Looming Crisis: Private Schools Face Closures Amid VAT Hike

[Bkk Brian]

6 minutes ago, RayC said:

 

Take your own advice and stop making things up. Nowhere did I 'blame the messenger'. I pointed out that the Telegraph headline and article - or, at least the bit which you quoted - bore little relation to each other.

 

 

I'm not making things up. How else to intrepret your post other than the state system is unable to step into the breech if a 'special needs' private school goes bust?

 

Your post: "For one, there are special private schools that provide the needs for children that are not available in the state sector."

 

 

Unfortunately, some people will lose out. It's almost inevitable whenever there is a policy change. If I was a parent whose child was affected I would no doubt be furious, however, as the article which you posted points out, "The government said the VAT rise is needed to improve education for the 93% of pupils outside the private system. ....students with an Education, Health and Care Plan (EHCP), which states their needs cannot be met in the state sector, will have their private school fees paid by the local authority and will be able to reclaim the VAT fee.

However, not all Send pupils have EHCP's, which has resulted in some parents paying the fees with their own money to ensure their children's needs are being met"

 

Whether education will be improved for the 93% as a result of this VAT increase remains to be seen.

Also known as blaming the messenger. 

 

I stated facts and backed them up with credible links. Unlike you who already admitted your post was a little tongue in cheek.

[RayC]

31 minutes ago, Nick Carter icp said:

 

   You could charge parents of state school kids to pay for their education ?

   Make schools a business, like private schools 

 

You could but I'm not sure that many of the consequences would be desirable. What if parents chose not to send their children to school? Would schools be free to charge what they wanted? If so, it would create an even more of an unlevel playing field.

[Chomper Higgot]

7 minutes ago, richard_smith237 said:

 

True... many private schools in the UK claim charitable status. Historically, many of these schools were established as charities with the aim of providing education to children who could not afford it. Today, a significant proportion of private schools in the UK still operate as registered charities under the Charities Act which enables them relief from VAT.

 

Adding 20% VAT to private school fees will push many students into already overburdened state schools, exacerbating overcrowding and resource shortages without guaranteeing proportional reinvestment in public education.  

 

Whether a charity or not is somewhat beside the point and moot - Private schools ultimately benefit the state schooling system - taxing them, impacts this and ultimately also impacts state schools.

 

 

The claim that private schools ultimately benefit state schools needs something to back it up.

 

[RayC]

5 minutes ago, Bkk Brian said:

Also known as blaming the messenger. 

 

I stated facts and backed them up with credible links. Unlike you who already admitted your post was a little tongue in cheek.

 

You stated an opinion and provided links to support your opinion.

 

My original comment was tongue-in-cheek in so far as I implied that it would be simple for the public sector to take over one 'failed' 'special needs' private school.

 

However, my comment about the equitable principle involved in removing the 20% VAT exemption on private school fees wasn't tongue in cheek. 

 

Moreover, there is an economic justification for its' removal. Whether the sums add up remains to be seen.

 

https://www.theguardian.com/education/article/2024/jun/15/number-of-private-school-pupils-rises-despite-claims-families-priced-out-by-labours-vat-plan

[JonnyF]

Sixth form revenge politics from 2 tier Keir and Rachel from accounts.

 

Economically illiterate clowns. 

[richard_smith237]

6 minutes ago, Chomper Higgot said:

The arrival in state schools of children from families motivated to get their children the best education will undoubtedly provide a driving force for improvement of all children in the schools they bless with their presence.

 

This highlights the simplistic outlook - very short sighted... In the first couple of years your comments might prove correct. But, all that stops when those who would otherwise be in the Private school sector never enter it in the first place - the extra numbers, larger class sizes only serve to burden the state system as those who truly need greater attention and focus lose out.

 

6 minutes ago, Chomper Higgot said:

It’s why schools in catchment areas that include high numbers of parents with higher education do so well, to the extent of impacting house prices within their catchment area.

 

Again, short sighted, those parents with higher standard of education very likely received it in a Private School or Grammar school system, or from a school in a very good area.

 

But, lets say for a moment that you are correct - the ensuing increase in house prices of areas with a good school will force poorer families out of the catchment area, thus forcing poorer families into areas with less educational advantage.

