Proposal to add VAT to private school fees – a knee-jerk notion

18 Apr

Two politicians at the opposite ends of the spectrum of thinking – Michael Gove, former Education Secretary, and Jeremy Corbyn, leader of the Labour Party –  have come together on a plan to “soak the rich”.

Writing in The Times (Put VAT on school fees and soak the rich) on 24 February 2017 Gove pointed to “group of highly successful enterprises that is pretty much insulated from the present row about business rates” – private schools – because they are charities.  Because private schools are VAT-exempt, writes Gove, “the wealthiest in this country” are able “to buy a prestige service that secures their children a permanent, positional edge in society at an effective 20% discount”.

Turning to the knotty issue of the number of scholarships and bursaries these schools provide, he criticises (with a rhetorical question) the small number of students given educational opportunities from depressed areas of the country such as Knowsley, Sunderland, Merthyr Tydfil and Blyth Valley.

Two months later, Jeremy Corbyn, Labour’s leader, and the Shadow Education Secretary, Angela Rayner, came up with a not dissimilar proposal to charge parents VAT on the fees they pay to private schools, with a view to using the income to offer free meals to all children in primary schools.

Rayner told the BBC: “There are many private businesses that are paying VAT that are struggling.  I don’t see why the state school system should subsidise the private sector.”

She added: “The evidence from the National Centre for Social Research (NCSR) and the IFS (the Institute of Fiscal Studies) have both been quite clear that actually providing universal school meals at primary level will raise attainment.”

She was backed by Labour’s headquarters which claimed that research had shown that access to free school meals improved educational attainment by two months.

Commentary

Gove and Corbyn are not natural bedfellows, yet they have become allies on the sensitive issue of financially imperilling independent schools that educate 7% of the nation’s population.   Are they justified?

Gove states that the fees for several private schools are as high as £30,000 annually per pupil, out of reach of all except the wealthiest in this country.  It would, consequently, be unfair, he argues, for the Joe Bloggs and Jane Everybody to subsidise people who can afford to send their children to such places.

However, the reality is that many middle-class families make huge sacrifices to send their children to private schools for a multitude of reasons, not least because they are unable to find places for the children at good state schools in their areas.   Besides, it is not always the case that good state schools are suitable for the pupils concerned.

And what of Rayner’s claim that (free) lunches help to raise attainment by two months?  Lorraine Dearden, one of the authors of the IFS report, said that more research was needed on this matter before the respected think tank would back such a policy.   Yet, Rayner wants to lead a charge down this (semi-blind) alley.

Dearden’s comments apart, there could well be unintended consequences for all of us if the government decides to impose VAT on the parents of pupils who attend independent schools.

Firstly, large numbers of parents would not be able to afford the new fees at independent schools and would come tramping back to state schools to find places.  In several cases, places at state schools just don’t exist.  Primary numbers have gone up considerably.  This increase has begun feeding into secondary schools.

Secondly, such a move will result in the ordinary citizen having to find the resources to educate these children.  The money raised by imposing VAT on the fees paid by parents for independent school places will now be spent on creating more places at state schools.  There will be nothing left to fund free meals for all primary school children.

Thirdly, is it right for us to spend money to fund free lunches for children whose parents can afford to pay for them.  Parents, who are struggling, can apply for free school meals for their children; so, they will in no way be disadvantaged.

Fourthly, schools have lost out significantly on the Pupil Premium funding for pupils at Key Stage 1 because of the unintended consequences of universal free school meals for them.   Many parents whose children would be entitled to apply for free school meals do not do so, i.e. apply, because their children receive them anyway.   Others are too lazy and/or feel embarrassed at being identified as poor and needy.   School budgets, therefore, have become the casualty with a loss in the Pupil Premium Grant. (PPG).

Finally, the work being done to involve private schools in helping develop state education will be damaged.  The public-private partnership in education has begun to grow and flourish as evidenced by the number of private schools which have sponsored academies and those that have opened their facilities and personnel to pupils in state schools.   All that work could be set back by stirring discontent and ill-will through a hair-brained VAT plan.

Gove’s idea of charging VAT to the superrich who send their children to state schools, however, will not be as hare-brained if the superrich were asked to volunteer the VAT payment to their children’s schools.  Private schools can then use that resource to forge even closer links with state schools by supporting them with their facilities.

I end with a plea.  Can those who consider themselves our leaders – the movers and the shakers – please, please give more careful thought to the proposals they want to make before they make them instead of engaging in popular sound bites?

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