If you have kids in private education, what is your school planning to do re VAT?

[Ladychaise]

I have two kids at a London independent school and currently just about scrape the cost of fees. Labour’s intention to add 20percent on the fees would make it impossible to keep them there, if all that cost goes to us - it is a worrying time.

The school’s bursar is being lovely but it’s very much a ‘let’s cross that bridge when we come to it’ take on it! I get that we don’t know for certain if Labour will get in or how fast they will implement this - but surely schools should be planning for this and working out how much of the VAT, if any, will be ‘covered’ by the school?

Aware there is a lot of uncertainty but does anyone else’s school have a plan in place? Thanks so much

You would have thought that they would have looked into it prior to announcing it as policy though!
That is a running thread through their policy announcements at the moment.

It feels like they're banking on winning because centre left and left voters will vote for them anyway, many swing voters have had enough of the Tories so will vote Labour, and then they're courting the votes of people who have the "why should someone else have something I don't" mentality.

As a Labour voter I was hoping after decades of austerity I'd feel excited by their offering rather than deflated.

For anyone who is interested in debating this with politicians etc please sign up to this zoom forum

Are any politicians actually joining the Zoom forum? It seems like a done deal already with Labour.

There are representatives from IFS and a former Gove advisor amongst others. The key is to really raise the profile and point out the unforseen (by Labour leadership, not the majority of people) consequences eg SEN, impact on state schools, inequality in state funding for North Vs South etc. Politicians will start engaging once enough noise is being made.
There are a number of back benchers who are starting to acknowledge the drawbacks of the policy.

I suspect the ship has sailed for lobbying impact, if ever there was a window. The policy has always been based on ideology rather than economics.

Of course it has but there was no point lobbying intensively prior to the last few months. The more the numbers are scrutinised the less they add up so this is actually the perfect time (run up to election when poiticians are most engaged with the electorate) to challenge and question. The more Labour candidates start to get pressure from constituents and across the electorate then the more chance there is of the leadership taking note.

With independent schools accounting for 7% of pupils and independent school parents generally not target Labour voters, I am not very optimistic. It is far from public outcry scale. Even if the policy has not had the requisite rigour in its formulation, the Labour PR impact will already have been well calculated. They will not want to U-turn on this. Best to hope for is a slower phasing in period. IMO.

It doesn't need a public outcry, it needs targeted lobbying to key people.

The % using private schools rises to approx 18% at 6th form level.
Of course they won't/can't u-turn and no-one expects that. The aim is for transparency from Labour and for them to acknowledge that it is highly unlikely to raise what they are forecasting. The ask is for the Labour Party to adopt an education policy that is consistent with the modern, competent, innovative future they envision. That means not harming children and families, not pitting working families against each other and not harming good schools.

I know the sixth form figures but that is only two years out of thirteen and these figures are distorted by pupils leaving school for colleges etc. so the 7% is more accurate and the overall referenced figure.

I am not clear what tangibles are to play for if you accept that it is a done deal and there will be no U-turn. An electioneering and incoming government will have much, much bigger fish to fry than this. I know it is an emotive topic but surely the best use of effort here is to accept VAT on school fees is coming and focus on contingency if needed.

@BotanicalGreen that's your opinion and obviously your perogative however some of us believe it isn't entirely futile and that there is an opportunity to do something. Of course we may be wasting our time but there is also a chance that we may be able to influence direction of travel, even if that is to put in a diversion 😊

@BotanicalGreen I think it is possible to contingency plan AND do what we can to apply political pressure to minimise the worst negative consequences. They may not back away from this entirely (though they have dropped several of their proposals over past year, so not unimaginable), but there is still a great deal to be confirmed: timing, whether imposed all in one go or in phases, final tax rate (could be lower than 20%), how SEN is handled, what aspects of private school are taxable (food, extracurriculars, boarding, etc.), and so on.

It won't only affect people who send their children private

I posted the below earlier on the thread so apologies for repeating myself but I think it's important and it would be good for state sector parents, particularly less wealthy ones, to be aware of the likely consequences.

Families will be priced out of 'good' state school catchments because wealthier people who can no longer afford (or justify) the expense of private schools will buy houses near the better state schools.

