The Edinburgh Question: Labour's tax on private schools

[Eastcoastie]

A group has popped up on FB aimed at parents in Edinburgh who are against Labour's policy of charging VAT on private school fees if they get elected in July. 25-30% of children in Edinburgh are privately educated so the policy is very likely to require big changes to education providers in Edinburgh and some areas of the Lothians.

George Watson's has announced a 9% fee increase for the coming year and according to members of the group, if the VAT policy goes through, they have been told that this will have to be passed on too, so next years fees would likely see a 20% rise plus inflation. Staff at the school are already on a pay freeze and the accounts show an operating loss.

Members of the group have also said that GWC are planning for a loss of 350 students if the policy is enacted.

Heriots parents have been told of a 6% fee increase for the coming year and the school are also likely to pass on the VAT bill next year if enacted too. Parents are being told, if they are unhappy, to leave.

Prior to the policy being announced, Edinburgh's projections for school capacity flagged 9/23 secondary schools as being at or exceeding capacity in 2023, rising to 18/23 in 2027.

How will Edinburgh/Lothians manage even minimal fall out from the private sector?

https://www.edinburgh.gov.uk/downloads/file/22448/secondary-school-roll-projections

EIS are against VAT on schools - if it’s all middle class Tarquins whining, I wonder why?

@Off99sitz is it because of setting a precedent for charging VAT on education? Potentially having wider ramifications if challenged in court for other forms of education eg. universities?

Can only think so - we’ve abandoned the idea that education is funded from progressive income taxation, where will it stop?

What makes you think none of those children live in Edinburgh?

Parents send their children to board for lots of reasons. There is no wrap around care for senior school. If you have jobs which involve frequent long days and travel, boarding which has structure and supervised study becomes an option for £12k ish. Employing someone to do sporadic overnights, weekends and wrap around would be difficult and probably cost more.

I agree Cargilfield pupils (not just boarders) are probably irrelevant, they are aiming for English exam boards and often boarding for seniors.

Fettes pupils (day or boarding) might move to another private school to reduce costs.

I presumed the 25% is calculated on the difference between children living in Edinburgh and actually attending state schools. The vast majority of day pupils at Edinburgh private schools do live in Edinburgh often in catchment for the schools that are highlighted in red in that spreadsheet.

A lack of available wrap around care in local primaries is one reason that people who were looking forward to not paying nursery fees end up paying for private schools.

The parents who are paying out of their regular income to send kids to EA, Watsons, Merchiston, St George’s, Heriots and ESMS won’t all be able to cover the regular fee increase plus whatever the VAT ends up costing. Last years fee increase was huge compared to typical increases, 9% this year is also atypically high.

If enough parents pull their kids out, or don’t send them in the first place private schools will close, so where do all the remaining kids go then? Would all the families who can still afford fees find in year places in another private school? EA, Watson’s, Heriots and ESMS do Scottish exams. If your child is in S3 or up you can’t just switch them to a different examination system.

How many kids at edinburgh private schools have additional support needs? How’s that going to be accommodated/funded?

Scotland catchment system means you pay what it costs to live in areas that have “good” schools or you pay school fees. You only have to look at house prices to see the impact of a catchment area. Anything that increases the number of kids using state schools is going to disproportionately impact Edinburgh. Christ knows how ScotGov will deal with it but it’s not only going to impact the families who currently send their kids private, it’s going to impact Edinburgh state schools and all the families whose children attend them.

I think the Labour VAT proposal for private schools will be really terrible!

It will hurt the many hard-working families who have made sacrifices to send their kids to private schools. On the other hand, the very wealthy can absorb the proposed VAT increases.

This policy will only create a bigger divide as some families withdraw their kids from private schools or think twice about sending them.

In turn, these families will move into areas where the best state schools are, further increasing property prices and furthering a two-tiered state school system.

