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?

@Araminta1003 Yup they will absolutely pull up the drawbridge up. Don't get me wrong I expect to pay what I pay for what I get but that's the point isn't it. You can't have it both ways and expect people like us to be ever expected to pay higher and higher prices for something and others to just piggy back on it. It's not going to go down well. A school near us ended up imploding as almost half the kids were on some kind of bursary or were teachers kids meaning that people like my friend were essentially the only ones paying the full price (which was cheap to start in comparison to other schools). Everyone was so shocked and the teachers so upset when the losses meant the school had to close. But I was neither shocked not upset and nor was my friend because it was clearly unsustainable. They moved on. We would have done the same.

And as for legacies, my DP's are thinking of doing a settlement for all their GC's as it's a good way of protecting a shit ton of cash (that they earned and have already been taxed on) from inheritance tax and dodging this bullet of VAT. Shit, I am thinking of doing the settlement but then we don't get the inheritance tax benefit as well. As I say, so many can of worms opened because it's a stupid policy that helps no one.

But don't they still have an obligation to offer a place at a school if a student does not already have a state place? I imagine areas like Oxford and Cambridge will be fairly hard hit as they have quite a few independent schools and, I would guess, a fairly high proportion of dual professional families who will be paying from PAYE and already finding fees a strain.

I believe they do have an obligation, yes. That will cost the taxpayer as pupils will now want a state place. It also means that, unless the LEA can allocate a school within a sensible distance of home, they’ll have to fund transport costs as well.

Yes. That’s what will happen. Children will get places in schools miles away, that are failing (hence they have places). They will get private taxis to the schools, paid for by the tax payer. Costs a fortune. Kids spend sig proportion of the day travelling, as well as having to get up much earlier disrupting their sleep. Couldn’t make it up.

Meanwhile the poor teachers pick up the pieces. Thanks Labour. Party of the people.

I’m not a teacher. Nor will my children have to move schools. But this policy is clearly, yet another scandalous idea.

We should not assume that all state schools are oversubscribed. The good ones are, of course, but that leaves the lesser ones two-thirds full. They can’t improve because being under capacity leaves them underfunded and then no one wants to go there because it’s rubbish and then it’s under capacity…...they can’t break out of such a cycle.

Do you mind me asking whether the families leaving from your friend's school were in natural years for moving anyway? Most of the people I know who've decided to move to state are at transition points such as going into 6th form so whilst the problem of full schools is still there, it's not their children who'll be displaced from the state school place they want.

That's probably true in some ares but the post with the screenshot from Oxfordshire says that all of their secondaries and many primaries are completely full. This policy is likely to disproportionately impact some areas.

I think it’s a lot worse than even that. If I didn’t have school fees to pay I’d work less, earn less and pay less tax.

To fund school fees requires an almost equal amount of tax paid to generate it. If I need 20k per annum for fees that’s 40k of income. No way would I carry on paying that much income tax if I used state schools and had no need for the additional money. People will either make bigger pension contributions, reduce working hours or retire earlier or more likely a combination of all 3. All massively reduce the amount of income tax paid.

14 years of fees from pre-prep to 18 local to me is about 250k. That means 250k of income tax paid to fund the 250k take home pay retained for fees. Add on around 100k to fund the state school place for 14 years plus the 50k that won’t now be paid in VAT and straight away one child not starting at PS due to the VAT imposition could easily cost the taxpayer 400k.

Labour of course try and prevent people from considering this inevitable outcome instead preferring to mislead people into being supportive of a destructive policy that will damage everyone to some degree.

Labour don’t seem to realise that overseas students are not as economically beneficial as home grown students because the parents aren’t paying UK income tax to fund the fees. They will literally just pay VAT to the government.

Almost every place taken by a foreign student instead of a UK resident student results in a loss to the Treasury.

That would make sense. But her daughter is in Y8.

Following a Quick Look on line, this is the area we used to live in London.

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That is a huge number for that stage, I imagine people feel that once they start year 9 they are likely to be committed till 6th form so best to jump now. Even in a large school 10 families would be a significant percentage of a year group.

