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

Those aren't the things that I am referring to though. Decent facilities and decent education etc I am happy to put in the education box.

But it's the glittering unnecessary nonsense, vast grounds, etc etc that aren't necessary and can only be interpreted as luxurious. I realise some private schools run on a "pared to the bone" model. But we can't pretend there isn't also the pony riding/yachting/Olympic facilities etc end of the spectrum, and everything in between. And let's face it, they are often stuffed with fantastically in wealthy overseas students (the homes of some of my peers were staggering and that was 2 decades ago) - why shouldnt they be charged VAT?

@yoube12345 - but if we are talking about ‘alienating’ voters in that context, then surely this is a far greater risk?

Broadly speaking, the billionaires won’t be voting labour anyway, however - many left leaning people, myself included, will not be voting labour this time because of the school fees threat. So they are losing actual voters over risking alienating those that wouldn’t vote for them anyway?! Makes no sense…

@WrongSwanson so charge vat on pony club/ yachting and leave education out of it? You are describing extracurriculars that you view as excessively high end, though where I live many people in state go the pony club route, and sailing lessons are very readily available at the local marina. I am not aware of any private schools that feature ponies and yachts ahead of a solid core educational experience.

I won't be either but I think we're in the minority! (Just look at mumsnet!)

I don't view the activities per se as excessively high end, it depends how they are done. But you are right.i think the solution may be to split out the "core education" element from the "luxurious add on" element and charge VAT on those bits. But we need to stop pretending there isn't a luxury element to many of the richer private schools.

I sailed and rode ponies etc and so do my children, but I also work in the real world and know that most people would absolutely view these activities as luxuries.

Most independent schools raised fees by 10% last year and there was not a noticeable reduction in numbers.

Realistically if this comes in what they've got to do (and let's face it Labour are actually working on the basis they will do this as they actually want all these kids to stay at private school so they can get this VAT) is to try and spread out the 20% over a couple of years

So for example, Year 1 they reduce fees by say 10% (£1000 to £900). They could do this in part by offsetting vat on expenditure (I can see a lot of schools actually pushing forward with big capital projects to do this, probably sense to see if they can borrow at rates much lower then 20%), worst case scenario some redundancies (possibly larger class sizes so 2 forms rather than 3). VAT then is put on fees and so they will be £1080 (so to the parents that's an 8% increase not 20%).

Year 2. You increase the fees up to say £950 + VAT so £1140 (around 6%)

Year 3 You increase the fees to say £1000 + VAT so £1200 (so 5%)

Most people work on 5% increases each year (and with some years worse than others)

@BountySunshine - this is it, though. Our kids’ school has almost doubled over the past decade, and combined percentage increases recently meant a 15 percent rise in two years.

A lot of parents complained. A few families couldn’t cope and did leave. Any more significant hikes now will cause yet more families to leave…

@Ladychaise Labour are working on the basis that private school numbers have basically stayed the same for the last 20 years, but fees have increased by 55% in the same time, so families will cope with an increase of 20% over say 4 years.

I agree with you, I think Labour are probably are being over optimistic in their position there won't be a significant reduction in pupil numbers. Mortgage rates are high and cost of living crisis is biting. Yes the pupils of Eton and Harrow won't be effected, but it will hit your day independent parents.

I don't think we will see the numbers leaving say private schools are forecasting and probably what is more likely is reductions at say reception (people deferring to say 7), and those who would have come in at 7 deferring to 9 etc. Also people going to state for A-Level. So overall reduction in numbers.

The reality is I think this policy will create a lot of press, won't bring in the money predicted and given at best this is going to increase the education budget by 1% will do little or nothing to improve state education.

@BountySunshine - yes I think you’re right. But for us any more significant increase now, on top of what’s gone before simply pushes us into ‘totally unaffordable’. It’s heartbreaking and I’m so stressed about it tbh.

