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?

Virtually impossible to change the catchment system - children need to go to a school that's within a reasonable travel distance. House prices increase when a local school's reputation is good - usually based on Ofsted reports, but also on hearsay. Not much the government can do about that - they could abolish Ofsted, but schools need to be inspected somehow, and presumably the results must be made public. If the results don't need to be made public, then that is the only thing that is going to stop the issue of increasing house prices surrounding desirable state schools. But there will still be hearsay and you can't stop free speech.

The school will have to drill down and make any savings they think necessary. If it is more profitable to open their pool to women in their 50's on spa packages/other private schools that may have had to close their pools for costs/business team games/tourists rather than the local primary kids only being payed for by the state on a budget, they'll do exactly what the article suggests.

Yep, totally agree that the admissions system needs a total overhaul and much more standardisation. Getting rid of faith and solely-distance admissions should be a priority.

Meanwhile the current government is consulting on proposals to make the admissions system even more skewed by removing the 50% cap on faith admissions for new free schools - which creates even more competition for distance-based places among kids who aren't the "right" faith for their nearest school.

That’s the privilege that labour politicians and their mates take advantage of, so no way will they do anything about that

10k pre-prep increasing up to 20k for senior school where we are.

I know plenty of people living in a single income 2 parent household who claim they could never afford it. If the 2nd parent got a FT minimum wage job it would be easily affordable but they don’t want to do that.

What they really mean is it’s not affordable without any effort or sacrifice. Clearly not everyone will be in that type of position but a lot more than you think are.

@EasternStandard do you have statistics to show that many private school families afford fees by scrimping or is that just a reflection of the people you know?

Parents want to have access to better schools. I know people will keep battering education until it’s all low level but it looks like no politician will do that

Exactly, hypocrisy at its best!

Totally possible to change the catchment system - there are enough weird incentives and variation by school that massively skew it anyway.

Ditch priority feeder schools, introduce demographic quotas that match the local population, have lotteries within a broader catchment area, ditch faith admissions - loads that can be done to reduce admission by house price.

’Some people’

Where did I say most @Pollipops1 ?

Getting rid of faith and solely-distance admissions should be a priority.

How then should the oversubscription criteria be written? First to apply gets the place? People will apply in a frenzy and then realise actually they can't practically get their DC door to door, so there will be a massive amount of dropouts. Or maybe there should be - deep breath - entrance tests? Surely not - I for one am totally against selectivism on any grounds. What else then?

How about a lottery system, you wouldn’t need to live literally at the doorstep of the school to get in? The last nice school’s catchment area I checked was 500m, this must be an absolute joke!

You can look at the % of DC on bursaries although that doesn't cover people in the same boat as ourselves and there is no way of getting that data.

Only time will tell on this one. It looks like it’s going to happen because it looks like it’s going to be a Labour government getting in.

I think going to be more complicated to implement than they think for various reasons so it’s going to have to be carefully thought about.

My main concern is that they are not ring fencing the revenue from this policy for Education. This absolutely should happen but unfortunately, it remains to be determined where the money will go. Some leaks are suggesting that they have overestimated the revenue to be gained and that it’s not going to be spent on Education but on other sectors.

Different definitions of “middle earners” I think. @Saschka true.

@Advent0range when I said who paid fees I meant full fees, didn’t think I needed to be explicit. Obviously anyone on a bursary may struggle with any increase.

Like Diane Annott for 1.
Plus there are twice as many Labour MPs who have been privately educated as the national average.

This is pure and simple an attempt to appease the socialist side of the party. The ones who still idolise Stalin etc.

So that's approx 20% of all private parents as that's the number on bursaries.
There only needs to be 10% of DC withdraw/not started for the VAT revenue to be £0. That would only be half of the current 20%. Bursaries will be the first things, our school has already said that they will only honour bursaries for existing pupils and no new awards for new starters.

@EasternStandard so it’s not just a reflection of people I know but you also know people who aren’t scrimping to afford fees. Great, glad you agree.

"My main concern is that they are not ring fencing the revenue from this policy for Education. This absolutely should happen but unfortunately, it remains to be determined where the money will go. Some leaks are suggesting that they have overestimated the revenue to be gained and that it’s not going to be spent on Education but on other sectors."

They quite clearly haven't looked at the impact even 1 in 10 private schools closing would have, not for pupils arriving on doorsteps of local authorities, facilities that would have been used in the wider community shutting down (pools/fields) and the subsequent influx of new families when those sites are full of houses and sold - will they be building new schools? Will they be giving LA's money to upgrade leisure facilities to enable swimming/football and other sports to allow those now needing it that option? I just wish they had some clear vision of how much they will save/spend and what they intend to do with it to help the fallout.

I've set out some potentials in a post above - you can have demographic banding, catchment based-random allocation - and getting rid of faith admissions would open up more local schools for all the local kids.

The Sutton Trust have done some interesting work on this.

It made the decision for us we have bought a renovation project in catchment to our best local school which matches the independent we were considering for results. It's cost us 100k but we will get that back when we sell in 10 years.

It wasn't the 20% vat but rather what next 20% this year fine, another 10% the following year where does it stop I don't trust labour and I don't trust the country not to vote them in.

We are lucky that we weren't looking at it for the connections or extra curricular but I can see the best state schools getting smaller and more expensive catchments.

A lot of our neighbours are going 1st choice local faith, 2nd local outstanding comp followed by private if they have to. The current furthest in catchment are the cheapest to buy so it will be those kids who lose out.

Honestly this constant pushing for lower levels for dc

It’s not going to happen.

If only Labour could see further than their noses, they would look to change the catchment area system, which perpetuates as much privilege as the existence of private schools.

how would you change this system? Particularly at primary level where parental involvement is linked to outcomes.

i know a mix which for some reason you don’t

As I said that’s not accurate

We went to see a 3 bed semi recently in a very desirable catchment area in London, the house required a total refurbishment and it was priced at offers over £560k with a bidding war going on…total madness!

that’s pretty cheap for London tbf.