Whitehall “braced for private schools collapse”

[ICouldBeVioletSky]

Whitehall ‘braced for private schools collapse’ due to fee rises

Worth reading the whole article, it’s not quite as alarmist as the headline suggests. But as you’d expect, gov sources are talking it all down while the ISC is ringing the alarm bell.

https://www.thetimes.com/article/e6465c9e-d462-48cb-a73e-74480059a1f3?shareToken=05bf599cd4a2376fe3ce83cdce607100

I’d be quite surprised if some of the schools near us don't fold tbh. There will definitely be a contraction in the sector, I just hope those that hold on can remain a viable concern.

Surely you can understand irony.

It’s pointing out that breakfast clubs and an extra 1/3 of a teacher isn’t going to solve the issues in schools. It’s all headline grabbing without looking at the real issues that need sorting.

For starters, why don’t they look at why teachers are leaving? No use getting new teachers in if you don’t have experienced teachers to train them.

Do you think breakfast clubs are for middle class children? Do you think that teachers are bringing in food themselves to feed students because their middle class parents can't be bothered? Or have you encountered real poverty, because if you had, you wouldn't be laughing at cracks about bowls of cornflakes. Instead you'd be taking it at a signifier of OP's wider attitude.

Of course, breakfast clubs aren't the sole way of fixing education, but pointing at them for laughs is pretty telling.

Of course, breakfast clubs aren't the sole way of fixing education, but pointing at them for laughs is pretty telling.

But trying to ridicule children calling them Tarquin etc, just because they go to private schools as other posters have done, is perfectly acceptable then? In both scenarios, it’s children being spoken about. I don’t see many posters jumping to the defence of the private school child though.

As for my opinion, yes the schools are in a mess, yes there’s poverty, children hungry going to school and teachers bring food for them etc. I still think the VAT policy, or more to the point, how it’s being spun in the media, is laughable and the electorate are gullible if they think it will make any difference to what goes on in state schools.

Perhaps the government should focus the additional education spending on them then, rather than using large amounts of money to fund school breakfasts of the wealthy.

My post - again, very obviously- was not “pointing at” hungry children/children in poverty “for laughs”.

It was mocking and ridiculing the Labour government for
a) suggesting that 1/3 of a fictitious teacher* per school and
b) free breakfasts for middle class children (again: read the article and the statements made by Starmer)
will make any meaningful difference to the dire state of the education system.

Even free breakfasts for children in poverty doesn’t begin to scratch the surface of what’s needed - it would be great as part of a package of radical reforms - but it seems this is more or less the sum total of what Labour’s planning. And yes, that is a joke - a very sick joke!

Why are you directing your anger at me instead of at the government for fundamentally failing state educated children and their families?

*No doubt you are now going to tell me off for ridiculing fictitious teachers. 🙄

Just paid school fees plus VAT. I’d love to see Exactly where that cash goes from now on.

Will Labour show any traceability of the VAT on education?

Rhetorical question.

My children do not go to private school and I am strongly against this policy. I am confident that it will make zero difference to the quality of state school provision, which in many instances is of good quality.

I am against VAT on the provision of education. Education is for the benefit of all society. The EU does not charge VAT on education, as their policy of fiscal neutrality prohibits treating similar services differently for VAT purposes.

i am against economic policy causing children unnecessary distress for zero gain. Why was this policy brought in, in the middle of an academic year? Vindictive and outrageous to target children in this way. Other major taxation changes, are given plenty of notice so that organisations can bring in the changes.

i am against groups being pitted against each other by government. It’s a smokescreen well used by the powerful. Pit the plebs against each other and they won’t pay as much attention to the woeful job government is doing. The inadequate funding of state education is entirely the responsibility of our government. It is not the responsibility of parents who for various reasons have decided to pay for educating their own children. I see no good reason, why fee paying parents should be punitively taxed by the state when, they are actually assisting the state - by reducing the burden on the overall tax payer.

i am for transparency in government, rather than being spoken to in soundbites as if I had limited capacity to understand.

I would have appreciated a proper analysis of core areas that required further funding and realistic proposals about how this could be funded. It will take billions to sort out SEN provision, but I have heard nothing about this. This government is pretending to do something BIG with this policy to hide, that they are doing virtually nothing.

i am for taxing areas of life that have a negative impact on society, such as gambling. Why is there no VAT on gambling?

Our country is poorer in the aftermath of Brexit and this is projected to continue. We need radical ideas about how to either raise more money (increase income tax? Historically this was not considered radical). Or radical ideas on how to cut the costs of government? Less provided by NHS? Incentivise parents to use private school?! Obviously Labour would not do the latter, but many countries do, in recognition that it lessens the burden on the state.

in general I am in support of the state funding less, individuals who can and business funding more - within reason. I therefore cannot understand putting VAT on education for the first time. A policy that uses economic levers to actively push tax payers who had chosen to fund their own child’s education back into state education, where the government has to fund it. Where everyone else has to fund it! Total nonsense.

