Any other Heads publicly worrying about VAT?

[JustanotherBerkshiremum]

DCs at an independent school. The Head is obsessed by the proposed VAT implementation. Since October he has raised this issue in all public correspondence, ie newsletters, the school magazine and the end of term letter.

Are any other Heads out there publicly worrying about the future to their parents or is it just ours? You don’t need to name the school.

I get that it’s an issue but the school can finally claim back VAT. And if they get decent tax advice then they can cushion it a bit more. And it will only happen after the next election if (because nothing set in stone) Labour get in which is two years away.

I’d rather the Head kept his thoughts to himself at the moment. Am I being too harsh?

20% in fees is going to affect a lot of pupils in the school. I can see why he’d be worried.

Labour will really to mess up not to win. The Conservative Party are dead men walking

But you as the fee payer will be paying 20% extra - which will be too much for some parents who will go to the state sector.

I dont know about publicly which seems a bit risky, but the independent sector is worried about a combination of the economic downturn, falling birthrate, inflation, wage growth and the potential for VAT on fees.

I can only imagine your head is trying to encourage people to either plan ahead or make a noise politically.

I teach in the independent sector and yes, our Head and SLT are worried about this and communicating that worry to us. I don’t think they are mentioning it to parents though. It worries me as a parent too. We just can’t afford an extra 20% on fees on top of interest rate hikes, bills etc.

No, I would be doing the same if I were him.

I get that it’s an issue but the school can finally claim back VAT. And if they get decent tax advice then they can cushion it a bit more

Do you think they can keep fees at the same level, despite the 20% increase?

I thought the VAT issue was on school fees? My youngest is in her final year, but I had two in private and I wouldn't have been able to afford that, snd due to lack of ANY decent secondaries where I lived (not on the mainland) would have forced us to move. And then that's two more kids in the already overburdened/underfunded state school sector. Multiply that by 1000s. Shit those smaller schools who couldn't keep going with many fewer students and you'll have all those teachers/support workers looking for work (and having to move) to. Local traders who supplied the schools?
Anyway, our head may well be worried, though her particular population is by and large on the wealthier scale and could most likely absorb the additional costs, but she has not conveyed this worry publicly.

I’m fully aware that the VAT will be added to the school fees and it will be interesting to see what the annual incremental fee rise will be.

Some interesting viewpoints, thank you for your replies.

Sounds like the Head is (not so) subtly suggesting parents don't vote Labour?

We just got a bit of info about how VAT is nothing to do with the charitable status of schools and is because under EU law it is illegal to charge VAT on any tuition fees.

Another benefit of Brexit

Are any other Heads out there publicly worrying about the future to their parents or is it just ours? You don’t need to name the school.

London girls independent set up as a charity - no, it has not been mentioned in any communication or face to face meetings so far.

For another, much larger London girls, I have seen this specifically mentioned in their annual report available in charity commission website under 'Risks'. (two years ago). The report anticipated affordability problem for a significant number of parents if Labour proposal becomes government policy (this was still when Jeremy Corbyn was leader)

Our prep school is already in debt. They have no capacity to help parents that may struggle with a 20% rise. The addition of VAT will be the end of the prep school for sure. 200+ kids will need to go elsewhere in a couple of years time.

When is the election likely anyway? I looked and the latest would be January 2025. Knowing how badly the conversatives are doing, I imagine they'd wait until the very last minute.

For me, the difficulty is that I agree with everything Keir Starmer says - well except self ID and school fees. But everything else, he's right. I'm fed up with the conversatives. I'll probably vote Labour even knowing what will happen to private schools and possibly my children going to state school. It's going to happen anyway, nothing can reverse the fortunes of the sordid Tory party. I can't stand them.

I doubt very much if it will happen as starkly as it has been reported - there are far more pressing concerns for the Labour Party than adding VAT to school fees.

It sends out a very poor message to middle class parents who are the most likely to vote (and who pay the most tax already) - there may be a symbolic attempt to impose it on the expensive public schools (£40,000+ ish fees) but not your average local independent school.

Being old I remember the time before the 1992 General Election when as a sixth former I was attending an indepedent school (top 50 day school in English city, not the 'premier league' Winchester, Charterhouse, Cheltenham or Eton etc). Labour policy in 1992 was similar - take away charitable status (and thus have VAT on fees) + remove assisted places.

Being interested in politics and one of only six or seven Labour supporters in our year I remember speaking to the deputy head about it in our politics general studies group. He said that if introduced they had been assured that there would be concessions available for schools. They just had to show that they were using their charitable status for the benefit of the whole community. He said that the school could show the community benefits: it let out the sports facilities to local sports clubs in the evenings and weekends, participated in local arts festivals using the schools theatre and meeting hall facilities and worked with other local schools to promote eductaion and learning across the whole city.

