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VAT on fees: Revenue raised will not be earmarked for state schools, despite chancellor's claims
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Independent sector
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Billions of pounds Labour claims it will raise from its independent school tax policy will not be reserved for improving state schools, despite Rachel Reeves’s assurances it would. The chancellor stated last weekend that “every single penny” of the £1.5 billion-a-year raised by applying VAT to independent school fees would go to state education. However, The Telegraph has revealed that the Treasury has made no plans to earmark the funds, meaning they could be used for various government initiatives. Speaking to the paper, Julie Robinson, chief executive of the Independent Schools Council (ISC), said: “We have repeatedly raised concerns that this policy will not produce the money the government expects. It is extremely concerning to find out at this late stage that, in the event that anything is raised, it is now not even guaranteed that these funds would go to state schools.” By Pieter Snepvangers.
Rudolf Eliott Lockhart, chief executive of the Independent Schools Association (ISA), featured on BBC Radio 4’s Money Box programme over the weekend, where he discussed concerns surrounding the VAT policy. Highlighting the diversity of provision within the independent sector, he warned that while large and financially robust schools may be able to handle the additional cost, the policy “will hit small and modest schools much harder”. He added that for many parents, particularly those who have chosen specialist independent provision, fee rises resulting from the tax change will be “the straw that breaks the camel’s back”. Referencing the news that revenue raised from the policy will not be ringfenced for education, Mr Eliott Lockhart concluded: “I’ve got real concerns that an already creaking state school system won’t benefit from a single penny, but they will have to deal with an influx of new pupils pushed out of the independent sector – and I don’t think parents are going to like that.” Listen from 07:17.
In an interview with ITV News, chair of governors at Darul Hadis Latifiah School Mohammed Farid Chowdhury warned that the government's VAT on fees policy is putting faith schools at risk. He said: "I just cannot understand why they would treat schools like ours as if we're elite - we have so much to lose. Our parents are largely working class, scrimping and saving by whatever means necessary to send their boys here." Co-headteacher Maruf Ahmed added that the school, rated Outstanding by Ofsted on a number of metrics, is funded entirely by fees and community donations, and the imposition of VAT risks "crippling" it. Speaking to ITV News, Julie Robinson warned: "I am worried about the loss of variety and diversity in education that this could create. Parents deserve to be able to choose the kind of education they want for their families." By Mahatir Pasha.
Writing in the Daily Mail, Dominic Lawson criticises the government's VAT on fees policy, saying ministers are "pursuing the politics of envy" and arguing that the policy would harm educational standards without benefiting state schools. Mr Lawson contends that the policy is driven by a desire to penalise independent schools rather than improve overall educational outcomes. Calling for ministers to stop targeting independent schools, Mr Lawson concludes: "When the state sector is confronted with the requirement to handle possibly thousands of extra pupils with special educational needs, whose already hard-pressed parents cannot afford to pay the new education tax at their children’s independent special schools, it will be Bridget Phillipson’s job to explain that away. What a cruel mess."
Experts have warned that independent schools may be forced to sell off their sports fields amid Labour's tax policy, potentially jeopardising partnership programmes within their communities. From April, business rates relief for independent schools will end, meaning those with sports fields and playgrounds could face much bigger tax bills. Commenting on the issue, chief executive of the Independent Schools’ Bursars Association (ISBA) David Woodgate said: “In light of the financial shocks, schools will be reviewing their operating models ... A prep and a senior school could merge onto one site and then sell off the other site, for example. We are seeing mergers of schools already. You would then have less property which would be liable to business rates.” On the sharing of facilities, he continued: "Clearly, there is a cost involved to that which may become something that is no longer affordable – although most schools will cut absolutely everything else before they consider even looking at this. If this partnership work were to stop, the local communities would be the worse for it. Our schools don’t tend to have lots of surplus facilities – selling anything off land or buildings will inevitably have an impact on something else." Expressing his concern, Rudolf Eliott Lockhart said: “I worry about the impact on some independent schools [that] will be pushed into real financial difficulty and impoverished as a result. We see schools in financial difficulty at the margins every year – but the politically driven financial pressures mean this is a particularly difficult year.” By Camilla Turner and Ollie Corfe, The Telegraph.
The Telegraph looks at the cost of sending a child to independent school, including its own analysis that suggests average boarding school fees will cost more than £50,000 a year. On the government's VAT on fees policy, Julie Robinson is quoted, saying: “Schools strive to keep fees as low as possible, acutely aware of the cost pressures families themselves are facing. Means-tested bursaries have outpaced fee rises, having increased by 30 per cent over the past decade. But the combined impact of these financial shocks is unprecedented, and they have significant implications for schools and their ability to operate.” By Ben Butcher.
Money reporter Lucy Andrews warns that the government's VAT on fees policy may have repercussions for families with mortgages. Individuals share their experiences, while one expert says: “With the VAT charge added on top, what they will be able to borrow from their lender will quite simply be less.” The Sunday Times.
