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?

Doctors can barely afford the fees at our local private school. The majority are super rich. They are worried about the fee increase because they often have three or four kids there and that would be an extra 40k a year, but they'll pay.

If the money genuinely improves state schools then I don't have a problem with it.

I used to be a peri teacher in various private schools. I taught in a lot of all girls schools. They ALL became a mixed school because they couldn't afford to stay all girls. I know quite a few that have had to merge or close down. I'm not as hopeful as some of the posters here. X

I live in an Indian area of London and I don't know an Asian doctor whose children are not at private. London of course is different from around the rest of England not least because we also have many leading hospitals and people able to afford private medical care too and private hospitals of many kinds so , never mind vast numbers of people.

The bottom line in my view is that these top earners who have high earnings (no wealth) have been the group highest hit not just by tax but loads of other things like loss of child benefit, single person tax allowance and are the group also likely to have huge student loans and we are biting the hand that fees by proceeding with VAT on private school fees.

@Xenia At least doctors don’t have to fully fund their pensions! Could be worse! Many people use one salary for fees and second salary for living. That’s not new but the second salary now needs to be much higher or grandparents pay.

@neveraneasylife ,

People keep making anecdotal arguments about private schools struggling, and yet fee rises have been over inflation for years and yet the total number of pupils have been going up and up bar the very odd short term blip.

Yes, the demographic has been changing with more and more of the wealthy using them and fewer and fewer of the traditional middle classes.

But no one seems to have questioned fee rises until the money wasn’t going towards more luxury but to general taxation. Why did no one question fee rises of 8% when inflation was very low and teachers’ salaries were going down in real terms. No one questioned why the school needed a climbing wall or why the netball trip had to be somewhere glamorous abroad, or why professional musicians were brought in to enhance the school musical.

Yes the above paragraph is my observed anecdote and I know that not all private schools are like that. But what isn’t anecdote is the number of pupils attending private schools, teachers’ salaries and average fee rises, all across decades. This is actual data and easily demonstrated.

Maybe schools will have to become a little less luxurious, maybe pupil percentages will drop a percentage point or so as a percentage of total pupils attending the education system. But the worst will be a reversal of the last half decade or so of a 40 year trend, not some major breakdown of the system.

@Newbutoldfather
parents really did complain about/scrutinise the last 2 years of increases round here which were astronomical

You are correct though that pre-covid fees went up annually above the rate of inflation. We weren’t in the system then so I don’t know what the reaction was.

The point about setting above is interesting. One of the reasons I’m really not keen on our local comp is that it doesn’t set for anything other than maths and are just taught all their subjects in their tutor group. If you get a bad one, you’re stuck with it for all subjects for pretty much all of the years until year 10 when they move things around for gcse. My own comp was rubbish but at least heavily set so there was some respite from the disruptive kids in top sets.

Lots of my friends are v worried about vat as they really don’t want the allocated school but private fees becoming too much of a stretch. There are however excellent state schools within close moving distance. We’re a few years of secondary and people are choosing whether to move house to avoid the comp or suck up the increased fees and vat. The big move I think though will be from private to the excellent 6th form college. People who were thinking of 7 years are now very much thinking 5 years private plus state 6th form. The flows out of private won’t be felt evenly. The excellent states will become even more competitive and catchments will get smaller due to increased competition. That doesn’t scream ‘reducing inequalities’ to me.

The comprehensive where I did teaching practice was local for me, so I was allocated there. It was on the perimeter of a grammar school catchment, and some able students transferred for sixth form study if their grades were good enough.

But at 11, some private prep parents (mostly senior registrars) put their kids into the 11+ exam, and most passed. I did not personally hear that any were tutored for it, but it was a school with really good teachers that in my DC's year sent three/four to Eton; two to Winchester, one with an Exhibition Scholarship, plus about 10 to Sherborne, the same again to Bryanston. Etc. So the Tim Nice but Dim yet wealthy model fails, because all those schools are academically selective. The selection process really happens long before your child enters kindergarten: they interview the parents. My DM said this a few years ago: in 1959/60/61, when she entered me for a Montessori school, they were interested in her approach and reasons for applying, not in my aptitudes, because I was 3.5.

I was looked over. I could walk, talk and had been out of nappies for two years.

they are highest taxed but still very able to live a decent life due to jobs that pay very well.
What about the children of eg a paediatric intensive care nurse and a prison officer couple. There is no way that they will afford private school for their children, but by heck we don't want to be without people doing their jobs do we, where would we be then? Do bankers or corporate lawyers truly work harder than those two jobs? I have a friend who is a paediatric intensive care nurse and a few who are bankers and lawyers so I know the answer to that question.
So why do the children of bankers and lawyers get the advantage of what you see as an elite education but not the children of the nurse and prison officer. Why are the salaries for those very important jobs ridiculously low compared to what a banker/lawyer/savills London estate agent might get.
By the time I have grandchildren I want all children to have access to the best education because I think it will bring society up rather than be a race to the bottom as people claim on here.

@Oakandashsplash , the truth, as always, is probably somewhere in between the extremes. There were in DC's prep school, several kids who would have been selected on intellect alone for every school on the planet. And a lot more who were extremely bright. (I doubt you want to be told this, but so were their parents, who were variously, a techie whose algorithms run most of the western world's cyber-security, a venture capital bod, and several hedge fund managers. A former mayor of St Petersburg. And us, who were at the bottom of the pile as slightly techy plumbers (we maintain nuclear submarines)). Some were always going to Eton as long as they passed the test because their families always sent their sons there. And farmers, police superintendents, mililary, actors, one quite famous explorer, a widowed nurse, multiple estate agents, surveyors, medics, an MP, also a few QCs.

