Private school headteachers warn Labour's VAT raid 'could threaten the viability of hundreds of schools';
Rishi Sunak has accused Sir Keir Starmer of sparking “class war” over Labour’s VAT raid on private schools amid warnings that unaffordable fees will lead to closure.
The Prime Minister said Labor wanted to punish ambitious parents like his own who sent him to Winchester College, a £49,000-a-year boarding school in Hampshire.
The intervention comes amid rising fears schools will close if Labor wins the next election and Sir Keir makes good on his threat to scrap the VAT exemption for private schools.
Speaking on BBC South Today on Thursday, Mr Sunak said: “Labour's approach to this shows, illustrates, that they simply don't understand the aspirations of families like my parents who worked very hard.
“They wanted to do something for their children that they felt would be meaningful to them. The Labor Party's approach to this is to suppress it.
“They don't understand people's desire to provide a better life for their children. They want to punish them for this as part of some kind of class war. I don't think that's right.”
Labour Party plans to create private schools
David Walker, director of the Boarding Schools Association and former vice-principal of Wellington College in Berkshire, said introducing 20 per cent VAT on independent school fees “could threaten the viability of hundreds of schools”.
He also said it could “have a negative impact on the number of scholarships each school can offer to low-income families.”
He said: “There is no doubt that some schools may be forced to close, which will be self-defeating as no one will be able to charge VAT on school fees that are closed.”
John Bryson, professor of entrepreneurship and economic geography at the University of Birmingham, accused the Labor Party of “establishing policies designed to force schools to close and fire teachers.”
An analysis of schools' annual reports by The Telegraph reveals extensive warnings from governors about the potential impact of this policy.
At Bolton School, an independent day school in Greater Manchester whose alumni include Sir Ian McKellen, governors have warned that the introduction of VAT could make tuition fees “largely unaffordable for large numbers of our pupils and potential pupils”.
< p >Telegraph research has found that parents of almost a quarter of day schools will have to pay more than £30,000 if schools absorb the increased costs.
VAT for private schools
Defending the policy, Bridget Phillipson, shadow education The Secretary of State said the money would fund 6,500 new state school teachers.
Sir Keir said this week that private schools would not have to pass on the additional costs of the policy to parents. which he first announced in 2021.
However, independent schools warn that isolating children will not be possible. parents from VAT. Some schools are considering mergers and staff reductions to ensure their viability.
A survey by the Independent Schools Council (ISC) found that 20 per cent of its parents would “definitely” withdraw their children if they felt they could no longer afford it.
About 40,000 children could be forced into state schools, costing the government around £600 million a year.
Jeremy Hunt, the chancellor, put the figure even higher in an autumn statement last year, saying Labour's policies would “lead to up to 90,000 children from the independent sector moving into state schools.”< /p>
Lord Haig and Sir Iain Duncan Smith, the former Tory party leader, also criticized the proposals as “vindictive” and “monstrous”, saying they would also threaten the education of children of parents serving in the armed forces.
The Department of Defense pays most of the cost of tuition for military families, but these proposals could mean additional bills that could make private tuition unaffordable for military personnel.
2,406 Private school tuition exceeds average class cost < p>ISC says the most the impact will be felt by “struggling and sacrificing” who work harder to pay tuition and also threaten “the survival of the smallest independent schools that operate on limited profits and without large endowments.”
Although elite private schools such as Eton and St Paul's Girls may have the resources to offset any fee increases, including millions of pounds in donations, investment and property, most independent schools have fewer than 400 pupils and parents who not super rich.
International students currently make up only 5 percent of all independent school students. But if schools are forced to recruit richer pupils from abroad to subsidize poorer British parents, there are fears the sector could become even more elitist.
Samantha Price, headteacher of Benenden School in Kent, alma mater of the Princess Royal, where fees range from £11,860 to £15,800 per term, has already warned that “many independent schools will have to close or become unmanageable.”
As Silas Edmonds, headmaster of Ewell Castle in Epsom, Surrey, where fees range from £3,695 to £6,731 per term, points out: “The stereotype that is often used of what private schools are like is the image of a child in a top hat. . , standing near Eton.
“But for the vast majority this is not the case. These larger, wealthier schools will be isolated from all this.
“But my school is a charity, we support many children with scholarships and scholarships; parents make huge sacrifices to pay the fees.
“The irony of it all is that Keir Starmer ended up at Reigate Grammar in intensive care – it’s like climbing stairs.”
Five members of the shadow cabinet attended independent schools – David Lammy, shadow foreign secretary; John Healey, shadow defense secretary; Louise Hay, shadow transport secretary; Thangam Debbonaire, Shadow Culture Minister; and Anneliese Dodds, party chair.
Private schools currently have their highest enrollment since records began in 1974, with 554,243 students, up from 474,203 students in 1990, a pre-recession high of 514,531 in 2009 and a pre-recession high of 537,315 in 2020.< /p>< p>ISC estimates the average fees for day schools in the UK to be approximately £5,218 per term or £15,655 per year. However, some economists have downplayed talk of an “exodus” if 20 percent were added on top.