This already happens but it will get worse. Less wealthy families will be priced out even more than they already are and get stuck with the 'crap' state school in the cheaper areas

@blueamulet the issue is that no one really knows what will happen. That rests on people's behaviour combined with many other factors (grandparent money etc.) and it is all quite unclear what the actual fallout will be.

I have no skin in this game as my own DC are now at University but I do have a lot of years of relevant professional experience to this. The reason I commented was because it is clear that there are parents on here who are really worried about meeting fees, particularly with VAT increases and I feel sorry for them and for the DC. I understand the desire to make some noise around it but just hope people do plan for the worst case scenario.

The "general mayhem" that occurred in Greece when they tried the same policy is also discussed in detail on p31-32 of the Adam Smith paper. The EDSK and Adam Smith papers agree on many points: the suggested amount in excess of a billion projected to be raised is unrealistic and the true figure is likely to be far lower; the policy could even lead to a net loss to the exchequer. The Adam Smith institute also project 5000 teacher redundancies from closing private schools.

At the school DC is at, I have never seen parents so disgruntled about fees. There is a whatsapp with roughly 40% of the parents already coordinating letters to the governors because fees have increased 20% in two years. Another large rise will be the straw that breaks the camel's back. Locally, I think we will see far more than 3-7% reduction that the IFS has assumed, and a couple of the local preps will almost certainly close. The central estimate of the adam smith paper of reduction by 10-15% in pupil numbers feels about right.

I am opposed although a state school parent. Pretty clear to me that this could affect my youngest and many of her friends if they don’t get top grades at GCSE. Sixth Forms are selective and private school students can easily move then.

However, I am just morally massively opposed against them attacking kids and the education sector in this way. We already had Covid and a terrible time for kids. Why are they not charging VAT on luxury care homes!! This policy is discriminatory towards children and parents when we already have a falling birth rate. It isn’t going to raise cash for the state sector- it will only cause further harm to education as a whole.

I cannot understand the logic of wanting to disrupt children’s education. Whether someone agrees with private education or not is irrelevant. The reality is that some children will be forced to leave and go to a new school. These are children who had huge disruption with covid, many of whom now have mental health problems (in the private and state sector). Those in the private sector are often those who struggled in the state sector. Imagine the uproar if children in the state sector were suddenly forced to switch schools, sometimes at crucial points of their education.

If it was going to raise lots of money, I could almost understand it. It’s not though. It’s about punishing parents and children. I genuinely believe that many in the Labour Party would vote in favour of this policy even if it produced a net loss; their hatred for the system is that entrenched.

You are correct about sixth forms as well. Schools are measured on exam results. What sensible state school isn’t going to choose those pupils with the strongest academic record? Grammar school heads are already warning about the effect at age 11. The same problems will arise at 16.

I think that a lot of those in favour of the policy, those who say “switch to the state sector”, are those in the fortunate position of being able to access excellent state schools. Vast swathes of the country are not.

It’s a minority so they don’t care. It’s popularity politics

If they said they were going to tax the hell out of SUVs, beer or cigarettes they knew it would massively unpopular by most people.

It's not because it's a minority that most people don't care.

It's simply the case that most people aren't going to get overly concerned about a policy that might mean that some exceptionally privileged young people become very slightly less privileged or that some relatively high earning families will need to pay a bit more in tax in order to maintain their current lifestyle choices.

For lots of people, there are simply more important things for them to care about.

@BotanicalGreen I feel bad for those parents too. I used to work with someone who moved back in with his parents instead of buying a small home for himself when he got divorced. He did this so he and his ex wife could still afford to pay the school fees. They didn't want to pull their DC out of their private school mid-education, particularly when their lives were already going through upheaval.

However, and this is also in reply to @Medschoolmum I'm concerned about the consequences for less wealthy families, who already get priced out of 'good' state school catchments. It might vary across the country but it's definitely a thing where we live and I suspect it will happen even more than it already does if Labour go ahead with their plans.

You're right we can't know for sure what will happen but in my opinion it will increase inequality between different state schools.

So I disagree that it's about making some exceptionally privileged young people become very slightly less privileged orthat some relatively high earning families will need to pay a bit more in tax in order to maintain their current lifestyle choices. (And it won't affect the most privileged. They'll still be able to afford it. I doubt too that Labour MPs will be affected. If they don't go private, you bet they'll make sure they're in the right state school catchments).

