To have though of a fairer way to fund state education than VAT on private?

[wlakaaf]

State schools are in desperate need of funding.

Money needs raising.

Instead of sticking 20% onto private fees - when those people are already paying 100% of the costs for educating their child, how about this:

Parents of children currently in state schools ought to contribute to their education on a means tested basis. There would be no argument over means, it would be a simple reference to the council tax band of the house you live in. We have bands A-H. I would propose that people in band A-F pay nothing. People in band G pay a fixed charge per year and people in band H pay a higher fixed charge per year.

Keir Starmer has used money to buy a massively expensive house, worth in the region of £2m, in the very tight catchment of a lovely state primary. This is buying privilege, same as buying private education. So why does he get away without paying?

Don't think any LAs allow tutoring for 11+ in state Primaries

Do you seriously think that a few more people using state schools will magically "solve" the bullying problem which has been a problem for decades??

Special exemptions exist in areas where a state grammar is the only secondary school for miles. In some LAs the children of farmers can apply to any school. These tend to be millionaire catchments though where the state primaries give a private type education.

No they are not, but they are already forking out huge sums on privately educating their dc saving the state purse in the process. Parents will be paying the VAT not the schools. Why should they then be expected to contribute even more?

However given the perfectly valid argument that you have made I’m sure you’ll agree that university students should also be subject to VAT payments. After all, universities are not charities, and should be taxed accordingly. Many make huge profits so the money is clearly there (unlike a number of struggling independent schools that will be finished by VAT on school fees).

Personally I’d have no objection to this as it would feel much fairer and it could potentially raise more money. And I say this knowing my own two kids would be affected. It doesn’t seem quite so pointed when everyone is contributing rather than the same few.

All universities are charities and none of them make profits. Where are you getting your information from? They are all established by royal charter in order to confer degrees and these pretty much all say they are establushed for the purposes of conducting research and delivering education (individual institutions will vary but you can check the wording of the drafting of every single one online if you like). Research and education are charitable purposes under the Charities Act 2013 as a result they are all incorporated as charities for tax reasons.

we have one private university in the UK - Buckingham. If they weren't charities how would Oxford and Cambridge have been able to hold on to their massive endowments for as long as they have without being taxed out of existence? No business could afford to have so many illiquid assets as that.

In addition the only students who have to pay fees upfront in England (remember fees aren't charged to Scottish students at cost) are international students. Home students are all entitled to a government backed load which the vast majority take out. As a result the bulk of uni funding comes in the form of a govt grant of approx £22bn a year which is only partly recouped in loan repayments from graduate over the subsequent 30 yrs (40yrs from 2025 when the loan repayment period is extended). However, the vast majority of graduates never repay their loans so in effect the govt always coughs up the bulk of uni funding from general taxation - I can;t offhand remember the current valuation of the student loan book but when they privatised it a few years ago the maintenance fee loan book alone was worth a ridiculous amount, that's all the money the govt has already paid out and not recovered. It would be insane to add a 20% tax to a fee that is being paid out of general taxation in the first place.

You could in theory charge intl students 20% more but since their fees already cross-subsidise home students it would not be very sensible, especially as unis have total discretion over the rate of intl fees they charge so the obvious solution would be to charge the market rate for the course, carve 20% out as 'VAT' and return it to HMRC and have less in the local pot to fund institutions which are already struggling with short and long-term funding crises because their funding hasn't increased in real terms since 2015. Their fees of course have not risen with inflation unlike private school fees, the only rise since they started charging the consumer the full cost of £9kpa in 2012 has been a rise of £250 in 2017.

I don't even work in a uni, I just have two kids at uni so made sure I understood funding before they went.

The 'but but but but private schools are just like universities' argument is ridiculously weak. Universities are all founded to do research which is a charitable purpose in its own right, and universities are all equally open to the public i.e. anyone in the country can apply and receive a govt backed loan in order to attend. They do not just exist to educate children of extremely well-off families. And let's be clear the median household income in England was £32,300 post tax in 2022. If you can afford private school fees for one child even with scrimping and saving you are already in a very high income bracket, you are not just getting by.

