VAT change is existential threat to private schools

The headteacher of one in every of Edinburgh’s greatest private schools has labelled the UK authorities’s plans to levy VAT on college charges an “ideological” coverage that is an existential threat for some schools within the sector.

Anthony Simpson informed BBC Scotland News there is “absolute fear” from dad and mom about price will increase as soon as the adjustments take impact subsequent 12 months.

The Chancellor, Rachel Reeves, is anticipated to define the plans in her funds on Wednesday.

The UK Government has stated that the coverage will elevate extra money for training “so every child gets the best start in life.”

As principal of Erskine Stewart’s Melville School (ESMS), Anthony Simpson oversees each the Mary Erskine college for women and Stewart’s Melville College for boys.

When it comes to schools he is seen all of it – from instructing maths in boarding schools, to operating inside metropolis comprehensives in England.

But he’s deeply involved about looming VAT adjustments.

The college head warns that he’s already detecting a drop off in college students beginning at his schools, and potential pupils are actually heading in direction of a state sector the place “there aren’t any spaces.”

Sitting in an empty language class at one of many college’s campuses, he tells me “it’s not even VAT, it’s the fear of VAT being imposed that’s been the impact on us so far.”

ESMS try to preserve future charges down by merging the ladies and boys schools in 2026, however he believes that different unbiased schools could have to shut because of the coverage.

VAT is a tax of 20% included on most items and companies we buy. It makes up a major chunk of the UK Government’s revenues.

But Anthony Simpson bristles on the thought of training dealing with this tax.

“I’ve never thought of what I’m doing as a product. I’ve thought of it as trying to help society.”

City of Edinburgh council contests the suggestion that there is no area for pupils within the authority’s state schools.

It says over 9,300 nursery, main and secondary pupils residing in Edinburgh attend private or unbiased schools.

A spokesperson stated: “Our latest projections show we have capacity for a further 12,700 pupils in our schools, but we’ll continue to keep this under review.”

The Institute for Fiscal Studies (IFS) thinktank believes the VAT policy could raise around £1.5bn. UK ministers want to use this revenue to fund extra teachers in England.

Education is devolved, so this would trigger extra money for the Scottish government to spend.

But is this a policy that will lead to a significant drop off in pupils attending private school? The IFS doesn’t think so.

They’ve previously said that three quarters of children at private school come from families in the wealthiest 30% of households.

The thinktank predicts a reduction of somewhere between 3% and 7% as a result of the UK Government’s VAT change.

Regardless of the numbers, it still doesn’t sit right for Anthony Simpson.

“We’re nonetheless essentially coping with kids, and we’re nonetheless essentially coping with dad and mom who’re doing all they will to do the perfect for his or her little one. It’s a tax on these folks.”

And there are plenty of parents who agree.

Jane Gilchrist has two daughters attending a private school in Edinburgh. They were originally at a state primary, but she chose to make a switch after both showed signs of dyslexia.

More support was then on hand – a class size of 31 in the state sector became a class size of 12.

She’s somewhat conflicted on the issue of school fees. She comes from a “left-wing household” and says there are “legitimate arguments” that private education should face VAT.

She acknowledges that she’s in a privileged position to be able to choose to pay for her daughters’ education.

But Jane also pushes back against the idea that parents who opt for private education have “infinite” income and can automatically absorb increased costs.

Her family’s now facing around £8,000 extra a year in fees.

Her two daughters are taking their GCSEs over the next 18 months, which is an added complication – they’ve not studied the curriculum for the National 5s they’d be sitting if they moved to the state sector.

She says she’ll find the money. But spending will have to be cut on other outgoings. She argues that this means the Treasury lose out on VAT elsewhere. “The cash cannot be spent twice”, she explains.

Jane would like to see the VAT introduction tapered to make it easier for families to “take up the change”, rather than introduced in the middle of the school year.

But there are those who think this is a sensible policy – one that principally sees wealthier families pay more in order to help fund education for all.

Barry Black is an education researcher at the University of Glasgow. He’s also a member of the Labour Party.

He’s supportive of the change, saying that there’s a “desperate need” for more resources in state education.

He’d like to see any money raised used to protect teacher numbers and ensure that there’s sufficient support for pupils with additional needs.

For him, it’s a tweak to the tax system which would see the most affluent families funding “a extra equitable training system for all.”

They may provide education, but he says that private schools are “companies who’re defending their backside line”, and he believes the time has come for them to face a similar tax regime to other firms.

It’s a sentiment largely shared by the UK Government, who have said that “ending tax breaks on private schools will raise revenue” that can ensure that “every child gets the best start in life.”

Polls have previously suggested it’s – broadly speaking – quite a popular policy.

But for some dad and mom, and academics, it’s one that can lead to a major – and sudden – rise in prices.