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

Our local council already pays for taxis to get primary age kids to schools 5+ miles away. Adding 60 more taxis to that list will be horrendous for council finances (assuming 20% of independent school kids will move over to state). I don’t see a massive win for anybody in this…

Independent research suggests it would be lower numbers: Contrary to predictions of families quitting independent schools due to rising fees and moving their children into the already creaking state sector, the IFS said it expected higher fees would have “a weak effect” on demand, potentially reducing private school numbers by as little as 3% to 7%.

Of course any that do leave would need to be accomodated in state school as is their right.

As we know, parents definitely don't send their children to private school to buy privilege, but rather to selflessly spare state school the burden of educating too many children - but the parents can switch to state school guilt-free in these circumstances.

I expect they''d live with the increased numbers as undoubtedly under a labour govt they would get substantially more funding

Plus generally birth rates are declining so round here LAs are generally more concerned about declining numbers save for where there are new developments - but they get sizeable contributions from those towards expanding schools

And agree with poster above - I expect very few people send their children private with the primary motivation being to spare the burden on the state.

It is not the politics of envy. That is one common Tory attack line, and maybe you are a supporter of theirs, but what it actually is, IMO, is the politics of prioritising the majority and state.
I'm not a Tory.
I think Labour have it wrong and need to stop stoking division between working and middle classes with poorly thought through policies, and start presenting themselves as a credible government.

I don't buy the idea that Sara and Dave who send their child private are any different to Loretta and Pete who send their child to the excellent state option by having a house in catchment and topping up with tutoring and enrichment.

I'm deeply suspicious of any politicians who tell normal families, on a range of incomes, that they need to watch out for (insert chosen scapegoat group of choice) because they're the real reason why (insert systemic issue with public services here).

It's done because it sounds simple and pleasing and it's the sort of soundbite designed to avoid dealing with the real issues: that for decades public services have been deliberately ran into the ground and the priority has been the country's elite lining their pockets and laughing all the way to the bank at normal people pointing fingers at each other.

My understanding is that Finland, for example, does not allow schools to charge for the basic, mainstream education. Whilst private schools do exist, the state funds the basic element. Fees are charged on additional things. There would be an argument for VAT on those extras in the UK, where the state was funding the basic element. German private schools are also state subsidised.

Maybe the private schools will mitigate their rising costs by cutting back on staff, resources etc, which is exactly what state schools have to do

No, the charitable status is not relevant. The vat issue is separate and will affect all fee paying schools.

@Yolo12345 so therefore it becomes a race to the bottom. It really is only an exercise in making private schools suffer rather than about raising standards in state schools.
The better staff:pupil ratio is exactly one of the things we pay for.

@Oganesson118

The provision of education is currently exempt from VAT. Labour would like to change this so VAT is chargeable on the supply of education.

If not worded correctly this could have unintended consequences e.g. tutoring, music lessons, nursery etc. or even breach the human rights act right to education.

State education is falling apart at the seams because the government in power has deliberately underfunded it. Any reversal of that is in the interests of the whole nation.

Absolutely. However Labour charging VAT on private school fees isn’t going to make any significant difference here.

Where have Labour talked about how they will actually positively impact the state sector as a result of this? I can’t find anything.

Labour have said that they will use the funds raised (fairly optimistic calculations) to provide 6,000 extra state school teachers and mental health support. What they seem to have forgotten is that schools can’t even fill their current vacancies, let alone extra ones.

Where have Labour talked about how they will actually positively impact the state sector as a result of this? I can’t find anything.
It's all very vague so far and doesn't seem to address the retention crisis in teaching, that support staff can earn more in a less stressful job, or that services around children and families have equally been crumbling for years.

I don't envy them having to fix this mess, but it desperately needs fixing and getting the general public annoyed that some ordinary local families chose a local day school isn't going to fix it.

A 2% increase in funding to schools in real terms is the independent assessment the IFS made of the policy. Termed 'useful' given how tight the fiscal situation is.

https://ifs.org.uk/publications/tax-private-school-fees-and-state-school-spending

They will invest in the state sector - that is obviously positive for the nation's state schools.

6000 teachers that can’t be recruited in buildings that can’t be maintained and are too small/in the wrong location, combined with a ton of SENDs kids who will have to go back in the state system (as their parents often really can’t afford private as it is, but have to to get any kind of education - a fee rise will hit them hardest). Sounds like a great plan….

They don't have it wrong politically - only 18% of people oppose the policy. There is almost no opposition - they're not stoking division, because the public pretty much agree.

The vast majority of middle class families have kids in state school. This is about taxation and wealth, not class.

You will still be at liberty to pay for it.

It's not about making private schools suffer, it's about removing the VAT exemption that is only granted to essential purchases, to generate an additional amount of money in the system to benefit the nation as a whole.

