ISC Daily News Summary

In a House of Commons written question for the Ministry of Defence (MoD), Labour MP Nadia Whittome asked what assessment had been made of the potential benefits of (a) increasing the termly rates and (b) expanding the eligibility criteria for the Continuity of Education Allowance. Responding, Minister for Veterans and People Al Carns said: "The Ministry of Defence recognises the unique circumstances faced by our service personnel and that frequent mobility can disrupt children’s education. Continuity of Education Allowance (CEA) helps by providing the children of service personnel with a stable education that would not otherwise be available in the state-maintained day school sector, due to their family’s mobility. Termly rates of CEA are recalculated to account for changes to fees made by schools for the new academic year. This is usually an annual event but as schools changed their fees for January 2025 in response to the government’s new VAT policy, the CEA rates were recalculated in December 2024. New rates will be calculated ahead of changes in school fees for September 2025." Mr Carns also referenced the criteria for making a CEA claim.

During a debate on fiscal policy and defence spending in the House of Lords, Conservative peer Baroness Goldie asked: "If the government really value our armed forces personnel, why are they landing families with the full impact of VAT on private school fees, when the Continuity of Education Allowance will meet only part of that increase—and yet they are prepared to exempt United States armed forces personnel in this country from paying VAT on private school fees?" Lord Coaker replied: "The noble Baroness will know that the government have increased the Continuity of Education Allowance to meet 90 per cent of the cost of school fees, which is line with the consistent use of that policy to meet school fees. On the US military exemption, the VAT rule applies to all businesses supplying services to US forces, so there has been no change in that regard." Responding, Baroness Smith of Newnham said "although there may not have been a change in the relationship with the United States, there has been an impact on His Majesty's Armed Forces". She added: "Such children are being sent to private school not through the parental choice that might be made in the civilian sector, but to ensure they can have a secure education while their parents are serving. The cost of education has just gone up through VAT. Is that not a problem? Could the MoD not talk to the Treasury about it?" Lord Coaker then referenced the uplift to the CEA, which he said aligns with Labour's support policy. Hansard.