This may be contentious, but any decent blog ought to be thought-provoking.
In many ways, my leading letter in The Telegraph in December 2022 was the first major contribution to national awareness of VAT and its possible impact.
Since then the idea has become reality, and much work has been done to try to assess the impact and to push back the waves. Actually it hardly matters whether x or y percent of parents will move to state schools and whether a or b percent of independent schools will close, just as it hardly matters whether a school can reclaim two or three percent of its VAT by building more classrooms for the pupils it won't have.
Since July all sorts of similar arguments have been made about how nasty it is to tax private school parents, and of course it is. But emotional pleas cut no ice, whereas a logical argument might have done.
So here's one. If the new UK Government really wants £1.6 billion to pay for improving state education, a more reliable way of getting it is to charge the most affluent families in state schools a couple of thousand pounds. If it's unfair that pensioners on below average incomes should get £300 for their electricity, it's even more unfair that 40% taxpayers should get completely free education for their children, paid for by those very same pensioners in addition to their electricity bills.
And here's another logical argument: if it's OK for families to pay for prescriptions, why isn't it OK for them to pay for schooling?
Is anyone listening? Probably not, and when I was with a think-tank that put the very same idea to a Secretary of State some years ago, we were told it was politically impossible. Just as, I suppose, charging for prescriptions or cancelling winter fuel is.
Arguably, VAT on fees could be the wake-up call that independent schools have needed for a long time.
For far too long, independent schools have been embarrassed about being world-class brilliant. For far too long, we've perpetuated the idea that maintained schools are just as good, except that they don't have the latest nuclear-powered lawn mowers. Which is why independent schools lend them one, so there can be a level playing field.
Imagine Tesco saying there's no reason to shop at Tesco, and offering to give their Finest food to corner shops so that families can eat for nothing and spend their money on holidays to Disneyland instead.
And for far too long, private schools have ignored the fact that they charge a mere 100% more tban maintained schools. This despite the fact that they have similar buildings with similar fences, fire alarms and furniture, and that all schools employ people who breathe several times a minute, who have been DBS checked, and who moan about marking, lesson prep, the bossy boss, the spotty kids and the awkward parents.
So what do you actually get for your 100% more? That's the question that everyone has been ducking, everyone has been embarrassed to try to explain, and that everyone will now have to start being able to talk about.
Fees have long been too expensive, and schools have long been slowly but surely pricing themselves out of the market. For almost 20 years I've been showing schools what their fees mean, in terms of the income required and the number and type of parents who can still afford them. And the number and type of parents who can't still afford them, which is most of the people that schools wish they still had.
At 20%, the tax will force private education even further up market, bringing with it various impacts on schools, parents and of course the children.
One big impact will be some proper segmentation within the market, creating more choice at different fee levels and removing some of the weakest players, which will create more opportunities for the strongest ones. Horrid to say this and horrid to read this, but it will be good for those who survive, while those who don't would probably have closed some other time.
Comments