Also, lots saying that schools have put up fees by 10% this year so 20% next year shouldn’t be an issue - well that’s assuming they don’t need to also raise fees to stay afloat anyway. Fee rises in the last few years haven’t been sheer greed/profiteering- it’s covered hugely increased energy bills, staff wage increases during a cost of living crisis, literally everything costing more. Assuming those problems don’t go away, they may need 10% to cover costs PLUS the 20% VAT increase!

Also ‘slightly increasing form sizes’ eg going from 3 forms to 2…let’s say each form is 22, splitting them in to 2 instead of 3 puts them at 33. Can’t see many parents paying for that! Plus, it also assumes all classes are full with a waiting list…many small schools are not full anyway after the troubles of the past few years (Covid, Brexit, both leading to higher fees already)…my school could increase available places to 100 per class and it wouldn’t increase our income a jot as they’re not full capped at 18!

@modgepodge so when I said increase class size most schools round here (particularly primary) emphasis that class sizes don't go above 18 and many are not full. So say you have 3 classes of 15 you go to 2 classes of 22.

I'd like to emphasis I am not in favour of the policy, I am just saying that Labour is working on the basis that actually 20% won't be passed on and probably, I think optimistically, that private school parents will accept increases of 10%.

While I don't think the policy will lead to mass exoduses (I agree some kids will be forced to leave, but a lot of parents will struggle through for a year or two to get to either a natural leaving point (say end of primary or GCSEs), and possibly to ensure they get a good state school placed. I also agree suggestions of a 10 reduction in numbers is probably not unrealistic (which would be 60K) over say the next 5 years, which undermines how much money will be raised in VAT.

So Starmer got a bursary for his private Sixth form education? Hmmm...the first thing private schools are going to be doing to cut costs is reducing bursaries. He's lucky there wasn't a policy like this in his time or he might never have been able to benefit from a bursary!

But we need to stop pretending there isn't a luxury element to many of the richer private schools.
This jumped out to me and got me thinking. I don't think anyone denies that the richer and luxury private schools have a lot of luxury elements.

I think a lot of the problem is that many people hear "private school" and think Eton, Harrow, Winchester, St Paul's and have an image of semi-aristocratic children or the children of millionaires all talking about their upcoming luxurious skiing breaks.

What they don't think of are families who are, in many ways, just like them but who have chosen something different for their family.
Eg A family getting in catchment for the right state school who has a high disposable income, affords tutors, lots of clubs and then as a family has a lifestyle with a high disposable income is no better or more moral or less privileged than a family who chooses a cheaper place to live, doesn't play the catchment game, pays fees at their local independent, so doesn't need to give their children extra tutoring and some of their enrichment is covered as part of the longer day.

Both are more fortunate than other people to have the funds they do, but in the private education debate one them is always presented as normal people and the other is branded the wealthy elite.

For me it is a few things.

It tells me that labour have no idea about private schools and how many pupils with additional needs but no echps go to those schools because the state could not meet their needs. Many of those parents never envisaged using private schools and are scraping by. They have no idea how the already stretched SEND state provision is going to be hit by this policy.

It tells me Labour don't understand the ethnic minority vote and that in some cities they are heavy users of private education because they are very ambitious for their children or fearful of what they might get caught up in if they go to their catchment schools. Something those in leafy suburbs won't understand.

It tells me labour don't do their homework and have slightly adapted a Corbyn era policy that is just designed to hurt private schools regardless of whether it benefits the state sector - because this policy will not offer the state sector any net benefit.

I also can't support taxing education in this way and removing chances and opportunities from children and young people. Neither can I support the idea of the state reducing parental choice in this way.

I just think it us such an awful policy that will have no negative impact on the wealthy who will just have less competition for the top schools. But could have a devastating impact on smaller schools and some vulnerable pupils.

@LolaSmiles - totally agree again! Some friends of ours spent thousands on tutors to get through the 11plus and send their kids to a grammar school an hour’s drive away. They go on several luxury holidays a year.

We on the other hand lead a pretty frugal existence, never go on holiday, and cripple ourselves financially to send our kids to a private school within walking distance.