Brilliantly - and very comprehensively - put, @CatsRuleTheWorldForever

👏👏👏 @CatsRuleTheWorldForever

Well, you're in the substantial minority https://www.theguardian.com/education/2024/dec/31/labours-private-school-tax-plan-strongly-backed-by-public-poll-shows

Please don’t waste your time posting articles by the Guardian. Enough said. Having said that you took the time to post it.

A cursory glance through the article gives the following info. Out of 2000 people polled 54% backed the idea of taxing education for the first time. Hardly a ringing endorsement of such a controversial policy that upends years of consensus in the UK that education in any form should not be taxed. I am surprised, I honestly thought that support would have been significantly higher. Gives me hope for the electorate.

Predictably the government describes this poll as. “Overwhelming support”, and continues with the lie/blatant marketing rebrand of describing it as removing a tax break. Surely with the amount of coverage this policy has gained, even the most disinterested in politics would be aware that you cannot remove a tax break on something that has never been taxed before?

indeed before the UK left the EU it would have broken EU law to tax education. Of course the majority of the Labour Party MP’s at the time, wished to remain in the EU, seeing it as a protective element from the extremes of the Conservatives, with the added protection of the European courts. I guess it shows that politicians twist with the wind. No newsflash there.

So despite my misgivings I learnt something from that article. Barely more than 50% support for a new government with a flagship policy. Surely once the sharp elbowed labour middle classes are priced out of desirable school catchments, class sizes grow and SEN increases in state schools, that % of support will drop. We must remember that only the children who have been forced out of schools and parents struggling to pay have been impacted yet. Everyone else is but a bystander. Easy to support something when you have not personally experienced any difficulties yet.

There will be many state parents like myself with strong reservations about this policy.

Labour has often cited "independent" research by the IFS as backing its policy. It seemed strange to me that the IFS could have produced such balderdash. It's much clearer to me having read this.

https://order-order.com/2024/10/07/independent-labour-supporting-private-school-report-written-by-ministers-close-friend/

Guido Fawkes? a very pro Tory/right wing think tank... "Labours class war" in the first sentence, says it all.

So the extensive criticism the IFS gave to Labours manifesto and spending plans re no mention of black holes and vague tax plans don't count either?

Or do you just pick n chose who you believe, dependent on what they write?

All the "anger" over school fees, reminds me of the stuff written about how Labour will erase womens rights and women themselves on here... never happened, wont happen and Labour have tightened up on things like puberty blockers

Brilliant thoughtful posts @CatsRuleTheWorldForever . It’s a nice change from the spiteful, gleeful posts on so many of these threads from some of those who the VAT won’t affect.

I’d just like the thousands of pounds I’ll be paying to actually make a difference to the state sector, especially to SEN. We all know it won’t.

https://ifs.org.uk/news/system-funding-special-educational-needs-broken

From the same author who thought taxing private schools was a good idea.

• “There have been large increases in spending on fees for independent special schools. Spending by local authorities on fees for pupils in independent special schools is up by over £1 billion or 138% since 2015, reaching at least £1.8 billion in 2024. This only accounts for a small number of pupils with EHCPs (nearly 30,000 in total or 5% of pupils with EHCPs). However, placements are extremely high-cost in independent special schools (£61,500 per year, on average) compared with state-funded special schools (£24,000). Local authorities have probably had to rely on such provision because of capacity constraints in state-funded special schools and a lack of effective provision in mainstream schools. (..)
• Reforms are required, but costly and complicated. Reform is likely to require a significant expansion of the core SEND provision available in mainstream schools and an expansion of state-funded special school places. Such reforms would require big changes to the education system. Any transition to a new system would also be costly as it would likely entail some double-funding in the short run.

• There have been rapid rises in highest needs. The number of school pupils with EHCPs rose by 180,000 or 71% between 2018 and 2024. As a result, nearly 5% of all school pupils now have EHCPs. This rise has been driven by three specific types of needs: autistic spectrum disorders (ASD); social, emotional and mental health needs (including ADHD); and speech, language and communication needs. The rises in ASD, ADHD and mental health needs all appear to be global phenomena across high-income countries. This could reflect increases in need and/or better identification of needs.”

https://ifs.org.uk/news/removing-tax-exemptions-private-schools-likely-have-little-effect-numbers-private-sector

Reminder of the original report.

