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?

One of the articles linked was talking about huge increases in Surrey, which is why I referenced it.

It would be an absolute disgrace to apply for a state place you have no intention of taking up and would give the lie to the fact that you actually care about the private school pupils who genuinely have to move, as you will potentially take their place.

I never understand why anyone would choose private if it is on the margins of affordability anyway. Prices always go up above inflation anyway and ‘things’ can happen. I don’t think private makes sense unless you are confident that you have plenty of insulation from unexpected events and the inevitable fee rises.

The worst is making out that state schools are the worst thing possible to a child and then ending up moving them there. That is just incredibly unsettling.

I don't think it would be a disgrace at all. In fact I think private parents who already pay twice as it were should be entitled to all their free things and anything given out free to state schoolers.

May be the time has come to do what Blair did for my 4 year olds - give a voucher that can be used against private school fees.

@Xenia ,

So, basically, you would be prepared to be a total dog-in-the-manger and take another child’s desperately desired place to make a petty point?

The government won’t give a shit, it will just make the process messier for everyone else.

Brilliant!

The worst is making out that state schools are the worst thing possible to a child

In many areas, it really would be dreadful for a happy child to have to move to an available state school. In our local area, the only schools with spaces for in year transfers are either “requires improvement”, “inadequate”, or a “good” school where around 14% of pupils achieve grade 4 in maths and English. What is there to be achieved by a policy which pushes happy thriving children into a school which is likely to fail them? It’s a national disgrace that state schools like this exist. That needs to change for the children who attend. Pushing private pupils into them isn’t going to help improve them though.

I never understand why anyone would choose private if it is on the margins of affordability

It often wasn’t on the margins of affordability when they started down the private route. Inflation, along with the costs of living and interest rates, have meant that school fees are now far above what could have been expected just a few years ago, at a time where family finances are already being squeezed. An overnight hike of 20% is not affordable for many and wouldn’t have been foreseen when they originally chose private school.

Demographically Surrey probably has a higher % of higher earners though. In the NE the demographic definitely won't be the same level of income. Anecdotally, 10 kids in DDs NE Indy Yr 7 group have handed their 1 term notice in. They are bailing now as they simply can't afford to commit to the next 4 years to cover GCSE and it will be less disruptive to move now than in Yr 9

Which is why the article seems to show how well the what's app group worked - people in Surrey listened and applied for state school places even when they didn't need them or intend to use them.

It’s interesting how much special pleading there has been from families who are comfortable enough to have up to this point afforded private education. A majority of these families benefit from family wealth too, such as parental help with house deposits, higher education costs etc.

Exactly. That's why it looks so odd that state applications have gone through the roof.

You keep making this claim - what evidence do you have that these queries or applications are from those that don’t need them?

What is the point of applying for an unneeded place?

Do people think Starmer will just change his mind?

To me, if you do that, you kind of prove that you don’t care about the state sector or any other private school children who genuinely need to move.

It is just totally counterproductive.

For most of the Surrey dwellers I know, tightening a belt would look like cutting back from four to three holidays per year, turning down the heating on the pool or maybe selling off a pony. They wouldn't dream of taking their kids out of their independent schools.

Maybe their children had SEN that the parents thought maybe better met in a smaller private school so stretched to try and afford it? Or are a single parent needed the longer days and holiday care generally provided in a private school?

Things are not always straight forward

The word 'seems' in my post suggests that I am asking questions not giving definite answers.

Many of these parents will be considering:

a) can I afford the 20% increase
b) what happens if enough kids leave that DC's school becomes inviable
c) what is the potential state offer and how does it compare with the indie.

If you've always been in the private system then you may not have ever bothered looking at what is available locally in terms of state schools.

Either way, you would want to be one of the first applying rather than the last if you are having to move.

I suspect there will be quite a number who move if they get a great school and don't if they end up with somewhere undesirable. In the same way that I know a lot of parents who had DD's comp down as their state back-up. About half then took the comp place and turned down the indie offer, and the other half did a lot of weighing up and ultimately went for the indie.

I suspect very few are applying just to make a point. Most will be weighing up the options.

