Whitehall “braced for private schools collapse” 6

[ICouldBeVioletSky]

Continuation of previous threads to discuss VAT on independent school fees.

The overall effect also depends on where in the economy money saved on school fees is spent (I don’t believe it would all be saved), whether any VAT or other tax is charged on that, and whether or not it benefits any other parts of the economy. Nothing happens in a vacuum.

Of course you're right that the 8.5 million children in state schools are already costing the government £8k per year each on average: £64 billion total. And since Labour doesn't want to increase that, then state schools will have to make redundancies to fund teacher pay rises, and councils will continue to struggle with increasing SEN costs.

But Labour's policy is making things worse than they needed to be. The money they could have used to increase per student funding - as numbers fall due to demographics - will now be used instead to educate extra children: whose parents would have paid for it themselves.

A drop in the ocean? Maybe. Labour didn’t seem to think so though when they claimed that the £1.3bn they claimed they would get was worth throwing those kids under a bus for. But when it becomes an extra cost, it suddenly doesn't matter. Oh wait, that wasn't an 'acceptable sacrifice', was it? It was by design.

Schools themselves, of course, need pupils - the more full the school, the more money it gets, the greater the economies of scale. A class of 15 in the state sector is a budget deficit situation - state schools are not funded in order to be able to afford small class sizes and they generally aren’t allowed to pick and choose their pupils, so we are heading for large classes of children with minimum staffing levels.

Well the £8k extra the government has to spend now that they pay for the child's education isn't really up for debate. Only how much of the extra £4k the government tried to extract they'll still get: ie how much of the amount parents previously spent on education for their children they'll replace with buying extra VATable consumer goods like new cars (not 2nd hand) versus reducing hours, paying more into pension, or going on holiday (or slightly nicer 2nd hand cars)

Oh right, so the number of private school students moving is so teeny-tiny that they don't cost the state any extra to educate, but they're still enough to change empty 15-student classrooms into perfect 30-student ones. That really doesn't make any sense..

And schools don't need extra pupils. They need the government funding which the current funding formula associates with those extra pupils. Giving that same funding to the state school without forcing children out of the private schools their parents were paying for themselves would obviously be better for everyone.

You do talk nonsense. I didn’t connect 11,000 pupils leaving the private sector with the fact state schools can only afford to operate in this climate if they are full. Nor did I say state schools need extra pupils because extra pupils are a good thing. You are the only one making those bizarre leaps. I simply pointed out that state schools (not the state, but the individual schools which are trying not to go under) do benefit financially from being as full as possible (as in, quite literally cannot afford not to be full to bursting). As a result, a growing number of state schools are being shut down. This currently affects the primary sector, but will very soon be a feature of the secondary sector as the school age population drops. Given the paltry amount of money VAT on school fees was hoped to raise in any event, in the big scheme of things, this whole discussion is just an obsession of a tiny minority of people who apparently have no more interest in the 9.5 million other children in the country than those 9.5 million children have in the 11,000. 11,000 children is just a drop in the ocean of 9.5 million - the Government can afford to massively underfund 11,000 more places. The question is, how much would it actually cost to fund all of the places adequately?

Govt funding doesn’t exist if there aren’t enough pupils in the classroom, your arguments are quite flawed

The funding per pupil is only the education budget divided by the number of pupils. Since there are no plans to increase the total education budget accordingly, more pupils moving to state just means that the amount of funding per pupil goes down. The existing funding just has to go around more students. How is that bringing more money in? Added to that, after a certain point the new pupils cost money as they need more teachers, there’s more pressure on resources, etc., so logically a school only benefits if they only add few enough pupils that they don’t have to increase costs too much. If the new pupils have any SEND needs but no ECHP, the school may actually lose out from having to fund additional SEND provision.

Here’s an example. Imagine the following:

There are 1000 state school pupils, and the total education budget is £20,000 in total. Pupil funding is £20 per head.

School A has 100 pupils and as government funding is £20 per pupil, school A’s 2025 funding is £2,000.

20 new pupils join from the private sector to make 1020 pupils overall in the state sector. The total education budget is still £20,000. Pupil funding per head is now £19.60 each.

Two of the new pupils join School A, which now has 102 pupils. £19.60 x 102 is … £2000.

School A now has exactly the same funding as before, but now has two more pupils who need resources, teaching materials, chairs, desks, pencils, and so on. Maybe one of those pupils needs extra help from a TA, plus time out in the sensory room, plus some special 1-1 provision for mild dyslexia… And suddenly the school’s budget is actually more under pressure than before those children joined, except they haven’t actually brought any new funding with them. School A just has to do more with the same budget as before.

Now do you see how it works…? The new kids don’t bring new magic money. All the money just has to stretch around more kids. As more kids come in, the per capita funding for every child goes down the following year.

