VAT on fees - will your school help current families who are struggling?

[rosegoldtoner]

I know there has been much discussion on here about this, and I really don't wish to ignite a debate about private versus state and if this policy is right or wrong...but I'm curious as to how your schools are intending to support parents who might be unable to cope with the increase on fees?

My DC's school hasn't yet been clear how large a percentage they will add to fees. It is one of the most expensive day schools in London with an extremely strong charitable ethos which is great. There are a number of pupils on full bursaries - the school's policy has always been that they offer 'life changing' bursaries - offering them to pupils that wouldn't otherwise have a chance to attend the school, rather than supporting families in other ways such as through academic scholarships or smaller sibling discounts, for example.

The school are aware that a lot of families are already pushed to the absolute limit - there was a huge parental backlash a few years ago based on the ever increasing fees, and the school have acknowledged in the face of VAT that many parents are extremely worried and might be left unable to continue to send their children to the school.

HOWEVER, the school seems to be continuing on with their existing bursary policy for new pupils coming into the school - whilst at the same time being unclear as to how they will support existing families who are going to struggle. This seems particularly upsetting when many families have been attending the school for many many years (there's a junior school as well) who might have to pull out their kids at crucial exam stages.

Seems to be the very opposite of 'charity begins at home'? What are other schools doing?

They can claim the VAT back on capital works, so if they are having major work done there may be some give. I know one private school that is only passing on 7% of the VAT charge to parents.

Also, I would say grades are ‘taken into account’ for bursary holders, but they are not under more pressure than other pupils to achieve really. there are not specific academic awards given.

Academic scholarships largely went by the wayside in terms of meaningful reductions in fees with bursaries becoming a more focussed attempt to help less financially privileged academic children attend independent schools.

Scholarships are still given based on academic/sporting merit but they don't come with the fee impact they used to.

@LittleBearPad As long ago as 2008, DD had an academic scholarship. No fee reduction at all.

There are 20 academic scholarships and exhibitions. Students take exams for selection. Further bursaries may be awarded to families if they excel in the exams and would struggle with the fees. There are no 100% fee reductions

Further scholarships are offered in dance, art, design and technology.

These are all offered for the senior school at 13+.

@StandingSideBySide - that’s so interesting. I’ve just dropped you a PM.

@rosegoldtoner is your school in west london?

If it is the one I am thinking about then it was set up to provide education for the poor (ironically) and hence bursaries for those from a disadvantaged background are a priority, not something extra that 'looks nice'. Some schools don't have a large endowment to provide this but instead rely on donations from notable Alumni, who donate with bursaries in mind and wouldn't want their money used to subsidise 'well-off' parents struggling with increased fees.

I feel a lot of sympathy for struggling parents and hope a solution can be found to help.

I mean typical "woke" boxes - our ethnic group is considered very disadvantaged. I don't buy into this agenda though so didn't want to go that route.

@Okisenough Some schools add bursary money into fees. So the just about managing to pay, pay more for people not that much different to themselves. It’s not just alumni. Many schools don’t have rich alumni.

@Ubertomusic - thank you for explaining. I am not aware that our school actively does anything similar - but I might be wrong...

@Okisenough - not in West London. Just to explain, I'm NOT against bursaries at all, I think they are brilliant and necessary, but I wonder where schools will have to make judgement calls between, for example - 'we are going to give a full bursary to pupils entering year 7 next year' or ' we will offer a small amount of financial support to help this year 10 pupil who has been at the school since age 8, who will otherwise have to leave the school as her parents can no longer afford it,' if you see what I mean.

It will be interesting to see what they do. As a parent who paid fees who like most day school parents are just normal middle class people with not much money spare having to pay the highest tax burden in 70 years including for state school places our 5 children never took up, plus school fees plus school fees being higher because the school is paying bursaries has never felt very fair, particularly as I always worked full time even when the babies were 2 weeks old (yes weeks not months) and some families with a bursary have a mother at home who does not even work

It's all about choices though isn't it Xenia? You had choices. No one made you pay that money. Your children would probably have had similar educational outcomes, given that having a middle class, educated mother is one of those key factors which indicate educational success.
Things aren't fair when you have no choice and control. You had both

Absolutely miffed by those who think the school should provide support to struggling parents.
If even 20% are struggling that would bankrupt the school.
If you are struggling put them in a state school.

what about those who have already made those sacrifices, all that you list?

and to factor that for the parents who are paying the fees from their salaries, the money has to come from post-tax income. Assuming that they are on the higher tax rate, do the numbers!