 

6 minutes ago, Chomper Higgot said:

And then’s the added bonus of all those ‘excellent teachers’ leaving the private sector and seeking  jobs in the state schools that are in receipt of their share of the £2.3 Billion increase in spending on schools.

 

Again, short sighted, for the short term, perhaps those excellent high-achieving teachers would accept lower salaries at state schools. In the longer term, those higher achievers would move to industry and elsewhere.

 

You've also assumed the £2.3 billion in additional VAT revenue will be spent on education... If its one thing we've already learned from this government, its how readily they lie, and how quickly they will sell out the needy.

 

 

 

Every example you have provided shows a short sightedness and myopathy that fails to grasp the realities of what actually happens.

 

 

[Bkk Brian]

Just now, RayC said:

 

You stated an opinion and provided links to support your opinion.

 

My original comment was tongue-in-cheek in so far as I implied that it would be simple for the public sector to take over one 'failed' 'special needs' private school.

 

However, my comment about the equitable principle involved in removing the 20% VAT exemption on private school fees wasn't tongue in cheek. 

 

Moreover, there is an economic justification for its' removal. Whether the sums add up remains to be seen.

 

https://www.theguardian.com/education/article/2024/jun/15/number-of-private-school-pupils-rises-despite-claims-families-priced-out-by-labours-vat-plan

Don't try and tell me what I posted, I know what I posted and it was not opinions but factual statements that were then backed up with credible links. 

[Chomper Higgot]

5 minutes ago, richard_smith237 said:

 

This highlights the simplistic outlook - very short sighted... In the first couple of years your comments might prove correct. But, all that stops when those who would otherwise be in the Private school sector never enter it in the first place - the extra numbers, larger class sizes only serve to burden the state system as those who truly need greater attention and focus lose out.

 

 

Again, short sighted, those parents with higher standard of education very likely received it in a Private School or Grammar school system, or from a school in a very good area.

 

But, lets say for a moment that you are correct - the ensuing increase in house prices of areas with a good school will force poorer families out of the catchment area, thus forcing poorer families into areas with less educational advantage.

 

 

Again, short sighted, for the short term, perhaps those excellent high-achieving teachers would accept lower salaries at state schools. In the longer term, those higher achievers would move to industry and elsewhere.

 

You've also assumed the £2.3 billion in additional VAT revenue will be spent on education... If its one thing we've already learned from this government, its how readily they lie, and how quickly they will sell out the needy.

 

 

 

Every example you have provided shows a short sightedness and myopathy that fails to grasp the realities of what actually happens.

 

 

“Again, short sighted, those parents with higher standard of education very likely received it in a Private School or Grammar school system, or from a school in a very good area.”

 

Precisely my point, thank you.

 

The £2.3Billion is an already announced education budget increase, I did provide a link.

 

The Government have not sold out any of your off topic needy.

 

[Chomper Higgot]

An interesting analysis, not the doom we are being told to expect:

 

https://ifs.org.uk/publications/tax-private-school-fees-and-state-school-spending

[JonnyF]

1 minute ago, Chomper Higgot said:

An interesting analysis, not the doom we are being told to expect:

 

https://ifs.org.uk/publications/tax-private-school-fees-and-state-school-spending

 

Still jealous of those private school "rich" kids I see...

 

Get over it. 

[Chomper Higgot]

7 minutes ago, JonnyF said:

 

Still jealous of those private school "rich" kids I see...

 

Get over it. 

This is a discussion on schools Jonny, it’s not the junior school playground.

 

[Bkk Brian]

3 minutes ago, Chomper Higgot said:

An interesting analysis, not the doom we are being told to expect:

 

https://ifs.org.uk/publications/tax-private-school-fees-and-state-school-spending

So an article from over a year ago, tell that to the parents of kids who are taking the gov to court because their children cannot be provided the same level of support in a state school...........

 

"Smaller schools with lower fees are believed to be most at risk, and government sources have told the publication that these schools are under close scrutiny. To counteract potential disruptions, a government source told The Times: "We have to plan for the worst. But there’s a limited amount we can do, so contingency plans are necessary."