I feel like an idiot these days when I look at them tbh…seems so unfair that they made their choice and the state supports them, but we made ours and we are punished for it.

13% of private school pupils are in boarding schools only. Vast majority are in day schools. Plenty of those are small schools with fewer resources than vast boarding schools.

Yes, the state pnishes those who invest in their children and benefits those parents who spend their money on drink and drugs instead of education. If Labour also adds VAT to all tutoring and university and weekend religious schools etc fees it might be a bit farier. Wonder what they will do with UK state boarding schools? Probably no VAT as they only charge parents the sizeable boarding/food element which in assume will not be taxed at any boarding or private school eg no VAT On your school lunch even if included in the fees etc. The bills may get a bit complex as anything not "education" may not become vatable.

Ladychaise
It's a little bit off topic, but provides an interesting context to the MN discussions on this topic.

The Sutton Trust have published a release about admissions to state schools. It looks like high performance in state schools comes from social selection.

Some interesting excerpts:

What the research says about school admissions

It is therefore disappointing to see the data on how selective some of the best comprehensives in the country are. Our research in 2019 found that the top 500 comprehensives in England had on average a lower proportion of children eligible for Free School Meals (FSM) in their schools than the national average. But this isn’t just down to differences in regional affluence. The research found that they also had a lower proportion of children eligible for the FSM in their school than their local catchment area. In other words, if you are eligible for Free School Meals you are less likely to attend a top 500 comprehensive, even if one is open in your catchment area.

Often, the best schools are oversubscribed, making the “oversubscription criteria” a particularly pivotal element in shaping their future cohorts. Currently the two most common criteria used by secondary schools are: having a sibling in the school already (95%); and some sort of geographical component (88%). As a result, our research in 2017 found that a typical house in the catchment area of a top 500 school costs £45,700 more than the average house in the same local authority. This is clearly a significant barrier for lower income families accessing these top schools.

Perhaps most frustratingly of all, our polling in 2020 found that the most socially selective schools were the least likely to identify that social segregation was an issue in their own school as well as the system as a whole…Put simply – it isn’t good enough and it isn’t fair.

Let’s be honest though, changing admissions policies is harder than just knowing that you could theoretically do it. Our research has also shown that 54% of teachers cite class differences in parental preferences as a barrier to improving social mix in schools. 48% shared concerns over the impact on league tables and 37% cite difficulties associated with teaching pupils from disadvantaged backgrounds.

It somewhat challenges the oversimplified arguments that some on here present.

Private schools have much longer holidays for working people to cover

They normally offer comprehensive holiday cover for most, if not all, of the holidays (at additional cost).

Depends on the school but most private schools offer holiday care for holidays above local State School allowances and are open 8-6pm for extra care. This is often better for shift workers as it’s more reliable than State Schools due to being contracted. DS’ school even offers Saturday clubs.

"Current polling suggests fewer than 20% of voters oppose the policy. "

.....because frankly a lot of people do not understand the consequences of the policy, as covered by some great posts already.
All they hear is the Labour spin of "stopping unfair tax breaks" , and giving the impression that all private schools are like Eton , Harrow .Winchester etc
ie taking from the super rich and giving to state education.
They sell it as a simple win when it far from it.

@eagleone that statistic is not surprising (and hence why Labour is doing this). It’s a tax which impacts only a relatively small proportion of voters (a large majority of which will vote Tory anyway) and appeals to the left of the party.

XelaM · 14/10/2023 15:26

I don't know, but my daughter is in Year 9, so hoping it won't come in for another 3 years which will be after my daughter's GCSEs. 🤞🏻Then she'll go to to state sixth form.

We're in the same position and assume that it will hit right in the middle of GCSE

October/November election this year ,so the best we can look at is new school year in September 2025.
State 6th form for us too.
Unbelievably this is turning into a flagship policy so they will be looking to push it asap.

A nightmare can of worms is going to be opened, but they don't care.