think another reason why people will leave private schools with this increase on top of the hefty annual increase this year is that the schools just won't be value for money any more.

The school that one of my DC is at is good but it still has its issues. With an additional 20% on top I am not sure it will be worth it.

I was with other private school parents earlier and the conclusion seemed to be to leave at a natural point eg yr 11, put them in state and then pay for tutoring on top.