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?

Labour did want to remove charitable status from schools, but I think it was basically impossible to implement wasn't it? (without making an illegal communist-style land-grab of assets which don't belong to you, anyway - which a democratic western government really can't get away with)

Perhaps an easier thing would be to keep the charitable status but then mess around with how charitable status changes taxation? Still tricky to hit only the wrong type of charities - avoiding unintended consequences - but probably no more so than adding VAT to only part of a previously exempt area.

And agreed that it would have less of a negative impact, since it would be very little money. And presumably it would hit the bigger endowment-rich schools more than the small SEN-catering regional schools, so less likely to take schools out of business.

Does anyone know if Labour have defined what they are including as 'private schools' for VAT purposes?

Have been talking to some friends who have children looking at L3 BTECs for 6th form where there is a top-up fee of a few thousand payable over the state funding.

Also what happens with tertiary education colleges/universities where they offer their own non-accredited diplomas and professional certificates alongside CertHE or degree courses? You can access the normal government loans for the latter two, but the diplomas and other courses are funded privately by the student.

Do these come under private education for Labour's VAT bonanza? If not, why not?

There’s around 50,000 international students, so let’s assume none of those have a vote. That takes the number to 500,000 children. Let’s assume each child has 2 voting parents (it will be slightly less). That’s around 1m parents. Average number of children per family is 1.7, which means there’s probably around 580,000 voting parents. I think people would be surprised at how many private school parents are left leaning.

In addition to parents, there are around 150,000 teachers and support staff employed by independent schools. Given the risk of job losses and cuts, many of them will not be in favour of this policy. On top of this, grandparents of privately educated children are unlikely to be in favour of the policy.

Originally, the Labour Party voted at their conference to abolish private schools altogether. Supporters of this are still senior figures in the Labour Party. They then realised it was nigh on impossible to achieve.

They then decided they’d strip schools of charitable status. It took them a couple of years to realise this wouldn’t have the desired tax effect, largely because many schools are not charities anyway.

This latest plan is their latest shot at harming the sector which they hate.

I doubt the Labour Party know the answer to this. They really haven’t thought through the unintended consequences or legislative problems that the policy will bring. It will be a shambles, and one which raises little, if any, money.

Governments shouldn't make populist policies just to win votes. They should be identifying policies which actually work for the country as a whole, and don't demonise or unfairly target a subsection of the population, even if they are a minority and unpopular.

That's mob rule.

How about: anyone who lives in the countryside has to open up their home to a city-dweller for free in the summer! After all, per-capita government spending is higher in places with lower population density (because the same public services can only cover a certain size geographical area - with fewer people), so it's only fair they make it up to us city-dwellers! Why should they get all the fresh air to themselves?

Anyone think that's a fair idea? There are definitely more voting urban-dwellers than countryside dwellers and it could be a vote-winner. Everyone loves a free holiday at someone else's expense.

Sorry, I really should have quoted @EarthlyNightshade who suggested that this policy is OK because it won't lose Labour many votes (rather than @Another76543 who suggested it might be more parents than you think)

I absolutely agree. I’m trying to understand the logic of a policy which has little or no economic benefit, and in fact could end up costing the taxpayer. The only other reason would be to win votes. I’m not convinced that the policy alone wins as many votes as they think though.

I think it does sadly. Because it stirs emotion rather than sense.

Also Labour have very little left if they remove it. What would there be in terms of policy? Not much. Some extra trafficking but the watered down green stuff has fizzled out.

Two child benefit stays, no bonus cap stays

My question is if no funds are raised how does the state sector deal with extra students without the promised teachers?

Edit to add. They probably don’t need it anyway but will cling to it despite damage

Oh it’s definitely simply a ‘this is a nice sound bite that focused grouped well as a Robin Hood type thing’. This is why Starmer, Reeves et al are still far behind Blair and his team, they left this well alone and focused on the core game of boosting state education. But current labour have so little money to play with, populist policies that tested well are all they’ve got.

There is a good podcast called "Nice White Parents" which covers exactly this scenario, albeit it's about New York. Basically, a bunch of parents who realise that they won't make the cut for the "good" public school due to catchment boundaries agree to apply for an undersubscribed school en masse, with the view that parent power can make it better. It's worth a listen and is a cautionary tale for those that argue that an influx of engaged parents into a school will improve state education for all children- what basically happened was that these parents did get on to the school about many things and fundraised tirelessly, but in doing so advocated almost entirely for their own children and their interests rather than the broader demographic.

I didn't say it was ok, I was just wondering about the numbers.

And I still don't think it will lose Labour many votes but we shall see when election time comes.

Thanks for the podcast recommendation that sounds really interesting.

That's interesting @LaPalmaLlama about the podcast. When my dc were in state school, I was very active. Went in every week to do guided reading with the children, volunteered for school trips etc. I sensed they were always very cautionary about offered help and didn't like 'suggestions' that could make things better. There was not a lot of wriggle room for parents to make a difference to be honest unlike in the private sector. A suggestion to invite in e.g a native african drummer to demonstrate to the children & learn about the culture on 'International day' was met with quick arrangements being made by school and the students had a wonderful educational afternoon. Likewise, fundraising suggestions from parents were met with positive responses. A parent could donate to a school and help build a music dept! When Dyson wanted to donate £6m to his old state school and it was rejected because the LEA felt it was cause numbers to drop at neighbouring schools.