The Telegraph speaks to Ava Lambert, whose parents told her in the summer that the VAT increase on her school fees meant they could no longer afford her independent education, making her feel sick and anxious about the future. The government's VAT on fees policy forced the Lamberts to choose between selling their house or pulling Ava out of her school. As a result, Ava has since taken the only state school place available, which is many miles away. Her mother, who has had to mostly give up work as a nurse practitioner to transport her daughter to and from school, shares her frustration over the lack of response from government officials, and Ava talks about the impact on her education, calling the disruption "unfair" and "a nightmare". By Charlotte Lytton. Ava is also interviewed by Louise Eccles for The Sunday Times.
Reference is made to research by the ISC and several schools in membership of the ISC's constituent associations are mentioned across this weekend's coverage.
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Letters: VAT on fees policy
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Letters
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The Sunday Times features a number of letters on the subject of the government's VAT on fees policy. Author Chris Pratt agrees with Anthony Seldon’s suggestion that there are better ways to optimise independent schools' contributions than imposing VAT and removing business rates relief, such as increasing cross-sector partnerships.
Paul White writes to the paper from Kent to challenge education secretary Bridget Phillipson’s claim that the middle class supports VAT on independent school fees. He asserts that neither he nor any other self-identified middle-class individuals he knows back this policy, and criticises the lack of evidence to substantiate her statement.
Paul Dando from Cornwall questions Ms Phillipson’s description of independent school tax exemptions being a “luxury”, arguing that if this logic applies, tax exemptions for nurseries, universities, and vocational courses should also be removed.
Writing in from the Isle of Wight, Yvonne Williams warns that Ms Phillipson’s pledge to represent “pushy middle-class parents” could overwhelm schools already burdened by excessive correspondence, and suggests that parents can better support schools by pushing the government to improve teacher pay, working conditions, and the quality of school buildings.
In a letter to The Telegraph, Gregory Shenkman from London Gregory Shenkman criticises Bridget Phillipson’s justification for imposing VAT on independent school fees, arguing that taxing education is "immoral" and fails to consider the benefits independent school alumni bring to Britain’s economy. He warns that VAT will force many parents to transfer their children to state schools, offsetting the revenue gain with increased costs.
In separate letters to the paper, Norwich-based Andrew Rowlandson warns that the tax policy risks causing "irreparable damage" to the sector, while Nicholas Nelson from Dorset says it is "built on a false premise", serving as a "penalty" levied on those who do not choose state education for their children.
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Child sexual abuse inquiry chair calls on government to take action
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Safeguarding
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Professor Alexis Jay, the former chair of a national inquiry into child sexual abuse, has called for the "full implementation" of reforms outlined in her 2022 report that warned of "endemic" abuse throughout society in England and Wales. Campaign group Act on IICSA, which she leads, has urged ministers to commit to a "clear timeline" for enacting the recommendations from the Independent Inquiry into Child Sexual Abuse (IICSA). The government has stated its support for the proposed changes, and health secretary Wes Streeting said on Sunday that ministers are prioritising "getting on with" implementing the recommendations. By Sofia Ferreira Santos and Henry Zeffman, BBC News.
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90% of schools affected by RAAC still have not had it removed, analysis finds
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RAAC
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More than a year after the reinforced autoclaved aerated concrete (RAAC) scandal came to light, nearly 90 per cent of schools receiving government funding to address the issue have yet to see any work completed, The Independent has revealed. Labour education minister Stephen Morgan has acknowledged that resolving the widespread problem could take as long as five years, leaving thousands of students studying in temporary classrooms. By Archie Mitchell.
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Lockdown babies ‘can’t respond to their own name’, experts warn
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Primary education and early years
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A survey by four charities has revealed concerns about children born during the pandemic, with nearly three-quarters of teachers reporting that "Covid babies" struggle more than previous cohorts, particularly with speech and communication. Experts have warned that some children cannot even respond to their own names, highlighting the need for urgent investment in early intervention. By Poppy Wood, The Telegraph.
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The Independent Schools Council (ISC) monitors the national and educational press in order to keep independent schools up-to-date with relevant education news. The DNS is a service primarily for schools in membership of ISC associations, although other interested parties can choose to sign-up. We endeavour to include relevant news and commentary and, wherever possible, notable public letters. Where capacity allows, we may include links to ISC blogs, press statements and information about school or association events. News stories are selected based on their relevance to the independent sector as a whole. Editorial control of the DNS remains solely with the ISC.
Sign-up to the email service is available on our website.
Members can contact the ISC if they know in advance of news, letters or opinions that are likely to feature in the media, or are aware of existing coverage which they would like to see featured in the DNS.
Headlines and first-line summaries are written by the ISC with the link directing to the source material. You should read and comply with the terms and conditions of the websites to which we link.
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