And not all schools are 30,000 per year. Some are half that and people who are not rich do try to pay those fees, and do not get cars and holidays, and perhaps have only one child so they can pay.

VAT and charitable status are completely unrelated. Adding VAT will not affect charitable status.

I believe charitable status gives exemption from VAT, Business Rates and Corporation tax.

@redrudolph - you would be ‘miffed’ if a school would attempt to support existing families? Why?

The new government themselves said that schools shouldn’t have to pass on the VAT to parents because the fees have risen exponentially over the years, but the schools seem quite deaf to that. There has been a culture of immense expenditure in recent years with many schools competing for the best facilities etc.

There is also unfortunately, a culture of greed in senior management in many private schools - many parents feel pretty miffed about that! Our head earns more than many parents’ salaries put together, gets a free house and free education for offspring. Headteachers do brilliant jobs - but earning very hefty salaries is a relatively new phenomenon.

I think the people who ask for help are not always the ones that need it the most. Our household will be significantly stretched by the increase, and I would resent being asked to additionally subsidise the increase for other families other than truly extraordinary circumstances. I would support continuation of existing bursaries (but limit / eliminate new ones) and would also support targeted short term assistance for children in key years who need to get through gcse or a levels. I am not especially keen to support the family educating 4 children from reception who are suddenly feeling over extended.

A great deal of the increase in cost has been escalating pension contributions. An increasing number of indies are opting out of tps, but it can be quite contentious and risks a massive impact on teacher retention. Coupled with general inflation, the costs of running a school have increased massively over the past 3 years.

no doubt there are management teams as you describe (greedy, not focused on value for money), but the underlying fundamentals are challenging across the board. I genuinely feel like our school are doing their best to manage costs, but it is difficult to do so without massively undermining the school’s mission.

yes, and if you can afford tv subscriptions, car tax, house insurance, putting 5% into your pension, a weekly food shop, then I'm sure you can cope with your child benefit being scrapped and being asked to pay £50 every time you visit the GP. And maybe a £500 per year contribution to the local schools. Chicken feed. It's not hard to find a few thousand down the back of a sofa.

No. Half of private schools are charities. They will have VAT added to their fees but their charitable status will be unaffected. Labour originally wanted to remove their charitable status but dropped that idea when they realised how complicated it would be.

But what is the point of keeping charitable status if it translates to just obligations primarily?

For the old public schools with large endowments it makes sense as they also get regular donations (gift aid) and inheritances (free of tax for charities).

However, small schools without that set up can they just voluntarily give it up and sell off to private equity etc? If it isn’t sustainable with the charitable obligations?

HOWEVER, the school seems to be continuing on with their existing bursary policy for new pupils coming into the school - whilst at the same time being unclear as to how they will support existing families who are going to struggle. This seems particularly upsetting when many families have been attending the school for many many years (there's a junior school as well) who might have to pull out their kids at crucial exam stages.

The children on 100% bursaries are probably very academic and will boost their exam results. Although bursaries are not scholarships, the reality is that most private schools, especially well known ones are not going to give bursaries to students who don't bring something significant to the school.

OP does your head teacher also teach for a token one or two days a week to qualify for TPS? Do you have a strong governing board with checks and balances in place? I think it is a largely voluntary position so I do worry about governance being robust in this time period. Do you have enough parent governors who eg are not conflicted (large scholarships for their own DC etc).

I am a bit worried that this commercialisation of private schools will lead to a lot of unintended consequences and I really hope someone in Government/HMRC/Charities Commission is going to track and supervise any sale of assets that this policy will probably lead to and that any beneficiaries will be closely scrutinised.