Having read so many of these threads and all of the vitriol amd naivety, part of me is just waiting to see this unfold as Brexit part 2 in terms of how it will backfire. Well, at least I would if it wasn't for the fact that children will be affected.

That's it - it's that Leaver's glee at other's misfortune.
I'm alright Jack attitude.

State education isn’t free. It comes from the working population. Those choosing to go private and pay are paying for a luxury, so VAT it is. Charity doesn’t mean allowing the peasant children to use your pool once a week, it means raising money for something, by doing something, like, I dunno, state schools do.

@Ozanj "Special exemptions exist in areas where a state grammar is the only secondary school for miles. In some LAs the children of farmers can apply to any school."

I didn't know either of these things! Could you say some more, please?

People who can afford houses of that value will obviously have a higher income thus paying an enormous amount of tax
so they are already funding the privilege you describe

if your looking to raise money schools spend a fortune on pastoral care and literally parenting kids due to shit parents who don’t step up .
If they parented there own kids the schools could use the money they spend on pastoral care educating kids rather than parenting them

I don't think there are any G council tax houses in my town. Everything is back to backs and terraces.

Education benefits everyone in the country and should be funded through general taxation.

Increasing the basic rate of tax would be the fairest way to go.

Economic change happens at the margins. Any policy you introduce will change the calculation people make about their own circumstances.

For most people, it doesn't make enough difference to change their behaviour. What they were previously going to do is still the best choice for them.

But for some people, an extra 20% changes the balance on what's the best thing for their family. So they obviously make the choice which is now in their families interest.

High nursery fees mean that a family weighs up how much money a 2nd salary will bring in + the advantage of staying in the workplace for future earnings versus the out of pocket nursery fees. If nursery fees go up by 20%, then some families will still go ahead, but other families who would have both gone back to work at the lower cost will decide that it just doesn't stack up, and one parent will SAH.

It's the same with private school. The family weighs up private fees and both working full time (with guaranteed wraparound and plenty of extracurriculars at school) versus the state-plus model of one parent working part time to support taking kids to lots of extracurriculars and tutoring to supplement state school. Like for nursery, if fees go up by 20% then some families will still go ahead, but other families who would have worked full time and gone private at the lower cost will decide that it just doesn't stack up, and one parent will go part time and do lots of extracurriculars and tutoring.

What's likely to happen is that the extra 20% will mean some families stay part time and choose state-plus over private for their child going into Reception, Year 7 or Year 12. A few will change for children already at school, but no one wants their kids disrupted - so this will mainly affect new choices, so will ramp up over the next 7 years.

It is a much better idea. Everyone contribute little bit to their school so it can be better. Like prescription fees.

I've got an idea! We could all contribute some of the money we earn to a common fund to provide services we all need. We could call it...oh, I don't know....income tax? The amount we pay could depend on how much we earn.

We don't all need the same things, of course, but it'd all even out.

Universities are for the most part ‘exempt charities’ which gives them all of the perks with limited responsibilities. If, as you say, you’ve looked extensively into university funding for your own dc then I assume you’ve taken a look at the accounts too. Even a cursory glance demonstrates the huge profits made by decent universities. Yet as you quite rightly say, our taxes are propping them up. Surely it would be more sensible to look at this before increasing tax on the relatively small number (that will undoubtedly shrink further if VAT is implemented) of parents with children in private schools. But that affects far more people and isn’t a policy built only on resentment for those better off so obviously it couldn’t possibly be fair or viable.

Never catch on. We've spent the last half century trying to erase it.