'hard working families' - like people on lower / minimum incomes are not hard working 🙄
Imagine the mental gymnastics needed to conclude that less people in private school leads to more of a divide in education 🤦🏻‍♀️
The few pupils who can no longer afford to go private will go into the state system making it much more balanced than it currently is, benefitting the existing state school pupils. Currently 25% of the highest achieving / best supported/ most ambitious / richest are missing from state schools in Edinburgh, very unlike most other places to the detriment of existing pupils and teachers. And sorry but this threat that an influx of people to the areas with the best state schools will put up house prices is quite frankly laughably out of touch - very few normal working families can live in these areas as it is as the prices are already so inflated.

@burghlass Starmer has come out this week to confirm what he thinks a 'working family' is given he's pledged not to tax them any more. Apparently he defines a working family as one where they rely on public services to get by. So, sorry, if you're a higher earner and opt to pay for things privately (and reduce state burden), you're not a 'hard working family' apparently. And you're just there to be taxed to support everyone else.

How does having more middle class pupils in state schools help? I don’t get this point. I find it pretty patronising to state school parents and pupils. Do they need some posho kids to show them how to revise? Or some rich parents to show the pta how to money raise?

I find this pretty insulting too. My partner and I have worked hard all of our lives hence we can afford private school. Others have worked equally hard and are less fortunate. We all pay taxes and all want better lives for all in the UK, so he can stuff his divisive definitions.

If you want to put VAT on private school fees feel free, but don’t make excuses like private school parents are not hard working families.

As a parent of state school pupils and a teacher in a state school I can tell you it’s not at all patronising, it’s just fact. Obviously any class with more pupils who want to go on to uni, view school positively, have academic / professional role models and have very little poverty related problems at home to distract them (and therefore the rest of the class) will do better overall. Any teacher will tell you this it’s not hard to understand. If it weren’t the case why would people pay more to live in certain catchment areas? It’s the same teachers and curriculum as anywhere else? You are either very naive or being deliberately obtuse. And yes we all pay taxes and want better lives, but you are suggesting the very privileged (or fortunate as you say) 6% of UK families who can afford to pay for a private education should be EXEMPT from paying tax on it?! Don’t be surprised if you don’t get much sympathy on that one.

@Mswest for something to be EXEMPT from something, that thing has to exist in the first place. We don't currently tax education. Nowhere in the EU does. Many countries give a tax break to parents who remove their kids from the state sector as they recognise that that frees up resources. This isn't a tax break. It isn't a VAT exemption. It isn't a tax loophole. It is the introduction of tax on education in the UK.

Nothing to do with introducing tax on education that is a really poor argument. You are paying for a service - a luxury service given the % who can afford it - and that most definitely should be taxed. In England private schools also get an 80% reduction of business rates - why? I think the majority of the public will support this move, in fact I think many will be shocked that private schools have been VAT exempt until now. If it's too expensive people could always move to a cheaper area and use the property equity to meet the difference?

@Mswest but it literally is a tax on education. That is a fact. I'm not sure that the parents who have had no choice but to educate privately due to their child's SEN or bullying at their local state school would call it a 'luxury' to be honest. It's a poor reflection of our society that people don't view education (of any kind) as an overall benefit that should be exempt from tax. Morally it's wrong to tax education.

‘No choice’ to educate privately due to SEN or bullying? My goodness do you hear yourself. Believe it or not children from lower income families do actually have these issues too. It is very much a luxury, how detached can you be?? I’d argue a two tier education system is a lot more ‘morally wrong’ than taxing the richest for getting special treatment.

@Mswest There is a two tier state sector already. Many poor families are priced out of areas with the best state schools.

Everyone who pays tax contributes to the state education system. When a parent removes a child from the state sector to go private, they still pay tax so the state sector has a bit more money to play with. Why would you tax someone twice?

I would vote Labour but totally disagree with this policy. The finances just do not add up so it is in my opinion a totally ridiculous anti private school initiative that will end up causing havoc and costing a fortune rather than the opposite. And loads of kids will have to move schools and already under staffed and under pressure state schools will be further stressed by having to take on more pupils. Madness!

@Mswest I'm very much not detached. Trust me. But your argument is leaning towards the 'if one portion of society can't afford this, you should be punished because you can'. Politics of envy.