That's the problem...the vast majority don't realise and understand the knock on effects of the policy.
It's not a case of "an extra 20% on a super luxury car, good!, doesn't affect me, who cares?"
This policy will be detrimental on the education system for EVERYONE.

It's simply the case that most people aren't going to get overly concerned about a policy that might mean that some exceptionally privileged young people become very slightly less privileged
As several of us have already pointed out, many kids are in the private sector because for various reasons either the kids couldn't cope in the state sector (due to SEN / anxiety/ mental health/other) or the state sector chose not to cope with them. A large number of others are on bursaries. Neither group are exceptionally privileged. Yet they're being lumped together as if they're all upper class toffs at Eton.

or that some relatively high earning families will need to pay a bit more in tax in order to maintain their current lifestyle choices
and as several of us have pointed out, many people's finances are at breaking point. Removing their children from private school won't be a choice but a necessity. In reality what this means is that a child who is happy and settled, with a secure friendship group, may be pulled out of a school that was working for them and forced into somewhere unsuitable or with a long commute because local options may be limited. Even if parents have budgeted carefully, this may still happen, because a whole school may close. Children in nearby state schools may also be adversely affected because the closure of a nearby school may inundate the school with new children, a lot of whom may be unhappy about being moved. Thousands of teachers will also face redundancy.

This will hit middle earners who are already stretched to the limit hardest, including teachers who can currently just afford to send their kids to the school they teach at due to staff fee discount (which are likely to dry up, along with bursaries, to mitigate the VAT impact). The "exceptionally privileged" won't even notice the difference.

It is important to grasp that perception of the potential fallout by the electorat is what really counts here and at this point in time that is generally considered to be negligible. This is because the private sector is considered to be small and money buying good catchment places is not a new issue at all and no government action has been taken against that, except for a dabbling in postcode lotteries for school places, where the practicalities didn't always match the ideology. Private school parents using this as an argument will not really hold water as people will ask why it is so significant now when it has been around for a long time. Grammar school impact is questionable too. Apart from super selective grammars in places like London where competition could become a bit stiffer for the very middle class and tutoredDC who tend to fill them, in Grammar school counties, it tends to be that the less bright end up in independent schools when they fail the 11 plus so nothing will change that much there in terms of intake.

The crux is that the general electorate don't care enough about this policy for it to be a political hot potato, particularly against the backdrop of major issues, both domestic and international, such as a huge cost of living crisis, Ukraine and Gaza.

I am not saying these are my views. I am saying this is perception and perception trumps reality all the time in politics.

Well, I understand that that's what you and many other private school parents might want us to believe. And that, of course, you're keen to emphasise that this is all about your concern for disadvantaged children in state schools rather than an extra 15% or so on your school fees.

It isn't that I don't understand your argument, I just don't agree with it. I don't think that many private school parents will actually leave the sector, and I don't think there will be a negative impact on the state sector overall. Yes, there will no doubt be a trickle of children who move from one sector to another, and I'm sure that their parents will do everything in their power to support their transition. I guess time will tell.

I cannot understand the logic of wanting to disrupt children’s education. Whether someone agrees with private education or not is irrelevant. The reality is that some children will be forced to leave and go to a new school. These are children who had huge disruption with covid, many of whom now have mental health problems (in the private and state sector). Those in the private sector are often those who struggled in the state sector. Imagine the uproar if children in the state sector were suddenly forced to switch schools, sometimes at crucial points of their education
Same here but there's a proportion of the electorate who are foolish enough to fall for any "look over there another average citizen has something instead of you" rhetoric.

It's why this policy has been proposed.
It's why the Tories managed to market austerity and cuts to welfare by presenting welfare as hand outs to lazy people instead of a benefit to companies who don't pay a wage big enough to live on.
It's how some parts of the press tried to undermine worker wanting fair pay and conditions.
It's how right wingers were able to suggest that immigrants are the reason for failing services, low housing stock, GP waiting lists.

If you keep all the normal people fighting then you can get a rush to the bottom and the people at the top can laugh all the way to the bank.

@LolaSmiles sadly I think you are right. After the complete cons that were the "big society" and "levelling up", how sadly predictable that the best that Labour can come up with is levelling down.