Whitehall “braced for private schools collapse” 6

[ICouldBeVioletSky]

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

Did you want those closures though?

Nope. And neither would I want businesses to go bankrupt or childcare settings to close etc, but sometimes a tax rise is the last straw for a struggling organisation.

All aspects of this discussion have been had before, and neither of us will change position, so I’ll leave it there. Enjoy your Saturday.

More closures are coming in. But you seem adamant that’s ok due to this policy.

What a shame.

No I don’t want schools to close. Yes I want an education tax.

The earth is flat. I have seen pictures of the Earth from space.

Do you see the problem?

I did wonder if at some point those who wanted the policy would see closures and reassess given they say closing is a bad thing.

People are very fixed even when schools are closing.

Some schools will always close, as I evidenced. Yes, some are small and some are religious, but plenty of perfectly ordinary private schools close every year.

I know of one on Chelsea, thought there was a niche and more demand than there was. Opened, couldn’t fill itself, closed about 3 years later.

Demographics change, new schools open in competition, fashions change in mixed vs co-ed and schools are no longer in demand. And of, course bad results can easily be the demise of a private school.

Yes, VAT will cause some additional schools to close and, on a population level (not a pupil or parent level), this is not a disaster.

There is also plenty of economies to be made in the vast majority of private school to keep them viable. People will keep saying this isn’t the case, but if a state school can manage on £8k per pupil (secondary) a private school which charges 2-5x that amount can economise.

They’ll never admit it. It’s about as likely as Reeves or Phillipson visiting a school to explain to a group of 5 year olds that their school is closing for a bowl of cornflakes.

How soon might figures for the 2025 academic year be available? If you're enrolling or continuing in private school presumably you have to commit or leave pretty soon (to avoid losing a term's fees).

I recall Starmer doing that lawyerly lie of ‘no evidence schools will close’ pre GE.

A post below shows a 125 year old school closing.

How many before people say yeh it’s a bad idea.

@EasternStandard Is that Queen Margaret in York? Yes that’s two closed in the last 2 days. Bishop channler was 75 years old. Closing the schools is the long term aim of the policy. Once the middle class are mostly out of independent schools, they’re more vulnerable. It’s probably a second term thing, but when Eaton announces its opening a school in Ireland you’ll know they’ve got wind of what’s coming.

It’s never been about raising tax revenue or improving state education, it’s all nonsense and they must think the electorate are stupid. The spite came first and then they looked for a justification to make it more palatable. Labour (including Rayner & reeves) voted in 2019 to abolish private schools and redistribute their assets. In their anger at these children, they also voted to increase business rates and introduce an education tax. I’m not sure how they planned to tax something they abolished, but it’s worth a go when you’re dealing with an enemy of the people as cunning as a six year old in a boater.

When governments need tax revenue and also need to make savings, they don’t reverse policies that people have got used to. Hence the two-child tax credit limit currently remaining and it being highly unlikely a subsequent government will remove VAT from private school fees. After all, as you say, any damage will already have been done and those remaining in the private sector will be contributing usefully to the tax coffers.

Maybe it will make the private sector more genuinely competitive and innovative - a cheaper private school model would no doubt prove popular (I’ve seen threads on Mumsnet over the years arguing school fees have become ridiculous and unjustifiable, pricing many right out of the market, and this was years pre-VAT), and it’s obvious there are huge profits that could be made from “education services.” So, you could argue that Labour has actually given capitalism more of a foothold in education, and I know that few people on this thread would want to be seen as anti-capitalist, which is ironic 🤣.

Linked to the above, it will be interesting to see what the Government plans to do about the growing numbers of children being “home educated.” If growing numbers of children are being “educated” outside the “education system,” will that now get more oversight and how will that be funded and co-ordinated? It’s not as if they are giving much more money to Local Authorities compared to their already onerous responsibilities.

I think many in the electorate did buy what was being said but hopefully a few have realised since.

ha at the last line, if it wasn’t so depressingly true.

It will likely be removed as it won’t bring in much anyway. And if Labour are out the other parties have said it’ll go.

The problem Labour will face is that there is a tipping point when so many private schools go bust, parents become too scared to choose private schooling in the first place as it becomes too uncertain, not just whether the school will survive, but what next move Labour may make to harm the sector further. At that point, parents stop signing up. I wonder how many private school parents are now worried about the financial viability of their schools. Because the business model relies on bums on seats and has little reserves other than a very very select few, it’s actually all quite risky. They can’t sack people quickly nor can they sell off lands quickly either so in insolvency terms I don’t think it’s looking good and 100 per cent Labour is to blame with their policies.

I wonder how many banks would still provide emergency funding at good rates to private schools in this climate with this amount of political risk and uncertainty. These used to be very secure cash flows. When you start looking at it that way you will maybe understand what Labour have done here with their policies. Obviously the big name private schools with a secure well known reputation and huge grounds are ok but others clearly not so much. Otherwise those last two schools who went bust with good grounds would have secured some funding if they had been able to convince banks this is just a temporary blip due to political interference.