Again, a very poor counter-argument that doesn't address what I said. I suppose the public will decide in July when they choose who to vote for. 🤷

Why are Scottish students EXEMPT from paying tuition fees for university? It is a privilege to go - they shouldn’t be VAT exempt either! Neither should nursery fees. While we are at it, why are museums also EXEMPT from VAT, plus Edinburgh zoo and Edinburgh Festival? Those exemptions must be stopped too! Edinburgh council must absolutely not be EXEMPT from paying hundreds of thousands of pounds in VAT on the fees they pay for ASN children they have placed at the Royal Blind School, Falkland House, Moore House etc.

And get rid of zero rating on Cakes too! There are simply too many things EXEMPT from tax!

Lots of A grades at higher is not what makes a good school. A good school is one in which all children and staff feel safe attending and where every child achieves their best. They could get 30% of students getting 5 As at Highers and still be a rubbish school if the other 70% are not achieving. As PP stated one of the biggest things that makes a good school is the learning environment.

I remember my geography lessons at my mediocre school (the better one of the two in my town) - the teacher probably had just 25% of the lesson time in which he could actually teach, the rest was crowd control. I don’t doubt that many teachers face the same or worse in schools today. There were three of us who were ‘achievers’ in that class and we were not able to influence class behaviour in any way. We did, however, have our own education detrimentally affected as we tried to do work whilst chaos erupted around us.

A few things:

(1) Education is already subject to VAT in some cases (eg professional training courses). I don't see why education for children should get special treatment when it's a choice to pay for it.

(2) VAT is one of the fairer taxes- the more you spend, the more tax you pay. You don't pay the tax if you don't have it to spend. (It's not entirely fair, because lower earners still pay a larger proportion of their income on VAT than higher earners, but it's a start).
(3) It's a terrible indictment of our education system that people feel like they 'have' to pay for their child's education. But even being able to have that option is a privilege.
(4) I find the comments about middle class children improving state schools pretty appalling. The idea seems to be that they get better results so make the school look better. Why is that the responsibility of children?

Saying children should improve schools is surely the wrong way round? Shouldn't schools be enriching children's lives? And they need the funds to do that

Why is it fairer for wealthy parents of children at private school to pay more tax to support the education of other children, despite saving the state the cost of education already, than wealthy people without children? Or wealthy parents of, say, children at Jordanhill who get their privileged education for free?

@Sloejelly Wealthy people without children at private school would spend the money on other things - things that generally attract VAT

Holidays don’t earn VAT, neither do pensions. They may work less hours and not pay higher rate income tax on the extra earnings. They are likely to pay down a mortgage, again no VAT. Or go to theatre shows (no VAT). Or if they have children in state school pay for tutoring for their children, wrap around care and extra curricular activities (no VAT). And their children cost the state their education unlike private school parents.

If we started again with a VAT system we’d make it much simpler. VAT on utterly everything but at a much lower rate. I think it’s New Zealand that has a VAT rate of 5% on everything and it works well.

Poster above. There is no VAT on museum admissions because you don’t pay to enter most museums. There is no VAT on university tuition fees as you don’t pay university tuition fees.

And the poster above saying that professional tuition courses are taxable, why not other education, well the VAT act specifically exempts U18 mandatory education provided by schools (eg private school fees) and university courses provided by a university. It is deemed university education useful enough to wider society to warrant exemption (should the student have to pay tuition fees), as opposed to your professional training provided by other bodies.

I totally understand the wider benefits on a school and pupil performance when the majority of parents are actively focused on the child's education and welfare and don't have as severe challenges at home.

However it is very much the case that outside the private school system many such families group together by location and you can see this across places like Morningside/Newington or East Renfrew in Glasgow with the schools in these areas outperforming many others in the cities. It creates a two-tiered state school system based on postcodes. If children leave private schools due to the VAT increases then, respectfully, they aren't going to end up in Craigroyston for example. So it won't have the impact you refer to.

Also on your point about paying taxes. You omit the fact that parents at private schools already pay tax contributions to education which they don't then use, essentially subsiding the state system.

Finally, this policy is not really about raising revenues - that is a false positive. Because many parents who will have to pay VAT on school fees will do this by not spending on other goods and services where they already pay VAT. It just moves the VAT revenue stream from one area to another.