Explains patiently - exempt charities are not charities with perks but no responsibilities! They just are not required to register with the Charity Commission because the CC CD not possibly regulate them as a charitable trustee of long experience I know the quality of cc regulation is light touch to fecking useless! Whereas university education and research activities are actively regulated by the Office for Students and Research Excellence Framework. None of them can make profits. I don't know what accounts you think you are reading. Like all not for profit organizations they can generate surplus which they use to make significant capital investment or to offset sudden emergency expenditure, many of them were left much poorer as a result of covid. But they don't have private or public investors receiving dividends from the income they generate.

Whereas the lucrative parts of our Indy school sector are stuffed with private investment.. tragically the lucrative parts are not parts anyone is paying for upfront. They are highly specialist schools for children with significant MH, SEN and behavior support needs, often ASD being placed out of area by LEAs who do not have local provision for them in their area. Charging fees of up to £250k pa for the placement. Most of these aren't charities but backed by massive overseas private investors - if you want to spend some time usefully.looking up accounts look up something like SENAD group and ask yourself why our taxes are being used to pay dividends to Qatari investors when LEAs fail to provide appropriate education for children with SEN.

People on this thread are quite right. Mid ranking indys charging 20-30k in fees to parents which may or may not have private status are a v vulnerable market outside the SE and a lot have folded in the last two decades. They can't get private investment but most can't operate effectively as charities and adding VAT to their fees mean more will close. Leaving the large public schools with a lot of intl kida attending to survive. Whether you think that's good or not is a personal opinion. It's irrelevant to me, my kids are too.old and i.live in an area where the indies closed after the 2008 crash anyway.

But the other chunk of the indy market that the state uses heavily is specialist schools which prob only account for 0.1% of kids but enormous amount of SEN budgets, and whacking 20% on that will be catastrophic. At the same time there is no good reason anyone should be profiting in that sector so forcing it's collapse may be desirable. But it's hard to see how that can be done without severely disrupting the education of extremely vulnerable children.

What about those in big houses who don't have school aged children? Also, parents sending their children to private have the freedom to choose where they send them. With state, there is usually no, or very little choice. Terrible idea op!

But I get the sentiment behind the idea. We have friends with an awful lot more income and cash than us who use state schools and just plough the money into their pensions. Yet nobody is questioning the tax they pay to fund their kids' education.

Having read so many of these sodding threads lately and tired of the whinging about VAT and also about house prices and catchment areas, can I please put in a word for those of us who don't have catchment areas. Where we live (rural SW England) there is one state secondary school and you either go there or to the Private school 20 miles away. Parents and children live in a variety of properties and still manage to go to school together. Surely this is the whole point. The kids learn to rub along with people from different social and economic backgrounds which prepares them for life. MN is so unrepresentative sometimes.

@Bigcoatlady thank you.
I do also think these "mid range indys" often provide green spaces and pools and other facilities to local schools. We have 1 high end private that I don't think will close, alongside 2 mid range that get very similar results, that I think will close (or one at least). Have Labour considered the issue that if these close and developers swoop in, they are not going to be able to keep facilities and pitches to use for local schools Sports Days etc? I think there are so many knock-on effects people aren't considering alongside the individual issues the poorer children are facing, on a community level.

Tax needs to be perceived as fair. And everyone who pays tax should benefit from what it's being used to pay for. Otherwise the government loses buy-in and get into all sorts of trouble (remember the poll tax).

We have progressive income tax, since as a society we think that's fair.

Deliberately targeting a small group of people you don't like for an extra tax isn't perceived as fair - by those unpopular people at least, who are already paying as much tax as other similarly wealthy people.

Similarly, taxing households extra to use publically availabile services - especially the huge ones like state schools and the NHS - based on their income or wealth would be perceived as unfair. ('why on earth am I paying so much tax for services I don't even get to use?').

Tax is a bit of a dark art. How to get the money the state needs without distorting behaviour in a way that excessively reduces growth (and hence tax take), and without losing citizen acceptance.

The Labour scheme is bad. Your proposal is also bad - sorry.

Adding to basic rate income tax with a guarantee that it will be used on education would be much more sensible.