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?

Lots of econimosts are devating this and most are saying that it is a ridiculous policy that could potentially end up bringing in net £0. See Adam Smith Institute for one.
The issue is that Labour aren't listening, for them it is ideological and actually I now don't think that they even care if it brings in £0 OR ends up costing more than it brings in. They just need to be able to say that they are socking it to the elite (even though many Labour MPs could be included in the definition of "elite" Inc Starmer).

Not sure what housing has to do with education 🤔

Education can be transformative and one of the greatest social levellers.

It should be available for all, for the greater good of society.

People affect anger at those on benefits but perhaps should redirect that anger at the lack of equality and support within our current education provision that can lead to an over reliance on support instead of independence.

Housing has loads to do with education! Location of housing is a key factor in entry to most state schools.

For true equality of access you’d need lottery admissions and loads of transport. Not a vote winner!

Local to me, from contacts at 2 prep schools: one has said they've never had so many vacancies (in all year groups), the other has said there are only 7 children in the lowest year group (whereas previously they'd always have been full). If this continues the most marginal preps will close, and the remaining preps and any state schools with places will mop up the kids displaced.
The selective senior schools are still full/oversubscribed. The non-selective ones are not full and may struggle.

I think this is going to hit prep schools much harder than senior schools. Firstly because the high birth rate 7-10 years ago means there won't be places in state secondaries for kids to move to (whereas there will be state primary vacancies). Secondly because people with only a few years of paying fees left and kids already in or approaching exam years will go to great lengths to keep them there, whereas people with younger kids will take a state place to avoid many years of high fees, or will use state primaries in order to save up enough to afford the fees for private secondary.

The senior schools that are high up the academic league tables will still be full, but will become less selective. The ones near the bottom of the league table will fold. My guess is that numbers in private secondaries will only fall 5-10% but it wouldn't surprise me if prep school numbers fell by one-third.

Loads of alternatives to a pure unconstrained lottery system. I mentioned some upthread. The Sutton Trust have a good evaluation of some (not all) of the options.

Interesting @JassyRadlett ! Sadly fairer admissions isn’t politically popular.

Tell me about it.

I work in a non-selective state school in a selective area, so expect our %SEN to be higher than average. We sit at approx 20% (including EHCP students). So of course not a majority but a very substantial minority that require a lot of effort and time to get into school, keep motivated and on track, so they get a decent education and one that will allow them to move on successfully to the next stage of their lives (could be uni but probably not).

I don't think the shools at the top of the league will become less selective - they're already rubbing their hands together at the prospect of being the only ones left once Labour wipes the floor with the ones helping the mediocre and SEN. Their position is not in doubt and they don't need to drop standards, their value increases, widening the attainment gap. It's just another way for the MP's kids to cut out uni competition from rural privates by focusing the brain power on London grammars and the elite privates.

My reasoning is they'll become less (academically) selective because the higher the fees go, the smaller the pool of parents who can afford those fees, and the smaller the number of very bright kids in that reduced pool. i.e. the selection will shift to be less based on academic standards and increasingly based on ability to pay. Less meritocratic and more oligarchical. I agree the top ones will stay full, and some of those lower down will fold. But I think the mix at the top schools will change to be (a) wealthier, and (b) not quite as bright. All of which would be strange things for a Labour government to be aiming for, and indicates they haven't thought it through.

@Lebr why should anyone else care if private schools become full of thick pupils?

Presumably because the old boy’s network will still be there for them to benefit from - better to have a bright MC kid at Eton than a dim Lord’s son, if that dim Lord’s son is going to end up sitting on the board of a bank in ten years’ time.

I’m not sure Eton networking opportunities extend to the plebs on bursaries, and suspect the earls who attend Eton will choose to hang out with lords from Harrow in the school holidays over a dentist’s kid at Eton, but I am happy to be told I’m wrong.

It'll be the state schools getting them all when the worst of them shut down, don't worry!

« Thick »
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So if you were a government who actually wanted to improve education, faced with falling student numbers due to demographics would you:

a) change the funding formula in order to keep the same education budget for fewer students: which must necessarily pay for all the same subjects being available if that's what the school wants.. or else the school could choose to tweak their spending choices to give better outcomes now that they have the same money but fewer students

Or

b) damage an important sector of your economy and disincentivise parents from paying for their own children's education which currently both relieves the state of that child's education cost and brings in more income tax as a bonus... so that you can keep the funding formula the same and state schools have the same money and same number of students

Objectively, it's not hard to see which approach is better.

I think it will Impact a small amount of parents with kids already in private school where they 20 percent will be very difficult, but they will do what they can to keep the kid there.

however the biggest impact will be for those considering sending their kids, and who will send tk state instead, making an already over subscribed state system even worse. Much worse.

ultimately we need private school and healthcare, as it takes the pressure off the state system and the nhs, when you start making it Unafforable for many at the Lowe tier, you start to take down the state school system and nhs,

I’d also do c) give tax breaks to anyone spending money on any form of boost for their kids - tuition, drama, music, educational holiday clubs, private SLT and OT, therapy whatever is to help your children achieve better life outcomes and remove barriers - and because we’re dreaming, also a pot for those that cannot afford to buy services to draw on.

we accept the nhs needs help from the private sector but we ignore the fact the same thing applies in education as it’s somehow less urgent.

the govt has a huge and increasing issue with young people not working and they need to reinvigorate the skills being offered by any means.

The leading private schools will continue to educate a disproportionate number of the country's future politicians, judges and other figures in public life and positions of influence. It's in the best interests of society that those schools be as meritocratic and representative of society as possible. The alternative is a continuing oligarchy and government of the plebs by former members of the Bullingdon club.
If you want to see the consequences of the top private schools being stuffed full of mostly very rich but intellectually mediocre kids who leave armed with a huge sense of entitlement and the connections and network to go into public life, consider whether the country has been well run for the last 14 years.

I do find it really strange that people think that state schools must necessarily suffer from falling student numbers.

The only thing that constrains how much money each school can have is
a) how much money the government takes in taxes
b) what proportion of tax income the government is willing to dedicate to education rather than other expenses such as the NHS, benefits, pensions, policing etc
c) how the government decides to share the education budget out

The funding formula is just a tool the government use to decide how to share out the education budget between different schools. It's neither magic nor unchangeable.

Exactly. It’s such a bizarre take.

We have an education budget and we don’t need to keep bribing in more state students. We can benefit from higher funding pp and it wouldn’t even cost more overall.

It’s such random thinking and a minor fix but a good way to improve state.

Isn’t the whole reason we have this policy because funding per pupil needs to increase in the state sector and this looks like it’s ‘doing something’ to address that? Even though it’s just the smallest of somethings with possible adverse resource draining consequences.

it would be great if falling numbers naturally increased funding per pupil but there are massive unknowns with environmental and war related immigration.

Yes you said it well here too. It’s really not a tough one

But that is totally within the gift of the government.

They can choose how to allocate state funds.

Of course they can and instead we’ve got some populist crowd pleasing nonsense and not anything that addresses the issues.

I've made my view clear on what I think should happen to the funding formula (and admissions...) The only thing I'd say to your post above is that you've presented a binary choice - an incoming govt could choose to do both, neither or something in between.

But it's a reality that for some schools, even if the funding formula does change, it may not be practical for them to continue to eg offer all the subjects they currently do if their pupil base contracts significantly. Even if they get extra cash per pupil that money will be committed a dozen ways before it can prop up a more niche GCSE/A Level.