Where the author has clearly missed a significant point, is that it is not how many in the private sector leave in total or who fails to join, but what their SEND needs are that matters. There is no analysis of the types of schools affected in the private sector by this VAT and this is where the ISC is right and the IFS is wrong! And this is also why it is likely to all go horribly wrong. It is not the ISC using “SEND” as an argument to their advantage, it is the reality of the situation.
The state sector is not ready for an influx of more SEND needs, far from it. All private schools with lots of DCs with SEND need protecting from VAT in the short run at least. The EHCP exemption Labour have given is far too narrow!

No one is right or wrong yet, both reports are best guesses but i would have thought the ISC is most likely to be the one that will have the most built in bias.

What i don't quite understand is that schools fees have shot up far more than inflation over the last 15 years but numbers of pupils has gone up.

Schools could of course, change very slightly how they teach and arrange their days ie larger classes, offer less extra curricular activities but they don't appear willing too, even passing on the full 20% despite being able to claim back VAT... why are they doing this?

“Schools could of course, change very slightly how they teach and arrange their days ie larger classes, offer less extra curricular activities but they don't appear willing too, even passing on the full 20% despite being able to claim back VAT... why are they doing this?”

By law they have to add 20% VAT. For those who are cost cutting temporarily this year, they will still have to add big chunks of business rates and now the NI on employees next year anyway, plus TPS costs for those still in it.

In addition, City of London or Eton for example have a lot of children on partial bursaries so they are having to pay the VAT themselves on the bursaries - someone who was only paying 10 per cent or 20 per cent off school fees based on their incomes, cannot suddenly be expected to pay 10 per cent of school fees plus VAT. So the schools with the most bursaries have no choice but to pass the VAT on, if they need to maintain those existing bursaries. In the future, they will have to offer less bursaries.

even passing on the full 20% despite being able to claim back VAT

As per one of my earlier posts, most of a school's spending is not subject to VAT. The biggest single item is staff costs, accounting for 70-80% of a school's outgoings. Some other outgoings will be exempt from VAT or zero rated. Most schools will only be able to reclaim a relatively small amount of VAT.

“What i don't quite understand is that schools fees have shot up far more than inflation over the last 15 years but numbers of pupils has gone up.”

In London, I think it is rich immigrants primarily. Most of the private schools are very international.
Elsewhere, it would make sense that if the state has failed SEND, then plenty of parents had no choice but to opt for private schooling, or if the local offering is poor, then the same applies.
As others have also highlighted, for many it is cheaper to send 1-2 kids to private school then to move house and pay stamp duty for a good catchment. It is a combination of those factors that have kept percentages steady.

However, cost of living now, the fact private school fees plus VAT have increased often by 50% in just a few years, changes everything for many people. Especially with working from home patterns and ability to pick up from primary school at least and the abundance of increasing online tutors as well. In addition, to the concern to save for university funding beyond that. If you look at all those factors, it is quite clear that the sector will likely contract substantially and that the VAT will be the final nail in the coffin for many who may otherwise have used private schooling.

It is undeniable that the state is getting a fantastic tax break if eg a parent of an autistic child self funds their private secondary schooling at 15k a year and the child can cope in that environment.
The alternative for the state is that same child starts in a big state comp, fails miserably, develops mental health problems as a result and the state ends up having to fork out the 60k plus for independent specialist schooling, as highlighted in the IFS report as being some of the figures local authorities are having to pay.
Every parent in that position who has intervened before that happens has done what is right for the child AND for the taxpayer. Most likely, without a burn out that same child may go on to do well at university etc and into gainful employment.
The huge long term negative cost implications of this VAT policy for some children are potentially horrendous.
Every person who has some conscience has called for all children with SEND to not have to pay VAT (or at the very least, exempt smaller schools with high proportions of children with SEND).

A traditionally left wing media outlet says that around half (54%) support it. Hardly “substantial”. In any case, many supporters don’t understand the very basics of VAT law or the specifics of the policy, or how the private sector works (including lots of those on Mumsnet).

@Araminta1003 even more cynically, I suspect that child fails out of school, poor attendance, gets few exams and then ends up as yet another young person who is discouraged from leaving home and working.

The consequences of this are dire and will be seen for years.

That group of young adults will be increasingly hounded by benefits cuts to try and beat them into getting some sort of job - labour are already starting this attack.

It's a dystopian future that's arriving.

I’m don’t think it is particularly helpful to compare the average cost of state SS to the average cost of independent SS. DC in independent SS often have needs that can’t be catered for in the state sector and the provision they need is often more costly. It would still be more costly if they were in a state school. And DC in residential placements are more likely to be in the independent sector.

£61.5k is still relatively ‘cheap’ when you consider the cost of some SEN provision. I have 2 DSs with EOTAS/EOTIS, both their packages cost in excess of double the average SS cost. Some SS are over £100k or even over £150k pa.

Posting ‘class fighting’ articles by the guardian is as sensible as posting ‘immigrant related’ articles from the daily mail. Grow up.