I have read the article @Oakandashsplash - it only shows a rise in enquiries and in-year transfer requests. It is your own baseless assumption that a significant portion of these are not genuine. And your statement seems pretty definitive - not seeing any questions in any of your posts.

Again, I'd be mighty surprised if it's a full 20 per cent that gets passed on. This has been coming down the track since first mentioned in 2021. If, 3 years on, schools haven't managed to find ways of minimising then they probably ought to be sacking their business managers.
Businesses have to cut their cloth all the time. And independent schools have been raising fees above the rate of inflation for years, while demand for places continues to keep pace. Hopefully they've been investing that money sensibly.

There are around 40,000 privately educated children in Surrey. That article says 582 parents enquired about state places. That’s less than 1.5%. The IFS have estimated that 3-7% will leave because of VAT. It’s likely that most of that 1.5% in Surrey are genuinely considering state places.

There is another way of addressing SEN. When I had DC in mainstream state I used to despair at the nonSEN parents who had no interest in supporting me but just wanted my DC to go away because they took away teaching resource or because their DC were roped in as positive role models or to model learning etc or just had to put up with the disruption caused by unmet needs. If only they had accepted my DC legitimate need to be there they would have supported increased funding for SEN instead of hoping they would be excluded. This is the reality. Few parents can afford indi.

Maybe we should look at the whole picture - how many DC go private because of unmet need, how many illegal exclusions because of unmet need, how many DC in PRU because of unmet need, how many HE because of unmet need. My DC with an EHCP had a bespoke package for HE/internet school because of unmet need.

So lots of SEN DC return from the private sector. Good. It will help shine a light on the fact that parents are paying through fees or loss of income to HE the failure of the state funded MS to meet SEN need even where DC have an EHCP. Bring back state funded special schools.

Where's in reality, Bridget Phillipson one of her first tweets 'let's mainstream more SEN kids, inclusion yay' yes, because it's going so well! Just another effort to cut special places and close special schools to reduce council funding crisis labour have inherited.

The gap between what should happen on SEN and what is happening is only widening so far.

Point me to the data that says mainstreaming has improved outcomes - i'd love to see it as all my experience of it has been bad. There must be some...otherwise this is cost saving just dressed up.

Here we go - no, making inclusion work for your existing cohort should be your first priority before you expand it...fix the current SEN crisis and not by pushing more children into mainstream to cut costs.

Anyone would think from this thread that private schooling is an additional provision for SEN, rather than a sector offering experience/added grade value at a heavy price!

Most private schools won’t even look at extreme needs and, when they do, often at prohibitive additional cost.

They offer a very good service to those with marginal needs (mild dyslexia, mild dyspraxia). They really struggle with ASL and ADHD though, as these pupils can be disruptive and the other parents won’t pay the fees if their children’s lessons are disrupted.

Specialist private schools will, I am sure, be exempted from VAT.

Well you're missing the point that SEN does come with a heavy price tag regardless of who pays... regardless of the VAT debate as many people as possible need to keep an eye on the councils being asked to cut SN places to mainstream so that they'll get bailed out from their funding crises.

Starmer has already said private special schools will not be VAT exempt.

He did say kids with an EHCP will be exempt - although suspect that will rapidly become 'kids with an EHCP with a named school where fees are paid by council'

@Newbutoldfather there are a number of private schools that have exploited a niche market in my LA.

They are not big selective schools and are in rural areas where the market has declined. The LA has no funded appropriate special schools for DC of normal cognitive ability who can't cope with mainstream, say autistic.

'Normal' private schools won't touch an autistic DC with additional need even if they are cognitively advanced.

But a small non selective indi will take them when parents pay and in my experience the LA will agree to fund where parental choice is OOC specialist indi.

VAT on private school fees highlights this.

The issue is SEN teaching and funding not VAT - but VAT refers back to the original reason why SEN children are in the private sector. And now those parents are (disproportionally) pissed off. If I was being harsh I'd say you should have stayed and fought. But the battle is long and education for your child is short. I prioritised my DC, HE, internet school, brick for A level now he's due to start a MEng degree. I stayed and fought for DS1. It didn't end well.