Will VAT on private school fees lead to a partial collapse of the sector?

[mids2019]

Will VAT on school fees coupled with cost of living drive a lot of parents from the private sector or will the majority absorb the cost? Are the numbers that potentially end up in the public sector going to offset any gains to the treasury through VAT?

Labour are working at about 4-5% transfer rate to the public sector but is this an underestimate?

Purely anecdotally I would say the vast majority of parents will be able to absorb the cost. They may have to cut back on luxuries elsewhere like pricey cars or holidays but they can still afford private school fees with VAT on top.

We often hear about parents scrimping and scraping to afford to send their kids to private schools but I think only a tiny minority actually have to do this.

No it won't cause a collapse. Many parents will easily be able to pay the extra cost, and those that can't easily will be able to adjust their budget to do so. It will be fine.

Interesting.

No it won’t. I don’t know anyone with dc educated privately who are talking about pulling their dc out. They’re all moaning about the increase but have plenty spare to meet it and lots of other places they can cut back if needed.

What about new parents?

My estimate is somewhere in the middle.

I would say that it will shrink the sector for sure, it’s by how much which is the interesting question. It will have a real impact on provision - even schools that survive will not be able to pass the whole cost to parents (in the first year at least 🤦‍♀️😅) and so there will be changes to what is offered.

If it puts them off they couldn’t really afford it anyway.

Birth rates have fallen so much that more dc in the state sector will actually help keep state schools open & funded.

OP, if you are basing your conclusions about this on mumsnet anecdotage you should apply for a job with the Labour Party immediately. Your approach to policy formation is definitely on a par with theirs.

Yes. But not the bit the Labour Party are hoping for. The stupid thing about the policy is that it’s not going to hit the ‘rich’ at the ‘expensive public schools’.

I was helping out at an open day at my 3 DC’s school at the beginning of term and this policy came up in conversation. No one is really going to leave because as the parents can pay those prices they currently pay they are more tied in, especially when they are boarding schools (like this is) which means it’s more of a family where personal investment is high, and these schools really are communities.

All it means is those with the money will sign up quicker as they don’t want to end up at school likely to close and they will want their child to start as quickly as possible (and this was obvious by the demographic that came through the doors).

The schools that will close are the small independent schools with a lot of children who need smaller classes and extra educational care but where parents don’t pay for the all extras outside this. They will be pushed into a system that already can’t cope and it will just mean everyone loses out. Apart from those at the top.

I wonder though if Labour may have a rethink now it looks like it is coming into power. There certainly wasn't a VAT introduced during the Blair years and I wonder if the amount gained might weigh against raising the hackles of parents who may be influential in many walks of life? If there isn't an immediate improvement in date performance will this not look like the politics of envy?

What are the chances (in say a year after election, should he be elected) of Starmer providing data to show money coming in from VAT on private school fees, and then showing what amazing benefits the ‘VAT’ money has provided to state schools.

Well, according to times today new enrolments are at lowest level since first year of pandemic. It’ll take a while to become clear, people with children in the run up to key exams are clearly going to do what they can to get through those milestones.

I don't know how left wing Starmer is in reality.....

He certainly isn't a true red in the style of Cornyn and I think he is a canny politician. Hitting the aspirant middle class may not be look he is looking for in reality?

I don’t think they will be able to introduce the policy as quickly as they say. It’s clearly not well thought through but from what they have shared, there seems to be an intention to exempt children with EHCPs. To do otherwise would be downright inhumane but there is complexity here as under the current regime exemption attaches to the provider not the consumer.
they will need to get some civil servants with actual brains and knowledge on the problem and they will have to consult. It will take time.

Even a small percentage is too much, where do people think those kids will go? Oh yes, the already massively oversubscribed full to bursting local state school.
I know quite a few, one child not particularly wealthy families who will struggle to absorb the extra.

@Marjoriefrobisher

Indeed.

There’s already been a 2.7% drop in enrolment this year. Believed to be in part due to proposed VAT changes. Also heard this week that they want to charge VAT on boarding as well as tuition. I also think people would be surprised how many people received financial support to attend these schools already.

I wonder how much less in VAT will the treasury receive as presumably parents will cut costs by spending less on goods which also have VAT applied? Is there the potential that the real losers may be teachers as they are made redundant from the private sector or their pay reduced in an effort to offset costs?

With a falling birthrate there is far less likelihood of oversubscription in state schools. The cohorts with the highest birth rates are already in secondary school.

But the birth rate is dropping, so the 'already massively oversubscribed full to bursting local state school' will become less so, and the fact that enrolments at private schools have dropped may well be due to the diminishing birth rate also.

@lavenderlou we cross-posted. 🙂

Even a small percentage is too much, where do people think those kids will go? Oh yes, the already massively oversubscribed full to bursting local state school.I know quite a few, one child not particularly wealthy families who will struggle to absorb the extra.

School rolls are falling far faster than predicted particularly in London so that’s not an issue for most.

There’s already been a 2.7% drop in enrolment this year. Believed to be in part due to proposed VAT changes

Some will be because of birth rates and mortgage increases.

No
HTH

I don’t know anyone at private school who currently pays fees who wouldn’t be able to afford the VAT. But then I’ve never seen the oft mentioned on here family who cut back on eating out and go camping to scrimp money together for the fees.