Labour’s plans to add VAT to independent school fees could cost the country £650m annually according to Treasury figures – with a significant impact on local state schools and local primaries.
The UK Treasury calculated the figures based on 100,000 students leaving the independent sector and moving to the state sector. Rachel Gilmour, Liberal Democrat parliamentary candidate for Tiverton & Minehead said that Labour had failed to fully think through the proposed change, despite it being a manifesto pledge since 2017.
She said: “Charging VAT on school fees will be a 20% financial burden that either hard-working parents have to suffer or the schools themselves have to swallow. The likely result will see a catastrophe in the sector and tax payers footing the bill.”
In 2018 a report by Baines Cutler warned that charging VAT on school fees would “for many years cost money rather than raise money”. They calculated that, for every child leaving the independent sector, tax payers would have to pay extra tax of £10,000 per child in perpetuity plus an additional £10,000 in capital. The report also stated that a drop off of 134,800 pupils in the independent sector would create 33,700 redundancies.
Mrs Gilmour added: “Targeting independent schools in this way will see hundreds closing, and parents who strive to pay fees being unable to afford a price hike and removing their kids. Either way, tens of thousands of children will enter the state system where pitiful funding under the Conservatives has left classes full and building infrastructure wanting. Children will face upheaval and disruption to their educations, not to mention the emotional and mental impacts.
“Tiverton High School already has predicted students numbers in excess of its capacity. How is it supposed to cope if we see an unmodelled rise in student numbers? Both the main parties are guilty of ignorance when it comes to schooling and certainly Labour needs to rethink its pledge on VAT. Where is the money coming from to extend schools and pay for additional staff when the state has to educate tens of thousands more students at all age levels?
“While independent school can be seen as an unnecessary luxury, the reality is that they give people choice and relieve a burden on the state sector.”
It has been reported that the head of the Independent Schools’ Bursars Association (ISBA), David Woodgate, previously warned that “in a lot of families, all of the second income goes on school fees”. Rachel Gilmour also questions how independent schools would be able to afford to provide bursaries to poorer students.
Baines Cutler report:
https://www.isc.co.uk/media/5926/isc-vat-full-report-1018-for-circulation.pdf
Treasury figures of 100,000 (17%) students forced our of independent education :https://independentschoolmanagement.co.uk/news/treasury-questions-labours-proposed-school-fee-vat-plans/
Promoted by David Wulff on behalf of Rachel Gilmour (Liberal Democrats) both at 8-9 Mountbatten Road, Tiverton, EX16 6SW.
