VAT and removal of 50% cap on scholarships

[lovepenguin]

I'm not in favour of Labour's policy on adding VAT to private schools. However I do wonder whether the private schools no longer have to adhere to the 50% cap on scholarships from the charity commission, if they lose the charity status. Will scholarships be more generous?

I don’t know what the 50% cap you’re referring to is. However, the Labour Party have already said that they’re not removing charitable status from schools. Charitable status and VAT are entirely separate.

I would doubt it - scholarships are paid for by other parents, who are now being squeezed out by VAT - I would assume the opposite - less scholarships to lower the fee burden. A very sad outcome of the policy.

There’s a difference between scholarships and bursaries. Scholarships are awarded based on merit and often have very little, if any, financial benefit. Bursaries are means tested. Some schools have already said that they’ll stop bursaries going forwards if VAT on fees is brought in.

Scholarships are used to attract the most desirable applicants, regardless of wealth. Currently these have been low payments, however if bursaries are reducing. Schools may the opportunity to be more generous with scholarships.

Ah sorry, yes I see what you’re saying now! I too have wondered if they’ll decrease bursaries and move more money into scholarships to help fee paying parents. A few schools have been doing the opposite over the last few years (channeling funds away from scholarships and into bursaries). I wonder if that trend will start to reverse.

I don't know if I understand correctly, and tbh there's so little detail about how this would work I doubt it'll happen, but Labour wouldn't remove charity status. Therefore the schools who still have this, would, using my common sense here, keep whatever benefits that brings, aka VAT exemption.
If my understanding is correct, it would be the for profit schools that are effected, which is only fair as they are quite ruthless businesses.

I think a lot of bursaries are provided by old students who want to help people who not well off financially.

You’re correct. Some of them are. I think it varies between schools.

I was talking to my father in law, who is a retired head teacher, and he said that years ago children could have a direct grant, subject to suitability, which meant that the tuition fees were covered by the state and the child could attend a private (or a public) school as a day pupil if they earned a place there. I know this would only benefit academically able children and not do anything for the less able children whose parents didn't want them mixing with the scum from the local estate at the local comp (ie me several year's ago). This is a far more complex question than it first appears, on the one hand, it seems anomalous that a fee paying school is classed as a charity but on the other hand, parents are removing their children from the overcrowded state sector while still paying into the state coffers for (other people's children's) education. I get annoyed by the fact that private education fosters the rampant snobbery that besets this country. Being privately educated does not make you superior in itself. Parents worry about drrrrugggs, bullying and loose morals in state schools but all these things go on even in the top public schools. King Charles was bullied at Gordonstoun and Prince Harry did drugs at Eton. I think that if more state funded children were given places at private schools it would help everybody and go some way towards ending the awful, inequality and elitism.

Another problem is that many cash strapped private schools are opting out of the national teachers' pension scheme so this means that the quality of teaching could go down as the more able teachers will be tempted to go into the state system to ensure an adequate pension when they retire.

"the quality of teaching could go down as the more able teachers will be tempted to go into the state system to ensure an adequate pension when they retire"

Mon dieu! 🙈😂

Less bursaries will create even more of a separation. This has not been thought through at all and all it does is get them votes from those who can't see beyond their envy and blame.

I went to a 'bog standard' comprehensive but a few of my friends were privately educated. Some of them had a really miserable time. Generally speaking I neither envy nor pity privately educated people and I don't understand what they are to blame for. As far as I can see, there are good and bad schools in both sectors. I suppose private education gives a certain kind of individual the illusion that they are envied and they can look down on us lesser mortals.

I doubt they are calling state school people lesser mortals. It appears that the only judging going on are those in state schools/parents who don't afford state schools, judging those that do.

At the independent schools of which I have most knowledge, scholarships are based on academic or other abilities and are less about discounted fees and more about prestige whereas bursaries are given purely based on need, up to 100% in some cases.

I was at a dinner party about five years ago and this women said she was so pleased that she never had to go to a 'council school' and that her husband earned enough so that Tarquin and Jocasta (not their real names) did not have to go to the local compost heap and mix with all the mutants from the estate. I am not suggesting she is typical but people like her do exist. Personally I believe that people have the right to spend their money how they like whether it is cars, holidays school fees or whatever.

That is just one example and thousands of others would never be like that. The only judging appears to come from people with a chip on their shoulder saying those who have more than them look down on them. It is nonsense.

I hope that bursaries will be stopped at our school if VAT is added to the fees.

Bursaries are probably a condition of their charitable status

There would be no point in charitable status if you’re paying VAT, and I should think most independent schools will quietly drop all links and focus solely on serving the needs and aspirations of their students and the parent base.

That will mean any sharing of facilities or any joint educational programs etc will cease. And I should thing most parents will expect, if not demand, that the school concentrate 100% of their time, manpower and management on educating their kids, like what they are paying for.

You can’t have it both ways. Either they are a charity or they are not. If not then their purpose is discrete not connected : To educate their attendants students. Full stop.

Our school has already said that it will stop all bursaries and the extensive offerings that they give the local schools for free ( which costs the school millions a year) if the VAT goes ahead. They will save the money they spend on work with the local community so that they don’t have to pass on all the VAT rise to parents. And so they should! The parents would be up in arms if the school carried on spending their money on others who are so happy to see them being shafted.

I am so pissed off with this policy that I am stopping absolutely everything that I currently do to help the local state schools - my DH and I are both governors of local schools, I volunteer to listen to children read one morning a week, I donate all our grown out of books to the school library and I even tutor some children who are behind in their maths for free once a week (I am an ex teacher). Well no more! I shall now offer all of these services to the private school my children attend so they can save a little bit of money!

I also run my own tutoring business and I don’t claim everything that I could back against Tax as I thought that there were others that needed it more than me. I am now going to claim back every Penny for every little thing I can justify as a taxable expense. I reckon I can bring my earnings down below the tax threshold so I won’t pay any at all - this extra money can pay the 20% and I’ll have some extra. It’s my small FUCK YOU to Labour but it will make me feel better!

That is really sad :( It helps it not be so elitist

I don't blame you. Rest assured the clever people (who don't necessarily benefit directly from independent education) know all of this extra stuff goes on. Unfortunately it's also the British pea-brain population that are allowed to vote. They live with jealousy of the Jones's and will always believe that their lot is the fault of others and not themselves.

This.

@Hatty999 , I agree! It's awful, but if my fees are going up 20% then it better be going to my children.

It unfortunately can't go both ways.

We can't be demonised for paying school fees and then when they say we have to pay an extra 20%, be demonised for saying we don't want to pay for state school children to come to the school for free. Or for the local state schools to use our facilities for free. With the extra money being given to them, they can pay full price for them.

Only 7% of private school kids get any bursary, and just 1.7% get all their fees covered this way.

So it's never been a significant means to level the uneven playing field created by private schooling.

More like a way to justify the tax breaks they get.