Yep I am really worried about our school's finances. It was oversubscribed in all year groups until this year but its the huge numbers not joining that is going to be the problem. It's a great school, excellent education, lots of great extra curricular, very down to earth but no big reserves or land to sell etc. Just a really great school. Not wealthy though and I don't think it will survive. Trying to work out what to do for the best.

@newbutoldfather I posted in response to you before about the types of schools opening and closing in past years. The sort of school in Chelsea you referenced is exactly the sort of school that comes and goes. The sorts of schools that are closing now are very different and much worse for the communities involved as they are often a large employer. I don't understand how you can dismiss this so casually.

But sadly that’s the whole point - Labour would be more than happy for independent schools to cease to exist entirely. So they don’t see this as a problem at all.

It’s a feature not a bug!

@ICouldBeVioletSky - I think it is unacceptable to introduce policies which directly lead the children in exam years becoming insolvent. Years 10-13 should not be allowed to fail and there really should be help available from the Government itself.
These last two schools included such children, I think.
I think it’s awful for all children especially those with SEND, but now we are seeing kids caught up in exam years and with just a few weeks notice, I don’t think they should be able to just ignore this.

Absolutely agree Araminta
Fairly sure that back in these threads somewhere, someone posted research evidence showing that forcing children to change schools (other than at natural transition points applicable universally) has a detrimental effect on their academic performance.

Which makes perfect sense. Think about when companies employ adults they have a probation period and there’s that sense that they need to learn the ropes and the systems, and get their feet under the desk and people don’t expect them to be fully competent for 3-6 months or longer depending on the type of job.

Yet if you’re a kid in a new school, maybe a new exam board, new teachers, all the social pressures of changing schools- you have the same amount of time to the exam dates as anyone else. No concessions at all. It will affect performance and honestly with the pig headedness and mendacity of this government on this issue I really hope those kids who are threatened with moving or have to move around exam years can find legal grounds to JR the government.

Absolutely agree. I have seen comments from a parent at one of the schools that her child is in year 10 and they are desperately worried about finding a new school. Phillipson would no doubt continue smirking as she’s got one over on the “posh” kids that upset her so much at Oxford…except that those of us with an ounce of common sense know that she hasn’t. She’s made the private schools that she has a problem with far more elitist and the destroyed the small private schools who send little or no kids to Oxford.

Labour thought being vindictive was a good way to go. Hopefully they’ll find out it wasn’t.

I don’t see the benefit in claiming Labour is being “vindictive,” or that it’s all about Phillipson “smirking.” Whether or not you agree with VAT on school fees, imvho, this Government has so far indulged in less openly expressed vindictiveness than the previous Government, which appeared to specialise in demonising the groups it was picking on. I really don’t want this Government to be encouraged to stoop to the lows of the Tories in a populist bid to compete with Reform, because I’m fed up with the constant unpleasantness. Whether it will raise money or not, it is simply a fact that every British citizen living in the UK is entitled to a state education, so taxing more people out of the private sector isn’t deliberately treating them worse than those who already can’t afford it, nor is it demonising those who can no longer afford school fees and are upset about that.

I seriously doubt Phillipson is currently smirking about anything. VAT on school fees is either going to be successful at raising money for Government spending, or it isn’t. It will either cause harm to the economy as a whole, or it won’t, and it should now be judged solely on that basis, because the courts have confirmed the Government was allowed to do this.

Well said @Walkaround

Nah - the smirking and vindictiveness is very real. This all comes down to people who were politically involved at Oxford, who based their political personas around being state-educated. They had a grudge against students from private schools, who they saw as less deserving of being there. This policy is their revenge, nothing more, and it’s a bonus that it gives the easiest applause line at Labour conference. They have never grown out of student politics, probably because they’ve not had non-political careers in which to meet non-Labour Party members

The courts have decided that education VAT does harm the childrens' human rights, but that the government are allowed to do that.

Firstly, because there aren't very many children harmed: and the ruling several times said the proportionality was judged according to the numbers - ie ignoring the severity of benefit/consequence. So unwanted cornflakes for all trumps a destroyed education for a few. This is mistaken logic.

Secondly because the government are free to attack whoever they like so long as they're using taxes to do it. No real logic to that one. It's realpolitik which makes human rights legislation pointless

And thirdly (not spelled out like the others, but implicit) because the judiciary assume that the government are acting in good faith. That if the policy doesn’t make money, it's just a mistake. And when the government weighed up who would lose out / who would benefit, they were impartial rather than vindictive and tribal. This is just not the case.

I no longer support ECHR. It brings social and economic cost, but no real protection. It is not fit for purpose, and causes more harm than good.