2,406 fees distributed
Luke Sibieta, a senior fellow at the Institute for Fiscal Studies, previously said: “I think the idea that there will be some sort of massive rush once the policy comes into force is incredibly unlikely.
“It's not impossible, but it's incredibly unlikely. This doesn't mean that if you put 20% VAT on fees it won't affect demand, because it probably will.
“But demand for private education is often shaped by things like culture , aspirations, whether you went to private school as a child, so we would probably consider this question to be quite inelastic.”
It's no surprise that headteachers are already “planning for the worst and hoping for the best”, according to Will Goldsmith, headteacher at St George's School in Windsor, where full-time tuition costs between £6,210 and £6,957 per term and £8,637. to boarding school.
His prep school may have educated members of the royal family – Princess Eugenie and Lady Louise Windsor were pupils – but these days he says: “I don't have a single Rolls-Royce driving around my road. The parents are hardworking and down to earth.
“Of course we will do everything we can to keep fee increases to the absolute minimum, but Labor must understand that schools operate on a healthy profit.
“If we have to pay for it somehow, then, of course, we will have to pass it on to our parents. Starmer seems to think that independent people can automatically afford it, but they can't.”
While Mr Goldsmith insisted “we will not turn our backs” on the school's partnership with 13 local state schools, which have provided drama, sports and outdoor education to more than 750 children over the past three years, “we don't have a bottomless pit , which everyone thinks we have.”
He said: “Inflationary increases in fees are creeping up, and then there's an extra 20 percent – you can't even compare the two.” – it’s huge.
“Independent headteachers across the country are trying to plan for this with three key things in mind: making it as accessible as possible for parents, not doing anything that would undermine our children's education, and continuing to contribute to the wider education system .
He played down the idea that schools would be able to recoup some of the money through a retrospective refund of VAT spent on capital projects.
“I modeled for my school and talking about £150,000 back is nothing in the grand scheme of things,” he said.
Private school fees
And as Mr Edmonds notes, a big announcement is expected in the coming days about the Teachers' Pension Scheme (TPS), which has seen contributions rise in recent years after the Treasury increased employer contributions from 16.48 per cent of teachers' pay to 23. 6 percent.
A third of private schools have since left the scheme, sparking a wave of teacher strikes.
“This could lead to more schools leaving TPS,” he warned .
“We don’t want to lay off employees. One of the reasons people choose independent schools is smaller class sizes.
“We don't want to cut staff salaries, cut extracurricular activities or all the enrichment opportunities, so it will be very difficult.”
Although Labor believes there should be a U-turn on the closure of private schools. Because their charitable status will protect scholarships and bursaries, schools may have to limit subsidies to cover the added VAT.
“We spend just under £1 million a year on scholarships and bursaries,” Mr Edmonds said.
“We may have to think about whether we can actually do this anymore, and that will harm the very children that Labor is trying to help in terms of social mobility.”
Although schools can reclaim VAT on partial scholarships, those that offer full scholarships, such as The Latymer School or Christ's Hospital in London, are classed as providing free education and therefore may not be eligible for the discount.
Michael Hartland, headteacher at Chase Grammar in Staffordshire, where fees range from £6,915 to £13,779, agrees with Mr Edmonds that “it is entirely fair to say that this may impact on the school's ability to provide such a large number of scholarships.”
< p>He added: “Scholarships can only be given from surplus – where else are you going to cut? You can't cut staff or reduce the quality of the offering.”
Describing his 210-pupil school as “just management”, he added: “We're in a former mining town in Cannock outside Birmingham.
“This is a poor area, so we are concerned about how we are going to help parents who are just paying school fees?
“We support a large number of scholarship students, students with special educational needs, who have experienced bullying and have mental health problems.
“Our main concern is that the most vulnerable students who come to us as a last resort will suffer the most.
“Some schools that are already very fragile will be brought to extremes, but the richest will be fine – that's the stupidity of the whole plan.
“I believe that the schools will try to cover as much of the costs as possible while remaining going concern.”
Private schools: income versus fees
The Labor Party has suggested that VAT will not apply to local government fees. funded children under the Education, Health and Care Plan (EHCP), which is required for children with SEN. But, as the ISC noted, there are 103,000 SEN students in the private sector, but only 7,000 of them have an EHCP.
Michelle Catterson is headteacher of the £7,380 to £9,377-a-year Moon Hall School in Reigate, Surrey, a special needs school for 185 children with dyslexia, 70 per cent of which is funded by 11 local authorities.
” It would be a disaster and I don’t take that term lightly,” she said.
“For all my parents, this is not a choice between our school and the public school. All our students already went to regular schools, because they went to third grade with us.
“We are not a very rich school. We do not have a policy of donations or wealthy beneficiaries.
“The driveway isn't filled with fancy cars, and parents don't go on fancy vacations many times a year. Parents are making sacrifices to send their children here because their children have failed in the public sector.”
For some, Labour's policies are reminiscent of Sir Tony Blair's attacks on grammar schools. The former Labor leader introduced a ban on the creation of new grammars in 1998.
Chris McGovern, chairman of the Campaign for Real Education, said: “Labour tried to destroy grammars, and now they are trying to destroy private schools.”