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

Except it's not actually going to reduce the shift from private to state, since families who are only just managing to pay fees aren't going to be at Eton, they're likely to be at smaller regional schools which will have to introduce new bursaries - which will increase their cost exactly the same as VAT would.

So...

• it would reducing the financial upside - since schools like Eton already have those bursaries and won't be subject to any increase

• it would shift some of the remaining financial upside: some non-Eton-like schools will add some extra bursaries instead of paying VAT, which means there will be even less VAT income to fund the extra state teachers they've promised. I mean extra bursaries are lovely, but if that's what you want to use the VAT income on then re-introduce assisted places so that you actually have control over it
• and it wouldn't reduce the shift from private to state - which damages both sectors as well as reducing overall UK educational investment (investment by private school parents into their own children out of their own taxed income)

AND as @MisterChips said, it is a regressive tax, which taxes wealthier people less:

VAT-free education if you go to Eton, because the endowment "does" your bursary obligation. VAT-charged if you're at a marginal school in Staffordshire with no wealth

It's a terrible idea!

I can't understand why the government isn't using the schools and boarding facilities to accommodate children in the care system. I know it has been trialled before but I haven't seen much on the follow up data? If every child is costing £281k per YEAR, this is surely a no-brainer to save money for the state sector and utilise private schools at the same time? Dd's school have many children on full bursaries already.
https://amp.theguardian.com/commentisfree/article/2024/may/18/child-care-cost-year-wealth-funds-councils-britain-residential

Children in care are an exceedingly vulnerable group and nearly always come with a complex set of issues are a result of the reasons they ended up in care. A standard boarding school would be very unsuitable for nearly all of them. Also the aim is normally to put these children into a family setting - either their own extended family or foster families, or to try and enable them to return to their own family, not to place them in an institution you years.

On the other hand, many children with complex disabilities/SEN needs do go to boarding school on up to 52 week placements. These generally cost local councils well over £100,000 per year and with VAT will add another £20k+ to council costs,

Because many of these children will have many many complex mental health issues/trauma and learning difficulties. It would not be fair of the child for them to be essentially plopped in to a system that wasn’t designed to specifically help them.

For some children, the state does already choose to pay their fees at private school: if that's the most effective way for them to fulfil their obligation to meet that child's needs.

But for many children in care, boarding schools aren't really a good fit - due to the children's complex needs, trauma, and most schools only running term-time.

I don't really see how that relates to VAT.

Unless you're suggesting that schools should board and educate children in the care system for free, just because that's what they do for fee-paying children? As some kind of 'making up' for education being exempt from VAT?

That would make just as little sense as reducing benefits and instead requiring supermarkets to set up and supply food banks to make up for the fact they sell food (which is sold without VAT).

Again, it's lovely for supermarkets to donate to food banks. But it's a government responsibility to fund benefits out of fairly and consistently applied taxes: not the supermarket and certainly not individual people buying food for themselves.

I took my figures from the 2023 ISC census; as the PP was talking about specifically about bursaries, I discounted the 61,000 non means tested scholarships and the 75,000 non means tested eligible families funded by the schools (24% of all pupils), and the 22,500 early years funding and 6,000 LA and government funded places that are not funded by the schools (5.5% of all pupils).

That leaves the 40,000 means tested bursaries, 2,000 means tested scholarships and 2,500 means tested eligible families (HM forces, staff, clergy etc) that are funded by the schools themselves - which gives the 8% figure.

This.

Our school is splitting out every element that is VAT free and invoicing it separately. Food, transport etc.

Some activities are being provided by the PTA (a charity) rather than by the school (a charitable trust).

They are working hard to minimise the impact. as far as possible.

Don't vote labour.
Leave the uk

That makes total sense. I imagine we might also see an increase in state-school-using parents making use of afterschool/holiday services provided by private schools, esp if things like bus services can be provided.

Because labour have spun the narrative perfectly.

They have called it "an end to tax breaks on private schools"

whereas actually it is:

"A tax on education"

Is falling birth rates really the case? The population of the UK will hit 70m in this decade...

Yes - there was a bulge of births in the cohort which is currently in secondary, but it drops in primary and is expected to keep dropping.

https://www.ons.gov.uk/peoplepopulationandcommunity/birthsdeathsandmarriages/livebirths/bulletins/birthsummarytablesenglandandwales/2022refreshedpopulations

I posted in another thread...the math ain't mathing...

Given that every other demographic prediction about the UK has been spectacularly wrong, this one will be too.

We're going to go from 62m in 2014 to 70m by 2030, but will have less babies?

I can't quite make it work either!

Current population is 67.7 million, and net migration is 670,000 (1%) each year.

So in 6 years time, based only on migration we'd have a population of 71.7

So the lower projection would tally with 280,000 more deaths than births per year.

BUT:
In 2022, births and deaths seem balanced: 650,000 deaths and 695,000 births in the UK, although that's because there was excess mortality from covid.

This chart shows how we used to have more births than deaths (because of lengthening lifespan over the last few decades) but that's about to switch around (presumably because lifespan is no longer increasing so much - and may even be dropping - so the lower-than-replacement birthrate is now more significant than the lengthening lifespan?).

https://www.icaew.com/insights/viewpoints-on-the-news/2023/oct-2023/chart-of-the-week-uk-births-and-deaths

It will have to be quite a sharp change to reach that number!

It's just about plausible, but I don't really know!

Add in that a growing sector of UK society (somewhere between 5-9%) have on average 4.1 children too...

That will be included in the 1.5 average birthrate. I suppose that could slow or reverse the dropping birthrate if those children continued the same higher than average rate.

But if that sector of society are recent immigrants, then it's likely to go closer to our norm over a couple of generations with security of income and some assimilation of our cultural attitudes. And especially with increased education and employment opportunities for women - that's been consistently shown to make a huge difference. As soon as women have options, birth rates drop.

I think the evidence suggests that 78% don't assume cultural norms - assuming that means women that work

I am not sure where this news about Eton not passing on VAT is coming from. I have a child there and the provost has not at all confirmed the school's plans so far. What is confirmed is a material fee increase for next year