 

Meanwhile, the ISC, which represents 1,400 private schools, announced in November that it had decided to take legal action against the Government. In late December, the ISC revealed that six families, supported by the ISC, officially filed a judicial review claim to the High Court to challenge the introduction of VAT."

 

https://www.business-live.co.uk/enterprise/government-prepares-potential-private-school-30666486

 

 

 

[richard_smith237]

32 minutes ago, Chomper Higgot said:

An interesting analysis, not the doom we are being told to expect:

 

https://ifs.org.uk/publications/tax-private-school-fees-and-state-school-spending

 

That link is a good insight into the financial interplay between private and state education sectors, however, the report misses a lot of nuance and misses the far-reaching implications on educational equity and public finances.

 

Note: the IFS is funded (in part) by UK government departments.

 

 

1) Disparity Between Private School Fees and State School Spending: The report notes that in 2022–23, average private school fees were £15,200, nearly 90% higher than state school spending per pupil, which was £8,000. This gap has more than doubled since 2010.

Counterargument: While the nominal gap has increased, this comparison doesn't account for differences in services provided. Private schools often offer additional facilities, extracurricular activities, and lower student-to-teacher ratios, which contribute to higher fees. Therefore, a direct financial comparison may not fully capture the value proposition of private education.

 

2) Stability of Private School Attendance: Despite rising fees, the proportion of pupils attending private schools has remained around 6–7% over the past two decades.

Counterargument: The steady percentage may mask underlying socioeconomic factors. Higher-income families might continue to afford private education, while middle-income families are increasingly priced out, potentially leading to greater educational inequality - the report also makes a huge assumption that the demographic for private schools is concentrated at the very top of the income distribution - I'd like to see the facts and real data here as the assumption that this will only impact those who can afford is very flawed IMO but fits perfectly with the governmental bias, in the hope they will receive the support along the lines of 'tax the rich' - the rich won't be impacted, the middle income and lower income demographics will be.

 

3) Revenue from Removing Tax Exemptions: The IFS estimates that eliminating tax exemptions, such as introducing VAT on private school fees, could generate approximately £1.6 billion annually in additional tax revenue.

Counterargument: Implementing VAT on private school fees could lead to unintended consequences, such as increased financial strain on families, potential reductions in private school enrolments, and a subsequent rise in demand for state school places. This shift could offset the anticipated revenue gains due to the need for increased state funding to accommodate additional students.

 

4) Impact on State School Funding: A projected 3–7% decrease in private school attendance due to fee increases would necessitate an additional £100–300 million per year for state schools to accommodate the influx of students.

Counterargument: The actual impact on state schools could be more significant than estimated. An influx of students may strain resources, affect class sizes, and potentially diminish the quality of education. Moreover, regional disparities in state school capacities could lead to uneven effects across the country.

 

5) Net Public Finance Impact: After accounting for additional state school funding needs, the net gain to public finances from removing tax exemptions is estimated at £1.3–1.5 billion per year, potentially allowing for a 2% increase in state school spending targeted at disadvantaged students.

Counterargument: The projected net gain may be overly optimistic. Administrative costs associated with implementing and enforcing new tax policies, potential tax avoidance strategies by private schools or parents, and the economic impact of reduced disposable income for families could diminish the expected financial benefits.

But, as highlighted earlier (copy and paste)  >> If its one thing we've already learned from this government, its how readily they lie, and how quickly they will sell out the needy << will the labour government really re-invest that £1.6 BN into state schools or spend it elsewhere ?

 

6) Uncertainty and Potential Risks: The report acknowledges uncertainties, including potential reductions in labour supply and tax avoidance behaviours, which could affect the outcomes of removing tax exemptions.

Counterargument: These uncertainties highlight the complexity of the issue. Policymakers should consider comprehensive impact assessments and explore alternative strategies to address educational funding disparities without unintended negative consequences.

 

 

 

 

 

[JonnyF]

15 minutes ago, Chomper Higgot said:

This is a discussion on schools Jonny, it’s not the junior school playground.

 

 

A discussion fuelled by the revenge/envy based politics of the vitriolic left.

 

But feel free to continue with your class warfare, comrade. Even if that involves disrupting the education and stability of teenage children during their formative years.

