Staff Redundancies as a result of VAT on schools

[BarleyMcGrew]

Can anyone tell me if schools are starting to make redundancies as a result of VAT? As in, actually cutting staff?

I know of two schools that have run this process supposedly because of VAT but they actually just ended up hiring everyone back but on less good terms.and conditions. Everyone kept a job, even if it wasn’t on as good pay/hours as before.

The national living wage hike will also be having an impact. Admin staff/carering/cleaning/grounds will likely all be affected by this, and will have a big impact on overall school finances.

This won’t be just affecting schools. Business rate, NIC and living wage hikes have to be funded by organisations and businesses somehow. This will be through price rises (which will reduce demand) or cost cutting (which will often include redundancies).

There are no schools which will gain from the combination of VAT, NIC, living wage and business rate hikes. Even taking account of the ability to reclaim input, even the schools with higher capital expenditure won’t be able to recoup all of those increased costs. By their very nature, schools’ biggest expenditure is staff.

I didn't say they were. I always found it interesting that these types of threads (pre the NI changes) never looked at the balance of what PS gain through the changes though. It's a bit misleading.

What do they gain? That must be why so many are closing, cos they are gaining

You stated “And maybe be a bit more honest about the fact that they also gain as well as lose through the changed tax status.” Schools are being very open about the fact that they can reclaim input VAT and have explained to parents that they can offset this. The fact remains though that there is no gain. It’s like telling people “I’m taking £20 off you. However, you’re “gaining” because I’m going to give you £3 back”. There is no gain.

Cost cutting isn’t just affecting the private sector. The state sector is also struggling (as previous posters have said), because of the government’s disingenuous claims about increased funding.

Obviously not a net gain. But to not even mention the gain in any discussion is disingenuous. You do know about the gains, right?

Schools may be honest about it but these threads never are.

https://schoolsweek.co.uk/is-vat-on-fees-really-to-blame-for-private-school-closures/

Interesting that many private schools were already closing.

We have a local state school going through this at the moment.

They are. Most of these threads also mention the input vs output VAT calculations (mainly because posters often don’t understand the difference, and who is paying what for example).

Some of them were already struggling, yes. But they were just managing. The combination of taxes has tipped them over the edge though. It’s precisely the situation with other businesses. Some pubs for example were closing, but others were struggling along. The tax changes will be the final nail in the coffin for many of these.

Not the ones I bothered reading early on.

Clearly they weren't just managing if many were already closing.

Of course redundancy in any school is sad. My heart went out to all the staff in the state schools around here who lost their jobs due to the terrible Tory funding of schools.

Yes
Asked if anyone was thinking of leaving or wanting to cut hours etc

I’m not sure what point you’re trying to make. I’ve acknowledged cost cutting in the state sector. The OP asked if schools were making redundancies due to VAT. The answer is yes. The impact has been large and most schools are cost cutting.

Of course. As a 20% tax would any sector. People seem ok as it’s education, sadly. Other sectors there’d be more realism over damage.

Increasingly, private schools won’t be in it, so moving to a school with it will
mean moving to state teaching. Which might be what you meant.

Thirty-odd years ago, an employee might have only contemplated moving between employers that had a final salary scheme, but as these got less common, it became less of a “red line”

We've already pulled out of TPS.
No redundancies this year, but constantly being threatened with it which isn't nice. They are changing the working conditions, and not for the better. Staff not being replaced when they leave or retire so the remaining teachers are having to teach other subjects (not their specialism) which isn't good for top private schools when parents are paying a lot of money.
Teachers morale is low and stress is high, which also isn't good for the students learning.

Can anyone tell me if particular departments have been targets for this at their school?

I happen to know 4 schools close to me have made redundancies, or reduced staff hours by 20% or, in the case of music, made them redundant and then they are self employed from now on.

However, I the spirit of fairness, I know the two state schools I work for are also making redundancies.

It's a lot of redundancy in my area after the last budget

We haven't at the moment but we went through it 8 years ago, along with coming out of the TPS. We do someone leaving who is not being replaced though.

I don't know where it was from but a colleague read me an article the other day that claimed 1/3 of private schools are cutting subjects and 1/2 are cutting staff! I have no evidence for that though.

Not in our case. No cutting of subjects as yet. They have even managed to keep low uptake ones like Latin Mandarin and German, for now. Some of the small classes are due to (in our case) the relentless rise of Business Studies. But our breadth of subjects is a big part of our appeal.

I don’t know if it was every department as i only know staff in one of the schools in my area but it was cuts across the sciences!

Will we actually see a benefit to this VAT on fees? So many posters here have said state schools are struggling, when will we see the VAT raised be passed onto the state sector? I thought that was the whole point. But I don’t think that’s going to happen. I know many redundancies that have happened in private schools very recently, all support staff. Independents provide employment to their local area, they need an array of support staff to keep the place running. It would be far better for the economy if they were still able to provide that employment.

How can £0 benefit anyone?
Court case proved Labour had lied. Their own figures (which they never released) showed 54K pupils leaving Indy schools in first 2 years. That's 10% and 10% is the point at which the net income is £0. If you get to 11% then it becomes a cost to state.
33K already left since Sept 24 and 80 schools closed. At this rate we are set to reach 11% by Dec 25 if not earlier. Yet Starmer + Phillipson kept saying they "don't accept many kids will leave"
They lied and more importantly, they don't care. These kids + teachers are collateral damage in their ideological war