These kind of things are what a good locally based school should be doing anyway. So schools should probably start promoting their local links/ make facilities available to others etc so that they can prove the benefit to everyone.

I believe it will eventually happen but it won’t be Starmer’s top priority
not least because there is unlikely to be space in the state system for the extra kids

my guess is he’ll say they have to do it by a certain year in the future, but that law could potentially be repealed, or delayed, by a future government.

Our prep head is fretting about it
Senior school seems less worried

Our prep school has said nothing about it which I find a little odd. I’d like to feel that they have a plan for what to donifnit haooens ie will fres suddenly jump by 20% or does the school have funds to cushion the blow / fundraising plans / areas of expenditure it could cut so that fees don’t go up quite as much.

@StillWantingADog he sounds pretty serious about it to me see today’s article linked below - Labour are playing a very quiet game at the moment and letting the Tories bury themselves, but Starmer clearly has taken advice that this is worth pursuing pre election. With 7% of families using private education I guess he knows it is electorally attractive to a vast swathe?

amp.theguardian.com/education/2023/jan/11/labour-look-to-force-vote-on-ending-private-schools-tax-breaks

@StillWantingADog i think there was a thread on here about how there will be plenty of state school spaces due to falling birth rate which are the children coming through school now. Labour will be taking advice on that too, they aren’t daft!

Yes, I think that spaces might be being freed up due to birth rate. Councils are already planning on closing some primary school classes due to predicted over capacity.. Keeping them open is presumably a cost whereas at the moment they dont have to fund education for some of the children in their area. There would not be the same short term capacity at secondary level.

I'm interested to know what impact it would have in London with so many Zone 1 and 2 children going to independent schools further out. For example a lot of children in Wandsworth/Lambeth go to schools further out. That's a lot of secondary school places to create over night.

Nothing from ours. Only a year and a half left for us thank god.

I am a teacher at an independent school and it was mentioned as a risk at a recent all staff update from the bursar.

For us it will add approx £1500 ish to the cost of our fees for parents which was felt to be significant for the junior school parents but not so much for senior school.

The senior school is the main business and is considered the best in the area so I guess there will still be the demand if fees increase.

The worst impact envisaged would be the closure of the junior school as it wont be worth it if there is significant decrease in pupils. To be honest I dont think that would be such a bad thing - the best and brightest pupils in year 7 are those that come from the local state primary schools; it is a perception among staff that junior school pupils are thick but rich! Having a brief look tracking the pupils in my year groups it is always noticeable that the bottom half of the classes for years 7, 8 and often 9 is made up of the junior school pupils: in several cases it is questionable whether they would have passed the entrance exam sat by external applicants.

How would the state school schools absorb extra pupils from the independent sector? At the moment they are already oversubscribed. Children are having to manage with cutback to the state education system. Surely they won’t want extra children added to that.

@DobbyTheHouseElk There is a thread about this. Research shows that due to the falling birth rate (the current Yr 9's were the start of the drop, linked to glocal recession in 2008) there will be places in the state sector to absorb those who are outpriced. Some parents will find the extra cash for increased fees. Labour have stated that they will use the money earnt from the tax on 6,500 teachers. State schools will receive more funding.
What is not to like for the country as a whole?
I think the heads I know of Indies are worried about pensions at the moment and the VAT is a secondary down the line concern.
A journalist I know said that business leaders are starting to turn up at Labour talks/functions. The writing is on the wall if they are doing that, they know what is coming down the line. A tory victory seems highly improbable if business leaders are sniffing the wind changing.

Being realistic this is probably a second term Labour Government measure: if (and I sincerely hope so) a Labour Government is elected in spring/autumn 2024 (latest election can be held is Jan 2025) they will have lots of other problems to deal with immediately - economy, NHS, relations with Europe etc etc.

Even if it is in the manifesto the legislation wont necessarily be tabled. Is it really a priority of the new Government given how much opposition it will stir up? Is a tax on 'hard working parents' really more politically acceptable than a tax on energy companies, property speculators etc?

If they do go ahead the earliest this can be tabled is probably 2025. Depending on the size of the Labour majority it will face opposition in the Commons and especially in the Lords with scope for various amendments to be added/ debated/ voted on so the initial meaure is likely to watered down or its scope limited. It may end up just as a symbolic tax on the high end schools - those with fees in the £30,000+ range rather than the local independent schools.

Then once passed there is the actual implementation of the legislation which may be a year or more later. By that stage another General Election will be on the horizon so its likely to be further delayed. These delays will enable central government and local authorities to carry out assessments and plan for any extra state school places required.