@MidnightOnceMore these investments will take years, or even a decade to show any sort of effect. The negative effects will be immediate (a lot of extra pressure on the state sector, and the removal of all the free support from private to state schools, like usage of fields etc which for many schools is substantial).

20% of children at sixth form level go to fee paying schools. There are more than that that might consider in future going to fee paying schools. What Labour need to consider is those who might vote Labour who will vote Tory because of this but I imagine they have already considered it.

Also the state often does not spend money wisely - look at Birmingham Council and the corruption in relation to school transport contracts
https://www.msn.com/en-gb/money/other/the-64-938-27-question-for-bankrupt-birmingham-council-why-did-all-163-school-run-taxi-contracts-over-the-last-three-years-cost-exactly-the-same-authority-faces-new-quiz-over-cab-firm-at-centre-of-11m-over-payment-row/ar-AA1if44j?ocid=finance-verthp-feeds

"Birmingham Council has been accused of dodging scrutiny over claims it overpaid a school taxi firm £11million by publicly pricing all 163 contracts at exactly £64,938.27 - just low enough to avoid publishing transparency data.
This number was recorded as the price for every single deal the now-bankrupt city council had with every single taxi supplier, to every single school - despite the vastly differing work associated with each cab contract.
The £64,938.27 figure - branded as 'not credible' - was around £700 lower than the threshold at which public bodies legally have to publish tendering transparency data, such as the number of bids and award criteria."

@MidnightOnceMore if you have a chid with SENDs, it is quite often pay, or give up on education.
If paying (which we currently do) will become unaffordable I will raise heaven and hell that he’ll get the support he needs, which is about 1/3rd of a teacher’s time. I don’t care about any if the other children or the teachers. I won’t have to work full time anymore, so plenty of time to fight the system.

Nobody is racing to the bottom..! Private schools and state schools will do the best they can with their respective resources that's all. There are lots of small state schools with good pupil/child ratios. Some private schools offer lots of extra curriculars and sporting activities...they could choose to cut back rather than make parents pay more. You can start lobbying them along these lines if you have a parent council, for example.

L

Oh ok. I haven’t paid much notice, just assumed it was about charities being exempt from VAT.

If you read the IFS report (and it seems this is what Labour are relying upon according to Bridget Philipson - they aren't doing their own work on it) there's very limited data on which to predict the key question of how attendance might be affected. The relevant section is on pages 19-20 of the report https://ifs.org.uk/sites/default/files/2023-07/IFS-Report-R263-Tax-private-school-fees-and-state-school-spending.pdf

The main pieces of evidence are a 2010 working paper looking at ages 7 and 11 and then a 2009 US study on Catholic private schools. The paper describes the evidence as limited.

That's not a criticism of the report (it can only work with what's available) but it is a criticism of Labour if they intend to bring this in as fast as they can with no attempt to do any further research or consultation and no attempt to bring it in in a way that limits the impact on existing pupils (especially those in exam years). The manner in which they are pursuing this appears to be entirely for political gain. It doesn't bode well for serious policy making or for a party that can govern for the whole country.

@LolaSmiles - agree with every word.

This might be an enormously dim question, but given ‘this is about wealth and tax’, as one poster put it, why not tax the super/rich list level multi millionaires and billionaires at higher rates, rather than totally stressing out a family on, say 70k a year who chose to live frugally so they can send their SEN child to a private school, for example and have to pull out if fees go up? Just why?

@WrongSwanson you call private education ‘luxurious’, and I think your expectations for education are shockingly low. I was educated in a different country, but find I have to pay for private to get something similar to what was considered a fairly standard state option in my home country: reasonable class sizes (25 max in my state school), ready access to specialist intervention when needed (I had regular SLT sessions in school from y1), high quality enrichment offered by specialist teachers as part of the curriculum (in primary that meant art, drama, music and PE all offered as standard), readily available and easily accessible wrap around care, including school sponsored extracurriculars. There is slightly more gloss to facilities at my children’s private school, and they are definitely more responsive to parent concerns, but largely I find it meets the standard I would expect from a state school in my home country.

I think the uk state sector hide behind a very narrowly defined set of standards, align the totality of educational resources around those standards, and then think job done. Education should be so much broader, and it is sad that you would consider that a ‘luxury’. I don’t remember much about my core lessons from primary, but I do remember a great deal about art and music lessons, working with the class to assemble our own production of a play, doing gymnastic, special sessions in the dedicated science lab, etc. I want my children to have that as well, and I don’t view it as ‘luxurious’. I wish all children had access to that kind of well rounded, deeply enriching education, but a punitive tax on those that pay private fees is not going to deliver that (not that the kind of education I expect seems to be a priority when it comes to educational reform being discussed).

Because this policy appeals to the left wing without completing alienating the right, can actually be achieved and stokes the politics of envy voters.