[Chomper Higgot]

9 hours ago, richard_smith237 said:

 

That link is a good insight into the financial interplay between private and state education sectors, however, the report misses a lot of nuance and misses the far-reaching implications on educational equity and public finances.

 

Note: the IFS is funded (in part) by UK government departments.

 

 

1) Disparity Between Private School Fees and State School Spending: The report notes that in 2022–23, average private school fees were £15,200, nearly 90% higher than state school spending per pupil, which was £8,000. This gap has more than doubled since 2010.

Counterargument: While the nominal gap has increased, this comparison doesn't account for differences in services provided. Private schools often offer additional facilities, extracurricular activities, and lower student-to-teacher ratios, which contribute to higher fees. Therefore, a direct financial comparison may not fully capture the value proposition of private education.

 

2) Stability of Private School Attendance: Despite rising fees, the proportion of pupils attending private schools has remained around 6–7% over the past two decades.

Counterargument: The steady percentage may mask underlying socioeconomic factors. Higher-income families might continue to afford private education, while middle-income families are increasingly priced out, potentially leading to greater educational inequality - the report also makes a huge assumption that the demographic for private schools is concentrated at the very top of the income distribution - I'd like to see the facts and real data here as the assumption that this will only impact those who can afford is very flawed IMO but fits perfectly with the governmental bias, in the hope they will receive the support along the lines of 'tax the rich' - the rich won't be impacted, the middle income and lower income demographics will be.

 

3) Revenue from Removing Tax Exemptions: The IFS estimates that eliminating tax exemptions, such as introducing VAT on private school fees, could generate approximately £1.6 billion annually in additional tax revenue.

Counterargument: Implementing VAT on private school fees could lead to unintended consequences, such as increased financial strain on families, potential reductions in private school enrolments, and a subsequent rise in demand for state school places. This shift could offset the anticipated revenue gains due to the need for increased state funding to accommodate additional students.

 

4) Impact on State School Funding: A projected 3–7% decrease in private school attendance due to fee increases would necessitate an additional £100–300 million per year for state schools to accommodate the influx of students.

Counterargument: The actual impact on state schools could be more significant than estimated. An influx of students may strain resources, affect class sizes, and potentially diminish the quality of education. Moreover, regional disparities in state school capacities could lead to uneven effects across the country.

 

5) Net Public Finance Impact: After accounting for additional state school funding needs, the net gain to public finances from removing tax exemptions is estimated at £1.3–1.5 billion per year, potentially allowing for a 2% increase in state school spending targeted at disadvantaged students.

Counterargument: The projected net gain may be overly optimistic. Administrative costs associated with implementing and enforcing new tax policies, potential tax avoidance strategies by private schools or parents, and the economic impact of reduced disposable income for families could diminish the expected financial benefits.

But, as highlighted earlier (copy and paste)  >> If its one thing we've already learned from this government, its how readily they lie, and how quickly they will sell out the needy << will the labour government really re-invest that £1.6 BN into state schools or spend it elsewhere ?

 

6) Uncertainty and Potential Risks: The report acknowledges uncertainties, including potential reductions in labour supply and tax avoidance behaviours, which could affect the outcomes of removing tax exemptions.

Counterargument: These uncertainties highlight the complexity of the issue. Policymakers should consider comprehensive impact assessments and explore alternative strategies to address educational funding disparities without unintended negative consequences.

 

 

 

 

 

A lot of ‘could’ and mights’ in that.

 

Yes the IFS is partly defunded by Government, though considered independent it is also accused of having a ‘neo-liberal’ bias. The report I linked and you responded to was published in July 2023, the then Government was Tory.

 

Addressing your points:

 

1. Yes those are a number of the different offerings’ of private schools, they do relate to funding and hence the necessity for the increase of £2.3Billion into state schools - More is needed but it’s a start.

 

2. The report recognizes the established economic principle of ‘an inflexible demand curve’. The critique missing is of the ‘mass exodous’ the doom scenarios play on.

I don’t see the assumption of ‘demographic concentration’.

 

3. The report addressed these issues.

 

4. It might, but your argument is, in summary, the report might be wrong.

 

5. There is no new tax collecting administration, VAT tax collecting is well established and operates on billions of transactions annually. Schools might want to attempt avoiding paying VAT, it’s not a good idea, very easily traced and prosecuted.

