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?

A relatively small number of SEN children could still have a huge impact. For example, if only those with EHCPs (who have them now and are at independent) go back into the state system, it could amount to a bill of around £72 million a year on top of the cost of state education. That is less than 10% of the SEN children in independent at present.
It’s all unknown territory at the moment but the impact this could have on the public purse should not be underestimated IMO.

I think the policy will be "delayed" until the bulge years pass through.

It's going to be very much school dependent I think. Those highly selective with very good reputations and those with large international student numbers are not going to see much change. Nor will those in areas surrounded by sink secondary schools and the catchments for very good secondary schools are very tight and the good schools are completely oversubscribed. It will simply be worth the sacrifice to pay the extra rather than go to the sink secondary school.

It will be the smaller schools and those surrounded by decent schools or grammars that will suffer.

It's a very short sighted policy, anyone who can pay for their DC to attend private school can pay for houses in grammar catchments and tuition for the 11+. It simply takes a place in the grammar away from someone who cannot afford to scrape for private.

The elephant in the room no-one with any political clout seems to be talking about is the SEND children in private schools. There are many many children with SEN in private schools as they are academically able but the mainstream classroom environment is too busy/ loud/ overwhelming for them. One of my nephews is at a private school with a EHCP, he is thriving (on track to get very good SATs). Academically able but could not cope with 30 children in the class and the busy school environment. In mainstream he spent most of the week, sat in corridors or on "part time timetables" to help him manage (aka excluded). He had different playtimes to his peers because" DN gets overwhelmed in the playground". He is at a small independent, there are 12 in his class. Lots of sport and space. He is an active participant in class, he has the same break times as everyone else. What will happen to these children like my nephew? SS that cater to academically very able but ASD are like rocking horse poo. His LA have a safety valve agreement, SIL is shitting herself if his school go under as she will have no choice but to home school or fight tooth and nail for EOTAS.

I don’t disagree @youngones1 but I’d rather we levelled up than levelled down. This policy isn’t raising enough to mitigate the negative consequences.

I meant that if the Labour Party scrapped their VAT plan, I don’t think many would decide not to vote for them just because they had dropped that plan.

I too was on the fence but there is no way I can vote for a party which thinks taxing education is a good idea.

I think the VAT policy loses Labour more votes than it gains.

I'm sure the policy will be diluted, it's the symbolism that Labour is after. I have no doubt there will be a lot of exclusions if it is enacted.

They are other ways to raise more taxes from “the rich”, if that’s the end goal, and before someone comes and says that this has been tried in France and they had lost money didn’t gain, etc., this policy will achieve precisely nothing other than disrupt kids’lives but Labour is adamant to proceed with it regardless, so I am thinking they are not after the super rich after all.

I agree @youngones1 that it has to be well thought through and there will definitely need to be exemptions.

For some reason it reminds me of the £100 million Boris was promising us for the NHS in his Brexit campaign. A lot of people can see through it but unfortunately some are completely buying into it. Now we all have to live with the consequences.

It was £350m, not that we saw even the 100m you mention..

Thanks @Slav80! I’ve got a rubbish memory obviously! But you get where I’m coming from…..

@LadeOde We eventually had enough of being gaslit and removed DS, he went on to achieve all A* 's at a school which didn't cost circa £50 OO pa.

Oxfordshire secondaries are not all full. There are two at lease in Oxford with plenty of space. They’re not the ones you want though.

However, if a mass move in Oxford were needed, I’d probably suggest that everyone tries to get into the better of the two options (which has space for another two classes for year 7 at last count, plus more in years above). If all the private kids did actually descend upon the one school, which is looking to improve, it would likely be one of the rare occasions where parents can make a difference.

Of course, you’d also need some of the private teachers to come along to be able to explain to the new school what the parents are clearly expecting, what they are used to, and there would need to be buy in from existing SLT. It wouldn’t work if the new school took an “well we do it this way at state” approach. Otherwise you’d just end up with pissed off parents and dysfunctional home/school relationships. The School community would be very unstable.

Doubt that’s what the left is aiming at thought.

I have no personal knowledge but a poster above put a screen shot from the council saying there were no or very few places available in secondary schools in Oxford. It is also on their website https://www.oxfordshire.gov.uk/residents/schools/apply-school-place/year-transfers/before-you-start

perhaps they are not telling the truth. I have no idea.

But I agree that it would be unlikely to work as anticipated. Actually I do have a friend in Oxford who’s moving her children from private to state and says there is a whole group doing the same thing (transition year). They are all going to Cherwell, which I understand is the state school you need to live in a £million house to go to.

Yep and this is going to start being played out across the country. The threat of VAT is enough to make behaviour changes, if Labour bring this policy in then this situation will magnify.

Tbf, if you’re in the Cherwell catchment you don’t even need to pay for private at all(assuming you’re looking for academics).

Sadly we’re not catchment.