The bit that few will believe is that the school wasn't selective. It was, of course, it selected the parents.

@Oakandashsplash Money paid is allied to what you do, nurses have rarely afforded private education! My aunt and uncle did when running a pub. Times have changed. If people can get a highly paid job they will. Nurses probably won’t want the highly paid jobs or they would have tried to get one. Life is about choices. No nurse thinks they are going to get £250,000 pa but they can try and get the job that does. What stops them?

@TizerorFizz I would imagine what stops nurses and teachers and prison officers going for highly paid jobs that don't require amazing grades - ones like luxury estate agency or banking for example - are that they have a social conscience and community spirit that they chose to exercise through their work.
However what has happened to them in the last 10 plus years is they keep working away for the good of the nation, their pay doesn't increase, and their children's state schools are having the rug pulled out from under them due to unbelievable cuts. And the parents who are up in arms about the result of VAT on state schools were not on here helping them then. So the nurses, teachers etc voted with their feet via electoral role - not as many as the seats would suggest, but enough to finally have a voice after watching their schools be decimated.
I went to private school, I am not a private school hater by any means, but I do think that the larger, glamorous schools beefing up their facilities to attract wealthy Russian and Chinese students, do the bare minimum for local communities whilst the state schools suffer so hugely, was not really reading the room and has resulted in the labour strategy. If I was a private school parent I would be cross with the leaders of those schools - they have betrayed their sector.
I am not pro VAT on fees as I feel it hits the parents but I do feel these businesses should pay business rates. I didn't vote labour as I tend to vote Lib Dem but this wouldn't have put me off if I was a labour voter as I work in a speciality across both sectors so I see from the inside what has been going on.

Yes
https://www.thetimes.com/uk/politics/article/teachers-nurses-five-per-cent-pay-rise-above-inflation-mwf9pk6br

What a depressing view of society. Do you not realise that medical professionals could earn much more than they do if they had chosen another career path? It's just that money clearly matters a lot more to some than others. However, they should still be paid what they are worth irrespective of their motivations.

Uh? Yes. However what is someone with? Medicine has the best financusl outcomes of any degree (IFS study).

However never ever say the better off don’t pay their way. It’s their taxes that pay for doctors pensions and the nhs. We need everyone. Not just a few people in society. If they want money they can choose what career they want. For ever 1 place at into be a Doctor, 7 others want it too. It’s hardly a career people don’t want. Plus they go abroad - to earn more for themselves. Stuff the people who don’t out for their training and pensions. I think highly paid bankers have high level qualifications. We don’t want or need everyone to be the same but those who want to be nhs staff can be. Their choice. But they should realise who pays the bill.

But if we need everyone why should nurses / teachers / prison officers not be able to access equally good education for their children?
If we need everyone we should reward everyone with equal access to the things that matter - good quality healthcare and education.

"They should realise who pays the bills"
What a horrible way at looking at society. Yuck.

Sorry this is totally incoherent. I can't make any sense of it.

Do doctors not have high level qualifications @TizerorFizz or do the ones you need to save lives not count? What a totally bizarre post

@TizerorFizz have you had a sunny Saturday afternoon on the Pimms? Struggling to make sense of your post

Doctors who do private work at consultant level definitely can afford private education if they plan for it.

I could have afforded private education for my 4 DC if I had gone for partnership in my large law firm rather than professional support lawyer when the DCs were little. I chose not to and I chose state schools carefully and they have been excellent overall.

Most intelligent highly educated people do get a choice early on in their careers as to what path they take and how well they will be paid. For a while at uni, I fancied being a journalist and author, but knew my life style would be different. If you have top grades you often do get a choice and if your DC are also intelligent and you support them, many good state schools are perfectly good. I have rich friends who have chosen state and others with far less who chose private for different reasons. It’s not always obvious who will choose what. I also have friends who still tell me I sold out, which is rather childish.

I think there is a lot of anti private rhetoric going on from middle class people who went to private school themselves and somehow feel angry that they can’t afford it for their own DCs. I know a lot of them who work for eg the Government. They made a choice and they will get a far better pension than most of us in the private sector and none of them had to work 18 hour days and sleep under their desks like some bankers and lawyers I know used to do (and some still do it). It’s a myth that you climb corporate law and top banking without stellar academics and hours put in early on. And if I wanted to I could also go and work for the Government.

The one thing I really don’t like about the state education sector is that it can make moving house or jobs a nightmare. That part of it needs reforming. It’s inefficient in its current form. There should be extra funding for schools for people who are new to an area, especially if it brings new jobs and productivity with it.

@BasketsandBunnies and @charitynamechange i think what @TizerorFizz is trying to say is that everyone has a choice of career but also that everyone has to chose what is important to them because you can't have it all and if you go into a career you know pays less that’s just an informed decision you make. In the same way that I can’t choose to pay for my kids to go private and not pay for state school through my taxes because I don’t use that system even tho that does happen in other countries. But I can’t have it every way and I accept that. Actions just gave consequences.

I agree that people who choose to be medics could easily have opted for high level finance or city law. But they didn't probably because saving lives is more meaningful to them than worshipping money. I take that as a huge, huge positive and the fact that Tizer appears to be saying (although who really knows what they are saying) that they should remember who is paying their pensions is quite off. Maybe the bankers and city lawyers should remember who is saving their lives?

@BasketsandBunnies they probably do

I agree @BigBalloonsPop. It just gets my back up a bit when some posters put values on professions only on earnings. It is nonsense. Society needs a whole range of professions to function successfully.