Point is state schools are constrained by government guidelines and LEA regulations so i always wince when mners wax lyrical about all the changes private school parents will make if only they all moved to state. It's not that easy infact nigh impossible in many cases.

@LadeOde I had the same experience in state, and endless meetings along the lines of ‘but it’s not fair for us to x because school y has different parent cohort and it’s not fair as they can’t raise this money’.

’we can’t do x because not all kids in the school (v wealthy catchment) can afford to participate…etc etc.

one parent meeting, a group wanted to veto buying books because ‘that’s something the council should do’….

to say nothing of the subjects simply missing and not staffed in the state sector.

many people do subscribe to that view, that thugs need to be fair which is great but it is a levelling down in practice.

My DCs went to a church primary state school that has always been outstanding ever since Ofsted existed. It has former pupils go back as teachers. They have encouraged and accepted no end of help from parents. It must vary very widely. I know the head at the local prep and she had nieces in our state primary and she told me it is as good as the prep, due to the loyal staff and supportive parenting group and very active PTA. Note this state school also put on a full show during Covid and run their own admissions. It varies very widely in the state sector. Some really have very engaged parents and welcome it.

The problem @Araminta1003 Is that state schools with that kind of ethos/culture are few & far between. There's not enough of them for every catchment.
There's a certain feel to schools where old students go back to work and have loyal staff who've been there for yrs, this is something a lot of private schools enjoy. The indy my dc went to his friend became head of house, the boy's father was an old boy & he too had been head of house, including his uncle. When it was discovered, they took a photo of all 3 standing in front of the school which was quite amusing but added to the whole family/community feel of the school. They were all personally invested in the good of the school.

@LaPalmaLlama i expect that’s how it would work here. If it could be organised. Parents will always advocate for their own kids and if the others get a benefit, well that’s all well and good but not exactly the primary aim.

If the parent don’t feel they are getting the benefits of their work, they will stop engaging with the school (and focus on extracurricular advancement) or will move on to another ‘exclusive’ club/school. It would be one hell of a fine line to tread.

@Validus and that is exactly what happened in our case. We disengaged in the end as we felt our offers of help weren't really welcome. So we went private. I think for state schools to really enjoy the benefits they can get from parental engagement, LEAs & the school boards /Heads need to work on a proper strategic alliance that will enable this to happen. When parents offer help, schools should be doing all they can to take advantage, not offering all the reasons why they can't.

I think ethos/culture really matter and so does leadership.

I have a lot of friends who teach in top private schools and what I would say is that it is the teachers there who have been there for years who really make a school. You know the Head of Music who runs 4 concerts a week and does umpteen trips every year too and the Head of Maths who is actually properly interested in the weaker students enjoying Maths rather than just getting a 7, 8 or 9 and growing in confidence and the Head of English who has mentored and changed the worldview and outlook of your children etc.
Now some of them have been complaining about a recent phenomenon in the private sector too of big new CEO style heads coming in and commanding big salaries etc. What I would be most worried about as a private school parent right now would not even be this gimmicky Labour policy. I would be most worried about it changing the ethos and culture in those schools and not valuing those staff who really make the schools and the experience so special. What you all need to avoid is what has happened in the state sector of rich academy bosses firing great staff to save cash and creating an all round crappy situation for the many and staff leaving in droves.

Point is state schools are constrained by government guidelines and LEA regulations so i always wince when mners wax lyrical about all the changes private school parents will make if only they all moved to state. It's not that easy infact nigh impossible in many cases.

Yes.
I remember a thread in which a poster described the old alumni associations at private schools and their successful fundraising, and suggested state schools do the same.
Every possible reason was given by posters as to why this wouldn’t work, who would do the fund raising, who would take on the organisation of the old alumni association etc.
However, I hadn’t realised that James Dyson’s extremely generous offer to his old school was turned down so maybe there’s no point trying to raise funds for state schools.

I have a lot of friends who teach in top private schools and what I would say is that it is the teachers there who have been there for years who really make a school. You know the Head of Music who runs 4 concerts a week and does umpteen trips every year too.

Yes. My dd’s piano teacher gave my daughter - and many other pupils - a love of piano playing which she will have for the rest of her life - or while her fingers last out.

At the end of the day, school fundraising and parental engagement isn’t considered a core part of any teaching job in the state sector.

my dcs’ private school otoh has someone whose job it is to coordinate alumni, parental engagement, fundraising etc.

unless something is seen as a core part of someone’s role, it’s the exceptional state school that does this well.

added to that @Araminta1003 the staff cuts that will result from falling numbers in the non ‘public’ schools will hit on music, art, drama, library etc staff the hardest, all the non-key subject staff that can make a huge difference to some students.

They can hate it all they like but the private schools are an institution in this country that actually attracts a lot of foreign money, creating many local jobs, I cannot believe that someone would be as ignorant about economics as that to have actively lobbied to close this sector altogether, it’s like saying I don’t like the Ivy League universities, let’s close them.