@Mia85 im sure the website is lying. The popular schools are over subscribed and full (see Cherwell, Swan). But the schools where you hear of riots and lockdowns (Oxford academy) and historically were terrible - but might be turning round(Greyfriars) had 1 and 2 classes worth of space free respectively after first round admissions (and then lost some of the pupils further when people accepted private places instead). Greyfriars in particular can take 150 per year but only has 80-96 in each year - year 11 stats from last year showed a graduation class of 86.

It is an interesting concept - the fact that a whole lot of annoyed private school parents can get together in an area, lobby the Council for a school for them all to go to, and then move en masse to that school. It would make for some great educational case studies in the future. I guess private school parents could easily connect via social media and do just that? Maybe a Conservative Council would be more obliging?

Where I live we all lobbied the council for a new state school. It took years but was eventually very successful.

Just goes to show doesn't it? One school that prides itself on neurodiversity fails a dc whilst the quiet unassuming one does a great job. I also had 2 with SEN, one of them his SEN was actually picked up at the indy school and they bent over backwards to support him, there were certainly some hair raising moments but he really thrived in the end. Out of interest, what did the new school differently? pls PM if you want just in case.

Well I have no direct knowlege of the situation and it sounds as if you have lots of direct experience so I am sure you're right. I wasn't intending to start a conversation about Oxford specifically but it sounds like quite a good test case for the consequences of this policy. Whenever anyone on these threads say that they had a choice between a terrible state or private people are always very scathing. It sounds as if that's precisely the position that some people allocated the schools in your email felt they were in. People like my friend, who have a genuine choice between a great secondary and great private, are then changing their behaviour in response to the threat of VAT in a way that presumably pushes more people into the schools where they feel they 'have' to do what they can to find an alternative.

I have heard (from school staff) that some independent schools are reducing their scholarship places or at least reducing the amount per scholarship for new admissions. It is often the scholarship children who boost results and make the school more desirable.
Some schools are cutting specialist staff and making subtle increases to class size.
They are also cutting discounts available to the children of staff members which currently as an incentive to retain good staff.
All these can leave the business in a better position to partially absorb vat increases for the first few years

The actual wording of their commitment is "Recruit 6,500 new teachers in key subjects to set children up for life, work and the future, paid for by ending tax breaks for private schools" It's plastered all over their website - they won't back down because to do so would be a gift to their opponents.
But it has to be said that, as far as VAT on fees goes, this is fundamentally a lie. The non-taxable status of education as a public good is not and has never been a "tax break" and adding VAT to fees passes additional costs onto the parents such that money goes straight from the parents to the exchequer, leaving the net revenue of the school unchanged: the schools aren't the ones that'll be paying.
Ending the questionable charitable status of (some) schools is a different matter. There is some basis to argue that this is a tax break.
Labour could keep to the letter of their commitment by ending the charitable status of private schools without adding VAT to fees. So what would seem to be the best angle of attack is to persuade them that adding VAT to fees is going to cause chaos (as it did in Greece), cost them money overall, and generate negative headlines, whereas ending charitable status would avoid such chaos, allow them to keep to the letter of their ridiculous promise and climb down without loss of face.

Tony Blair a) went to private school himself (Fettes College) and b) was clear that 'New Labour' was tactically moving to the political centre to make itself more broadly appealing. So while they initiated things like Sure Start Centres and Child Trust Funds for all, they were wise enough to not want to alienate those parents who are left-leaning/Guardian readers, but still choose a private school for their DC, for whatever reason.

'New Labour' is a dirty phrase though nowadays and VAT on private school fees is the kind of politics of envy catnip that lots of lefties lap up. Starmer has said he will enact it as soon as he gets into power and I don't doubt that he will, because post-Trump politicians are keen to throw red meat to their base as often as they can, particularly when they're new to office and keen to demonstrate that they'll do what they promised to.

Yes Blair knew he had to keep tax payers onside.

Starmer is more of envy rousing type as you say. Plus he won’t have much else to differentiate with.

There are 550,000 children in private school. I can’t understand the logic of trying to alienate that many potential voters in pursuit of a policy which will raise a relatively tiny amount of money. There might be some who’ll vote for Labour anyway, but I doubt very much that the majority of private school parents will vote for them, purely because of this policy.

In reality, I’m not convinced how many people are planning to vote Labour purely because of this policy. If they dropped this policy, would those planning to vote Labour suddenly change their mind? It’s unlikely.

Labour would get far more votes by offering voters a real alternative and hope for the future. By offering a country which will be better for all. Not just chucking out policies which are nothing more than the politics of envy.

I wonder how many voters that actually is, assuming some people have more than one child?
Does that include overseas students?
I would also hazard a guess that many private school parents already vote Tory and will do so anyway. I am not sure it's those people that Labour are trying to reach.

The great irony of this stupid policy is that it will make private schools even MORE elitist, because the parents who can no longer afford it will be those who scrimp and save and aren't part of the regular private school demographic. I know parents who will struggle if fees rise by 20%. I know plenty who won't, as well, but there really are private school parents out there who are driving old cars and rarely, if ever, going on holiday just so their DC can attend.