Whitehall “braced for private schools collapse” 8

[ICouldBeVioletSky]

Continuation of previous threads discussing the impact of VAT on independent school fees. The thread title is a headline from a Times article last autumn.

This was reported in The Times yesterday - clearly more at play than VAT in relation to these schools (apologies if the gift link stops working at some point):

Parents to sue over closure of Chinese-owned private schools

www.thetimes.com/article/59776b58-0d17-456d-9414-d45cc922468d?shareToken=45015a759b93e5694c6fc38fe5fa3d3f

Place marking.

I think that if you want to look at the effect, it is far better looking at the percentage of pupils privately educated, as opposed to schools closing or entry numbers without adjusting for demographic decline.

And, according to government statistics , the number of privately educated pupils is fairly steady at 6.3%. I know there will be a lag and it would be hard to believe that a 20% fee rise would have no effect on demand, but OTOH, the annual way-above-inflation annual fee increases also haven’t significantly affected demand.

What VAT has done, though, is that it has accelerated the consolidation in the sector. Schools financially don’t make much economic sense below 300, and ideally 500, pupils. So you will see a lot of small schools closing and existing schools expanding.

I do think the onus is on labour, though, to show any money raised is invested in education. It would also force them to be honest about how much money is being raised (if any).

This can still be VAT related. Chinese investors seem to be more ruthless over it.

@EasternStandard ,

It’s not VAT related. It is plain old fashioned planning permission arbitrage. It is legal (in theory at least) but very morally dubious.

You buy up a school/hospital/nursing home, get to ‘know’ the local planning permission authorities (which sometimes involves lavish entertainment or a suitcase of cash), and get planning permission to create a luxury hotel/residential units etc.

The value of the assets, especially if repurposed, are worth 10x the value of the school. 20% is an irrelevant percentage of 1,000%.

I am glad the parents are suing and hope that they win.

Chinese investors are pretty good at making money until domestic tax laws make it not worth their while.

They can be ruthless on that but they’ll take their money somewhere else and build a global power house without doing much more than buying and selling.

Which of course we’re happy to concede to when we’re selling. They’re just very good at global investment. Either say no thanks when they offer or be prepared for them to call the shots.

As for suing yes go for it if they’ve done it outside what is allowed. But they’ll still invest everywhere. We are so inconsistent over whether they can.

"I think that if you want to look at the effect, it is far better looking at the percentage of pupils privately educated, as opposed to schools closing or entry numbers without adjusting for demographic decline.
And, according to government statistics , the number of privately educated pupils is fairly steady at 6.3%."

That seems a fair point, in your first para, but is it overly simplistic? It won't capture eg, any pupils who are now educated abroad (either 'foreign' families who no longer send kids to board here, or UK families who decide to move abroad due to overall tax burden). Though I accept these will be a very small proportion of the 6.3%.

I believe more SEN independent schools have opened so the move of state pupils to those will mask some movement going the other way from mainstream indy to state. But again, it may not be a statistically significant amount.

More interesting are these government statistics, for the 25/26 academic year, released last month:

"The number of pupils in schools in England has decreased
There has been a decrease of 112,200 (1.2%) pupils across all school types from the previous year, with a total of over 8.9 million pupils. This includes all state-funded and independent schools."

contrasted with

"The number of pupils in independent schools has decreased by 3.8% to 560,300, declining for the second consecutive year."

So state schools have seen a reduction of just over 1% (stat of 1.2 above is for state+indy) while indies have seen a 3.8% reduction - well over three times that in state.

I'll admit that I'm not a statistician, and that I also struggle to reconcile this with the 6.3% 'holding steady' figure, though from a quick and unchecked google search it seems that this has fallen over the last two years from 6.5%.

Release home - Schools, pupils and their characteristics - Explore education statistics - GOV.UK

All in all this can only be a good thing. It forces people to care about our state education system as opposed to buying their way out.

That’s a nonsense argument which shows that you have little understanding of parents who use independent schools. Many children who attend independent schools have previously attended state schools themselves or have siblings who attend state schools. I have one DC in independent school and another DC in state school. That is not unusual.

As a parent I am completely aware of the situation in many state schools. There’s nothing that I or any other parent can do to improve that.

Many parents move their DC from state to independent when their DC’s SEN are not being supported in state schools. Huge numbers of those parents do whatever they can to get their kids supported by the state sector but their pleas are dismissed.

It’s also not the elite schools that are being impacted so if parents do have any influence or power, they are not the ones who are taking their kids out of the independent sector.

@ICouldBeVioletSky ,

‘More interesting are these government statistics, for the 25/26 academic year, released last month:
"The number of pupils in schools in England has decreased
There has been a decrease of 112,200 (1.2%) pupils across all school types from the previous year, with a total of over 8.9 million pupils. This includes all state-funded and independent schools."
contrasted with
"The number of pupils in independent schools has decreased by 3.8% to 560,300, declining for the second consecutive year."
So state schools have seen a reduction of just over 1% (stat of 1.2 above is for state+indy) while indies have seen a 3.8% reduction - well over three times that in state.
I'll admit that I'm not a statistician, and that I also struggle to reconcile this with the 6.3% 'holding steady' figure, though from a quick and unchecked google search it seems that this has fallen over the last two years from 6.5%.’

Those are interesting numbers, thank you.

i guess, mathematically, 2.6% of 6.5% is around 0.18% of the total population, so that is consistent with the total percentage of private pupils dropping from 6.5% to 6.3%.

i guess it also shows about 1/40 private school pupils leaving (or not enrolling) due to VAT, which is significant, but not enormous (roughly one pupil per two forms).

The reduction of the number of pupils in the independent sector is much higher from the state. These figures were extrapolated from the most recent Government stats for the period since Jan 24:

1.89% for state
7.62% for independent

How does me caring about the state education system improve my son’s school? How does it stop him from having a revolving door of maths teachers? How does it force the school to offer triple award science at gcse for bright pupils? How does it remove all the disruptive arseholes from his class? How does it prevent him from having a substitute teacher for every other chemistry lesson? How is it going to change the one size fits all mentality of state education? How is it going to improve the sports offering at his school?

State schools are run on a shoe string. Adding VAT to private education isn’t going to change that. Me being passionate about my child’s education also isn’t going to change that.

Strangely, state schools with a predominantly wealthy parent demographic don’t appear to have a problem offering things like triple science. On the plus side, they also don’t tend to close down in the middle of exam season, taking people’s school fees with them. It seems the private schools’ shoestrings are even dodgier than state schools’ ones.

Well sadly, DS’s state school with a very wealthy demographic couldn’t care less what parents think. It is state funded, our PTA money can’t buy science teachers for them unfortunately.

I suspect you mean it can’t recruit the teachers it needs to provide triple science lessons. No, of course PTA fundraising can’t directly pay for teachers. Large endowments, however, can cover the costs of extra sports and sport facilities, drama facilities, specialist music teachers and other non-core perks. It tends, traditionally, to be former private schools and grammar schools which have funds and investments big enough to cover those sorts of perks, however. It is really not one size fits all out there - the English school system has plenty of ways to maintain inequality of provision, inside and outside the state sector.