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?

This doesn’t surprise me. The threat of VAT is the tipping point for many. For those looking at year 7, the thought of current fees plus 20% VAT for the next 7 years is just too much (plus, no doubt, increased university costs when the time comes). I can’t understand the logic of attacking a system where the majority of children are very happy and where they are saving the taxpayer by not using state schools. Not only is there a cost of the state education, where nearby schools are full, I believe the LEA will have to fund transport if the only state schools available are several miles from where a child lives.

You’d think so as they u turn on pretty much all else but this ridiculous policy is the only thing left

So they’ll probably cling on to it as it damages education

I really hope they do a U Turn on this. I can’t see that doing that would lose them any votes. In fact, it’s more likely to gain them votes.

They won't u-turn. Starmer and Reeves are completely tunnelled vision and aren't prepared to even discuss it, even in light of the growing amount of evidence about the damage it will do for ALL DC + taxpayer.
They don't care if it even ends up costing money with no outcomes. They just need to say they have done it.

Meanwhile, successful public schools will just start building their endowments even more, as quickly as possible. If you look at the top ones their endowments have grown significantly in the last 10 years- meant for bursaries and outreach but I guess there comes a point where they do need to support middle class clever kids too or the school is no longer balanced. So I wonder if they will bring back the concept of scholarships again vs the current trend of bursaries. Scholarships are far less work for the school to administer. Nobody has to go through someone else’s financials with a fine-tooth comb.

Because public schools will need to pull up the drawbridge. Tapping into older alumni and the big inheritance tax thing - you can leave your cash free to a charity. How shortsighted of the Labour Party. Just when our unis are desperate for the cash instead. It is very dumb.

I think you’re right unfortunately.

Wow. Those school stats are horrendous. Wonder how they compare to other places.

True. Private school VAT, much like their positions on women (not existing), and the disabled.

As another MN said: ‘God, this makes me so fucking angry. You want “dehumanising”? Go through a PIP assessment, where you too can be treated like a performing seal and rushed through a series of physical acts which are meaningless in terms of measuring the impact of your disability on your daily life. But Labour don’t give a shit about the disabled, or about women. They only care about the special men who claim to have it soooooo much worse while openly laughing at us as they indulge their fetishes.

I have no one to vote for. No one. And if anyone reads that and tries to spin the “hold your nose and vote for the least worse option” line they can fuck right off now. As they say, I didn’t leave the Left, the Left left me.’

I totally agree.

Some people think the Labour Party will be all consumed with the uni funding crisis initially. Which let’s face it - is far more urgent than taxing private schools.

It’ll be interesting to find out how they are planning to fund this. Increased tuition fees? They were increased to £9,000 in 2012. If they’d kept pace with inflation, they’d now be £12,500.

Nah, they’ve made VAT on private schools one of their first 5 or 6 things haven’t they - it focused grouped well as people think it’s a Robin Hood policy with immediate state funding benefits to be realised. We lost families due to the inflation forced hikes last year, I know a couple of others hanging on, the effects will snowball.

but that is what labour want - this is ideologically driven not pragmatic policy.

‘recruiting teachers by ending tax breaks for private schools’

https://www.bbc.com/news/uk-politics-69016719

they won’t back down on their first steps commitments

It’s now number 6 on their “first steps” plan. I might be wrong, but I thought it was previously higher on their priority list. I wonder where it will feature in their manifesto.

It’s laughable that they seem to think 6,500 extra teachers are going to be easy to recruit. I’m not sure they’ve grasped the scale of the recruitment and retention crisis in the state sector.

Will let you know. Current FOI requests going in for all counties/LAs

The irony is that the actual benefits to the state are looking increasingly like zero. Every DC that leaves private school has to be paid for by the state AND they lose the VAT for that child.

Precisely. For every child switching to state, they will lose an average of £3,000 in VAT and it’ll cost the state £8000 to educate them. Therefore, each child has a net cost to the taxpayer of £11,000. Let’s take a family with 2 children. If they decide to switch to state, there is a net cost of £22,000. It doesn’t take many families like that to start impacting massively on the projected IFS calculations.

And even more if a child is entitled to pupil premium or EHCP funding.

“It’s laughable that they seem to think 6,500 extra teachers are going to be easy to recruit. I’m not sure they’ve grasped the scale of the recruitment and retention crisis in the state sector.”

Personally I always assumed they wanted lots of private schools to go bust and or let some staff go, so that those teachers end up in the state sector. Perhaps they are even hoping that a number of unis will go bust too and will somehow be able to persuade academics into teaching A level (high unlikely to happen I would have thought). Who knows what goes on in their minds…

The uni thing is interesting though - surely if a number of unis go bust, even less international students will arrive to fund the remaining unis. Word quickly gets out of Education in UK being in crisis and so it makes the private school sector attack even more risky. I have said this on other threads- rich kids from overseas attending top UK private schools means other slightly less rich kids in the same jurisdictions aspire to UK education and then pay up for uni.

There are also more and more articles of British children now aspiring to go to eg Harvard or Yale - those are rich unis which provide full funding for very talented students including middle earners. Young talented people are in great demand worldwide and our Governments need to make sure the UK remains desirable. I am quite clear that if they bring in policies to overtax my younger DCs for their uni education, we will send them back to Europe for uni, for free virtually. That might be 2 clever tax payers gone.

But according to MN, all the fees previously paid to the private sector will be diverted (by those sharp elbowed parents) into the state sector. This has been a long held belief even before Starmer started making noises about levying VAT.

Funnily enough, my children have mentioned that they’re really interested in looking at universities in the US. It’s definitely something we will look into. I know a few people who’ve gone abroad for university - the European universities are often a comparable cost to the UK, or cheaper.

Amazing. Thank you.. Wonder how long that FOI request will take..

You're wrong

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Double the usual amount of kids from my DS’ prep are going to grammar this September. It’s an all through school so most kids usually go on to the senior school. Haven’t seen the full leavers stats yet but it looks like around a third are leaving, most of whom are going into the state system.