 

Your repeat of the anti Labour political polemic was also addressed earlier.

 

6. There’s uncertainty in everything, except it would seem the predicted doom.

 

Thank you for taking time to address the report and my earlier post.

 

 

 

[Chomper Higgot]

9 hours ago, JonnyF said:

 

A discussion fuelled by the revenge/envy based politics of the vitriolic left.

 

But feel free to continue with your class warfare, comrade. Even if that involves disrupting the education and stability of teenage children during their formative years.

Actually the evidence I produced was from an IFS report published in July 2023 at the time of a Tory Government.

 

The IFS is regarded as independent, though in part Government funded and with a Neo-Liberal bias.

 

‘Vitriolic’ you say.
 

[brewsterbudgen]

It was a manifesto commitment and Labour won the election.  The government have been, rightly, criticised for some of their decisions that were not in the manifesto, but this one was.  

[phetphet]

11 hours ago, Chomper Higgot said:

The arrival in state schools of children from families motivated to get their children the best education will undoubtedly provide a driving force for improvement of all children in the schools they bless with their presence.

Or possibly drag the education level of those children from private schools down to what their parents were trying to avoid in the first place. i.e. a bad education in a state school.

 

I'm not saying all State schools are bad, but there is a reason why politicians such as Tony Blair, Harriet Harman, and Nick Clegg all send their children to London Oratory. A State school I doubt many other parents would get their children into.

 

What was it that George Orwell said? We are all equal, but some are more equal than others?

 

 

[Chomper Higgot]

43 minutes ago, phetphet said:

Or possibly drag the education level of those children from private schools down to what their parents were trying to avoid in the first place. i.e. a bad education in a state school.

 

I'm not saying all State schools are bad, but there is a reason why politicians such as Tony Blair, Harriet Harman, and Nick Clegg all send their children to London Oratory. A State school I doubt many other parents would get their children into.

 

What was it that George Orwell said? We are all equal, but some are more equal than others?

 

 

“I'm not saying all State schools are bad, but there is a reason why politicians such as Tony Blair, Harriet Harman, and Nick Clegg all send their children to London Oratory. A State school I doubt many other parents would get their children into”

 

Thank you for providing an example of precisely why it’s important for the children of the active middle class to be in state schools.

 

These parents take part investing the standards are raised for all pupils in the school.

 

 

[Bkk Brian]

1 hour ago, brewsterbudgen said:

It was a manifesto commitment and Labour won the election.  The government have been, rightly, criticised for some of their decisions that were not in the manifesto, but this one was.  

Indeed:

 

VAT on private schools
Labour aim to raise £1.5 billion from applying VAT and business rates to private schools. Labour confirmed this policy a while back and the debate as to its likely effects has been raging ever since.

Most private schools – who are facing pressure from rising wage and pension costs - will not be able to absorb the imposition of VAT at 20% and will pass this onto parents. It’s likely to make a private education unaffordable for most middle-class families, even where earnings are high and more children will end up in state schools instead.

A 20% hike would be a final deal-breaker for many thousands of families. A recent survey by Bains Cutler suggested that as many as 42% of the total number of children currently in fee-paying places could be taken out of their schools and into the state system over the next five years.

It means that private education will become the preserve of the wealthiest families and, increasingly, high net worth overseas parents seeking the prestige of a British private education for their children. There’s the added danger that untold pressures are brought to bear on the best state schools.

https://www.evelyn.com/insights-and-events/insights/labour-manifesto-tax-evasion-vat-private-schools/

[Will B Good]

On 12/28/2024 at 7:34 AM, thaibeachlovers said:

It's going to be disaster when all those private school kids are suddenly sent to public schools.

Do the morons clowns in Labour never think about consequences of their actions?

 

Private school kids attend public schools.....I think you mean state schools or state funded academies.

[Bkk Brian]

12 minutes ago, Bkk Brian said:

Indeed:

 

VAT on private schools
Labour aim to raise £1.5 billion from applying VAT and business rates to private schools. Labour confirmed this policy a while back and the debate as to its likely effects has been raging ever since.

