Whitehall “braced for private schools collapse” 2

[ICouldBeVioletSky]

Starting a second thread as the first one is still very busy, albeit it's veered off in a few directions...

Original article

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

Just had a look at the RBS fees calculator.

Household income of £45k and 1 child has boarding fees of £3,720 a year.

So the VAT is £744 a year.

On £60k, fees are £6,414 and £1,283 VAT

Apologies if this has already been mentioned but Godolphin Prep in Salisbury has also announced its closure.

The VAT policy actually stated that the parents would have to pay the VAT on the FULL school fee even if they received a discounted place with the MDS.

“The full fees of pupils in receipt of funding through the Music and Dance Scheme will be subject to VAT.”
https://questions-statements.parliament.uk/written-questions/detail/2024-08-30/3387/

Full boarding fees are £38k so parents would have to pay £7,600k in VAT even if their child had full MDS funding. Therefore excluding talent from low income families.

Just one of the many reasons why it is such an ill thought out and rushed policy!

Crumbs - that is just totally unreasonable.

How could someone who is on a totally fee-free place come up with a sudden 8k a year. (And anyone else for that matter, but this is even more insane... the state funds the fees to make it affordable, and then hits you with a VAT bill).

It's expensive enough just in shoes if you are very low income.

Unreasonable is one way of putting it!

This could open the flood gates. If lower income music and dance has been changed then if you have a sports or academic high ability child you could argue that the policy for these children should be changed too.

After all does it matter what the talent is in? There are lots of sports specialist schools that I would imagine will contest the policy on these grounds.

I also note this is not an exemption. Families are set to receive ‘financial support’ to pay the VAT.
So the government is paying then?

So much for making money to fund state schools!

They are no where near collapse. But if theoretically it did. And everyone had the sand opportunities then ok ...

Surely the best approach to giving everyone the same opportunities is to improve state schools rather than driving independent schools out of business. Under the last government the gap between state schools and independent schools was closing. The current SoS for Education seems determined to stop that.

I have read and agreed with dozens and dozens of posts by @prh47bridge across the Education boards - I think she is by far the wisest among us!

Exactly this. I cannot understand the attitude that we should make everyone equal by dragging the top down, rather than by bringing the bottom up. Whatever people’s opinion of them, the majority of independent schools provide an excellent education where children are happy and thrive. Why on earth do we want to harm that sector? If the policy raised money for the state sector, I could almost understand it, but it doesn’t. The IFS have confirmed that taxing the private sector will make no difference to public services.

There have been several independent schools which have collapsed just this month alone. Anyone who thinks that the policy won’t cause further schools to close is living in a fantasy world.

Sorry, should have said “he or she”…!

The schools in the recent post had less than HALF the total needed viable pupils already. They would have shut over the next year or so anyway. They’re just not successful schools 🤷🏼

This is not directly attributable to labour policy, Let’s be clear the schools that closed were already unviable & failing. Schools were Losing money, inadequate pupil numbers

Most independent schools operate with narrow margins, and there isn't much "cloth to cut". The threat (and implementation) of a 20% tax adds to these challenges by pricing some families out. Schools like these can't afford to lose too many students, which means this pressure was too much to bear. VAT is acceirating the loss of pupils.
IFS said 2-3pc margins. The governments position was that schools can absorb VAT (plus business rates, NMW and NI) but never saw fit to explain how. Reality: either parents, or jobs, take the hit, or the school closes.

Previous school closures were smaller, more recent types and balanced by openings. The volume of closures of larger, long established schools is unprecedented.

Some schools were just about managing. The VAT, and now the NIC/living wage changes, have pushed them over the edge. Without the government policies they may well have managed to stay afloat, as they have been doing.

Without the government policies they may well have managed to stay afloat, as they have been doing.

With the increased cost of utilities & falling pupil numbers due to lower birth rates it's unlikely.

Not to mention the cost of pension contributions to the TPS if they haven't already left.

Godolphin prep is merging isn't it?

@Heathbear the prep is closing but it’s part of a merger with a local prep school which will be the feeder for godolphin senior school.

oh yes, the pension burden is huge & also the need to remain competitive pay wise with the state sector

10 indy schools now announced closures since 1st Jan.
"FoI data suggests an exodus is already underway, with 124 local councils in England, Scotland and Wales receiving 3,011 applications from private school pupils to move to a state school between June 1 and September 9.
The figures are likely to understate the scale of private school exits given a further 83 councils either did not respond or said they did not have the data.
Independent Schools Council (ISC) chief executive Julie Robinson has accused Labour of 'underestimating' how many privately educated pupils would leave as a result of the policy, with the Treasury previously predicting the figure would be 3,000 for the entire 2024-25 academic year"

Is it really any wonder that ISC chief executive Julie Robinson has accused Labour of 'underestimating' how many privately educated pupils would leave as a result of the policy? Hardly a neutral observation. Many of the schools that have closed were teetering on the edge of going bust in any case. Of course argue against the policy but these kind of arguments are easily blown apart.

You only have to look at the facts and the actual figures posted by the previous poster to see that the government have underestimated the figures. It's not a matter of opinion; it's fact.

To reiterate what I have previously written:
Most independent schools operate with narrow margins, and there isn't much "cloth to cut". The threat (and implementation) of a 20% tax adds to these challenges by pricing some families out. Schools like these can't afford to lose too many students, which means this pressure was too much to bear. VAT is accelerating the loss of pupils.
IFS said 2-3pc margins. The governments position was that schools can absorb VAT (plus business rates, NMW and NI) but never saw fit to explain how. Reality: either parents, or jobs, take the hit, or the school closes.
Previous school closures were smaller, more recent types and balanced by openings. The volume of closures of larger, long established schools is unprecedented.

Here is my theory again:

1. Starmer knew full well this would be challenged on Human Rights grounds. It was red meat thrown to the left of his Party, as the “private school” question was as age old to them, as the Brexit question to the Tories. The moderate Tories were all too comfortable that a Referendum would swing No on Brexit, as it would have been crazy to go the other way;

2. What Starmer and the rest of the moderates in his party have underestimated is that Farage and Co are lurking ready to pounce to discredit the Human Rights Act and the champagne socialist who are not working for you, the poor working class Brit. And your breach of your manifesto pledge. Cannot even get the private school lot because of the Human Rights Act?

3. the fallout from all of this, is quite scary. Just like Brexit.

Is there a link for this? Was wondering whether it includes Surrey as I saw a week or so back that they already announced that they couldn’t meet demand for what I vaguely recall being 1700 or so places?