The government figures assume that 100% of the school fees saved by parents leaving private schools will be spent on goods on services subject to 20% VAT. That was quite clear in the IFS report, which the government based their figures on. They’re assuming that not a single penny will be put towards savings, foreign holidays, university tuition, paying off mortgages and other borrowing, or pension contributions etc. That assumption is quite clearly nonsense and one which anyone with even an inkling of economic understanding can see is unrealistic.

The government sets the funding formula. It can quite easily change it.

You saw the thread title, right? Feel free to create another thread about the "imminent collapse of state schools".

Funding per pupil is what the Government commits to, so it’s nonsense to pretend it will ever let funding per pupil go down because there 8,000 more pupils joining the sector midway through the academic year than predicted. Also nonsense to assume what they have committed to the 2025-26 tax year per pupil will now change to go down. And state schools have PANs (published admission numbers), so they know what number than can go to and what is most cost effective. In primary schools, in KS1 the max permitted class size is 30. This means the school needs 30 children per class in KS1, because it’s 1 teacher per class, regardless. It’s not rocket science to know how many children are required… As for KS2, a school can go over it’s PAN where physically possible (eg big enough classrooms), provided the extra children do not have expensive needs, but when going over PAN, a school has an element of choice on whether or not to accept a child. In secondary, schools will just get rid of less mainstream subjects, so reducing choices.

I think you do not understand how state schools are funded.

I saw the thread title and am helpfully pointing out to you that there is no point talking in an echo chamber. Also, you ought to take more interest in the problems of the state sector if you really cared about the 11,000 extra pupils joining it.

And someone has to care about the education of the 500,000 children in private schools, given that the Labour Secretary of State for Education has made it quite clear she doesn't. It's fairly reasonable for their parents to care, don't you think?

The 9 million children in state education not only have their own parents caring about them, but also the entire focus and care of BP and the Labour government. Not to mention the entire £69 billion of schools spending.

And now it's come out that some of those 500,000 private school children are being denied medical care in the supposedly-universal NHS. Which is disproportionately funded by their parents, by the way.

I think I'll keep my focus right here, thamks.

But clearly the Labour Secretary of State cares about those 500,000 just as much as she does about the other 9 million or so. She just doesn’t care about them any more than the rest.

Oh, and as for children with more expensive needs, I think the Government hope is to pretend those needs don’t exist and don’t need extra funding, and to blame schools for poor behaviour and results.

Hmm... so you're saying that she's introduced a policy which will make the families of the 9 million state-educated children deliberately poorer, causing a significant number (probably at least 10% it seems) of those 9 million children to face the disruption of leaving their schools, deliberately started it at the most disruptive time possible, even for those doing public exams...all for absolutely no benefit for anyone including no net improvement in public finances?

Do tell, what is the equivalent harmful policy she's introduced for state school children?

I mean, I know she's cut language and STEM programmes in state schools, but that's only one of their exam subjects being disrupted. And at least the cuts will actually save the state a few pennies - in the short term at least - unlike the VAT program. It isn't an equivalently harmful impact.

Oh, and has BP used deliberately devisive, hateful language about state school children? Said that they need to suffer so that 'our children' will benefit? Boasted about never having set foot in their schools?

No. She might be a shit education secretary for all kids, but it's very clear where her priorities lie.

She seems to be making 11,000 of the families richer.

And I think if you took any interest in state education, you would know what harm is being, and has been done, to state schools and to parents of children with SEN. Schools are increasingly expected to deal with the consequences of overstretched social workers, police, NHS, 2-child child tax credit policies, etc. In the big scheme of things, privately educated children moving into the state sector are just more collateral damage.

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In cash yes, but not in economic utility.

If those parents preferred state school + saved cash on fees over private school, they would have chosen that in the first place.

Hence their overall utility - or satisfaction - is lower due to the government intervention.

But they do prefer state school + saved cash on fees + not paying new tax over private school + new tax.

Basic economics.

State education is not my problem to solve.

Stupid policies which directly harm my family whilst bringing no benefit to anyone are where I choose to give my focus.

Of course, it’s that attitude that brought society to where it is, now. Privately educated children having VAT on their school fees are not the overwhelming majority of people’s problem - until they are, which they currently aren’t. It takes a while to go through redundancy processes, close schools down, etc, so as nobody apparently needs to care about anyone else, I guess none of us will find out what harm has been done until it’s too late, will we?

Basic economics says that, with the increasing cost of living, a fair number of the 11,000 already couldn’t really afford private education and already weren’t particularly happy about the sacrifices they were having to make to afford it. Basic economics says you can’t always have what you want.

It would also be interesting to know how many currently leaving the private sector are planning to save up and return at a later point in their children’s education when they consider it more important (or decide state, or home, or hybrid education, are worse than they thought).

Not really. We have one of the most redistributive tax and benefit systems in Europe.

And also the worst productivity, as a result.

That's brought society to where it is now