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?

That is quite a steal!
Most 1 or 2 bed flats are more than that in areas with good schools.

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

As I said that’s not accurate

I would argue it’s pretty accurate for most in London. If you can afford 20k a yr I don’t think 4k is a tipping point. We will have to see if labour get into power and if it happens what impact it actually has on numbers.

Is it, God knows how much it would sell for, £560k was the floor price, and when I say total refurb, I mean unliveable. In my view, it’s diabolical.

I wonder where it is?

£560k was the floor price for basically unliveable property, don’t know how much it will go for as we weren’t interested to join in a bidding war.

So do you know people or just assuming?

@twistyizzy put some numbers in pp already

How about a lottery system, you wouldn’t need to live literally at the doorstep of the school to get in?

some schools do operate a lottery but then you get people complaining that they live locally and didn’t get a place.

put some numbers in pp already

Actual data already? How is that anything more than assumptions?

That's really interesting. Mine are at private school and more than a handful of their friends have said they won't be able to stay with the price increase.

Lottery system or wider catchments, anything that wouldn’t require me to live at the doorstep of the school to get in, in some areas catchments are 500m, beyond ridiculous.
Not sure what you mean by your other comment about parental involvement.

You can look at the % of DC on bursaries

I don’t think looking at dc on bursaries is in anyway a reflection of overall pupils who attend private schools.

People can campaign/lobby to change admissions. More people will likely be invested in that vs private school VAT.

Enrolments for private already impacted due to policy likely incoming, it was reported today

"Due to" is doing a lot of heavy lifting in that sentence.

You seem to have no idea of how many SEN students are in independent schools - some specialist SEN, some not. Paid for by the state through EHCPs.

These are not children from wealthy backgrounds who have chosen luxury.

Did you say you worked in education? Apologies if that's not you. But if it is I suggest you go and have a chat with your SENCo. You can normally find them in school from 7am, leaving around 6pm when they are chucked out by the site teams.

In the times article

So forecast estimates have ranged between 5pc and 25pc.

Now this is 2.7pc OBSERVED behaviour. This is before the election and before any announcement. Hard to argue this supports the lower end of IFS 3-7pc range. More consistent with >10pc. And Adam Smith paper indicated >10pc makes zero revenue.

So there is already actual behaviour change of 2.7%. Not forecast. This is actual behaviour before Labour have been elected but in anticipation of it happening.

You'd be surprised. Trying to get people involved in campaigning on this is bizarrely difficult.

Not sure what you mean by your other comment about parental involvement.

DC are more successful in school when parents are actively involved/engaged. So often good performing schools particularly at primary are a reflection of those that live in the local community.

There is a massive lack of transparency @RespiceFinemKarma that’s for sure.

People are also not realising that it’s the only education policy put forward by Labour at this point. That says a lot!

I think people are being blinkered by the “let’s take from the rich” usual narrative of Labour but not actually realising that, none of us know exactly what the plans are, and there is no contingency if it goes massively wrong.

The institute for fiscal studies have obviously hugely underestimated the impact of this policy. Last month, a survey was conducted to accompany the Saltus Wealth Index report and it is now estimated that 26% of parents will remove their children from independent schools and put them into state education should VAT be imposed. (For further information on this, there’s an article in The Times).

Ha no chance. I love that people are trying to explain it in other ways though

Some aerated Labour supporter got all exercised by Cameron going to private on Times radio this morning and said that was why

Why are you looking for other factors? Surely it’s what you wanted?

What did you think would happen

I'm holding off on going private to see what happens. I could afford the increase in fees but in principal it would piss me off...so the state can fund my daughter's education for a bit longer!

No but it is a significant % ie around 20-25%. Therefore it follows that 20-25% of parents aren't easily affording the fees without VAT.

People live locally now and don’t get places either, if they live on the “wrong” side of the street, or a few numbers down just outside of catchment. At least with lottery, it’s fairer, and isn’t it fairness that Labour wants, or do they just want to tweak decades old laws that suits their agenda.

Wait - I thought everyone earlier was saying parents have had years to plan for this?

Anecdotally I know one child who has been taken out with her parents putting her into a grammar to "avoid the rush". It's an extra 20 min daily commute for them and the parent can't drive them any more and the results are no where near as good, but their parents decided they don't want to be tied to boarding termly fees and are instead keeping their options open with jobs offers (London and abroad) because they have a younger child not yet in the system.

@twistyizzy but I thought the article said potential VAT could be one reason? It’s not certain & lower birth rates will be impacting as will increased mortgage rates. How do you ascertain the 2.7% is only because of potential VAT?