Most private schools – who are facing pressure from rising wage and pension costs - will not be able to absorb the imposition of VAT at 20% and will pass this onto parents. It’s likely to make a private education unaffordable for most middle-class families, even where earnings are high and more children will end up in state schools instead.

A 20% hike would be a final deal-breaker for many thousands of families. A recent survey by Bains Cutler suggested that as many as 42% of the total number of children currently in fee-paying places could be taken out of their schools and into the state system over the next five years.

It means that private education will become the preserve of the wealthiest families and, increasingly, high net worth overseas parents seeking the prestige of a British private education for their children. There’s the added danger that untold pressures are brought to bear on the best state schools.

https://www.evelyn.com/insights-and-events/insights/labour-manifesto-tax-evasion-vat-private-schools/

A snippet from the Executive Summary pdf download mentioned in the above report. Its actually from 2018 so Labour had plenty of time to ponder this.....I guess that's why the Conservatives never touched it, too much of a disaster waiting to happen if implimented.

 

Some independent schools would need to close entirely, and most schools would need to
scale-back their educational offer, whether by merging classes, stopping certain subjects,
limiting curriculum choices, dropping co-curricular activities or reducing the pastoral care
they provide. The extent of these changes is likely to mean that the UK’s educational offer
and its international attractiveness would be harmed
3) The VAT policy would cause significant upheaval and disruption to the lives and education
of many tens of thousands of children, often at key stages of their lives
4) The sheer number of pupils leaving the sector and needing to be educated by the state
would also place great strains on the maintained sector, with the need to build new schools
and classrooms and absorb many pupils quickly. Further, as it would also be virtually
impossible to predict in advance in which towns or regions such demand would take place,
the move would be a recipe for a great deal of community tension, for example in relation
to school catchment areas, first-choice preferences and the National Schools Offer Date
5) The policy would therefore be likely to harm not only the education of those independent
school pupils who switched, but also the education of pupils in receiving state schools

[RayC]

13 hours ago, Bkk Brian said:

Don't try and tell me what I posted, I know what I posted and it was not opinions but factual statements that were then backed up with credible links. 

 

Imo what you posted was opinion not fact.

 

Don't try and tell me what opinions I can post and what I can't.

[Bkk Brian]

Just now, RayC said:

 

Imo what you posted was opinion not fact.

 

Don't try and tell me what opinions I can post and what I can't.

Obviously your opinion is not credible. Anything to add to the actual topic?

[RayC]

1 minute ago, Bkk Brian said:

Obviously your opinion is not credible. Anything to add to the actual topic?

 

And yours is? Ahh, the misplaced arrogance.

 

Anything to add to the topic? No, I'm done for the moment.

[Bkk Brian]

5 minutes ago, RayC said:

 

And yours is? Ahh, the misplaced arrogance.

 

Anything to add to the topic? No, I'm done for the moment.

Anything to add to the topic? No, I'm done for the moment.

 

Thought not, just personal attacks. The only thing left when you have nothing.

[jayboy]

14 hours ago, Chomper Higgot said:

The claim that private schools ultimately benefit state schools needs something to back it up.

 

 

https://www.thetimes.com/comment/columnists/article/labour-should-learn-from-private-schools-not-terrorise-them-657w2wfdb

[Chomper Higgot]

2 minutes ago, jayboy said:

 

https://www.thetimes.com/comment/columnists/article/labour-should-learn-from-private-schools-not-terrorise-them-657w2wfdb

Your linked article is behind a paywall.

 

The heading suggests an opinion on what the writer thinks state schools should do, it doesn’t appear to provide evidence of private schools benefiting state schools.

 

The concept of state schools terrorizing private schools is bizarre.

 

[Bkk Brian]

5 minutes ago, jayboy said:

 

https://www.thetimes.com/comment/columnists/article/labour-should-learn-from-private-schools-not-terrorise-them-657w2wfdb

Just read it. I doubt the left will want to read it though.

 

Labour should learn from private schools, not terrorise them

But what the Keir Starmer government is doing is potentially brutal. It may inflict the biggest state-instigated damage on private school pupils in history.
No one knows exactly how big the hit will be. Predictions differ wildly. The policy has played well with Labour supporters, not least those on the left whom Starmer has been eager to woo

https://archive.ph/Ldesh