@MummyJ12 come on now you don't really think that entitlement to EHCP funding is an issue? How many DC in your school have an EHCP? There are some specialist indi schools with placement after tribunal where all DC have an ECHP.

But most indi schools steer clear of additional needs.

You really think there will be more SEN/EHCP in the state sector because the indi sector is taking so many?

Sorry but yes. I know many. Many parents send their kid/s with SEN to private schools, if they can. Smaller less intrusive, more manageable class sizes. Less stress. More support etc etc.

You have a naive take on the situation and are incorrect, there are many children who go to independent schools who would otherwise require an EHCP to meet need. Just because some children have SEN, doesn’t mean that they have learning difficulties you know. Many have high IQ and are academically very capable. Your view that independent schools steer clear of additional needs is ableist and ignorant. It would also be completely illegal of independent schools not to take children who are capable of learning in their setting because of their additional needs.
I know of 3 families from DDs previous primary school who have sent their SEN children (6 children in total) to two different independent schools, they have also said that they will likely be taking their children out and putting them into the state system should the VAT be added because they simply can’t afford it. These parents have chosen independent usually because of the smaller class sizes and more nurturing environment and they make huge sacrifices for their children to attend independent schools. Those entitled to an EHCP would mean up to an extra £11,000 per child for mainstream. More for specialist provision, band 4 and above. 4.3% of children require an EHCP, when you think of the amount of children in education, that’s a huge number. Also, local authorities are already crippled with EHCP applications and are struggling to keep up with the timelines and deadlines, never mind find the funding for them.

There are not enough specialist provision placements as it is to fulfil the needs of our children. My DS has had to miss a year from school to wait for a place to become available. The sector cannot cope with any further pressures on it.

So no, I won’t “come on”. Yes I seriously believe it is an issue because it already is and will only get worse!

I thought it was well known that many parents use indepdent schools for children with SEN (diagnosed or not) for the reasons that PP give.

The ISC data is here https://www.isc.co.uk/media/9316/isc_census_2023_final.pdf and shows 18.6% of children in their schools are identified as having SEND. That is higher than the general school populaiton https://explore-education-statistics.service.gov.uk/find-statistics/special-educational-needs-in-england

I'm a case in point. Both my SEN dc went to reasonably academic indies, one went to a public school. Loads with SEN (autism & ADHD) go to Winchester College for instance. Hopefully, the blinds are starting to come off after years of rubbing hands together with glee about the possible demise of the private school sector and the over-exaggerated benefits of it.

Thank you so much for the links @Mia85 which back up my previous post perfectly.
So currently there are 103,337 students in independent schools with SEN.
7,171 with an EHCP. This number would certainly rise as many more would be/are entitled to an EHCP but their needs are being met without one due to them being at the independent school.

I am very surprised to hear that @LadeOde , DS was there and the lack of pastoral care is still difficult to comprehend. It was a case of just letting him fail , I would not recommend the school for any DC nevermind one with Autism or ADHD.

@Lookingforwardback Most were medicated for the symptoms that could be medicated for. The autistic boys that go to Winchester are obviously the very highly academic high functioning boys. Their 'quirkiness' was well accommodated at the school who were used to neuro diverse boys. Most prep schools often recommended Winchester for bright such boys. You may not have been aware if your dc did not have a diagnosis.

They would definitely lose my vote, I was on the fence but I can’t vote for a party that wants to upset innocent kids forcing them to leave their schools, because parents can’t afford to pay anymore, to serve their political agenda.

I'm in a location where Labour comes a distant 3rd/4th behind other parties.
So voting Labour will keep the Tory incumbent in place.

It does only come down to a relatively small number of kids who would have to leave their schools. Painful for each one, but a small number.
I can't really see those whose kids are already at state schools, and people whose kids have already left school/don't have kids, caring enough about this issue to vote Tory, unless they were planning to vote Tory anyway.

Regardless of which party you support there is growing anger in the UK about inequality in the country. Countless threads on MN demonstrate this. Public Schools are seen (rightly or wrongly) as perpetuating inequality here by giving the children of the rich a better life. It is a similar issue to IHT.