All the talk in our sector at the moment is about the possible (or probable?) imposition of VAT on schools.
In their report published today, the Institute for Fiscal Studies (IFS) says that “Our view is that it would be reasonable to assume a range of somewhere between a 3pc and 7pc fall in private school attendance – or about 20,000-40,000 pupils – as a result of a 15pc effective VAT rate.”
A 3pc – 7pc fall doesn’t seem much, but let’s consider the implications. Many of the worst affected families will be those living in rural areas or out of large cities, where independent schools are recruiting, as opposed to selecting, fighting for every pupil to maintain numbers.
Small independent schools are often a haven to those children who would sink in large classes found in the maintained school up the road. Not everyone can cope in a group of 30+ where individual support is lacking and we often pick up children who are floundering in their bigger neighbours. Those children are invariably from hard-working, making huge sacrifices to educate their offspring.
With the pinch on hard-pressed parents due to the cost of living, an increase in school fees will see more requests for bursary support to maintain places in smaller schools, challenging these schools’ finances further. In previous recessions many schools had to increase the level of financial assistance to keep numbers up, a number realising too late that action such as that was the beginning of the end.
In my travels around the country over the last few years, advising schools, it was worrying to see the level of financial support to parents rising without consideration of the implications. In one case the average day fee received was barely half that of the full day fee. That school is no longer with us.
It is not only school leadership that should be mindful of this, but the governors need to keep a firm control on the level of support given. In difficult times the reporting frequency to trustees should be increased and information provided challenged robustly for the sake of all involved.
As an independent school Bursar with many years of experience, the latest attack on our schools leaves one with a weary acceptance that the sector is likely to have another large chunk chipped off it. In my 35 years in the job I have seen the disappearance of the Assisted Places Scheme, additional reporting requirements under charity law, hikes in Teachers’ Pension contributions, recessions and now the threat of VAT – and this does not even scratch the surface of the impact of Covid on us, particularly for those schools recruiting from overseas. The damage will take a long time to repair. More schools will close or if they do survive will join larger groups or be bought by overseas investors.
There is no doubt that inward investment can be a hugely positive thing
The only guaranteed result will be that more smaller, impressive independent schools, providing a brilliant education at a fraction of the cost of the big boys, will go to the wall. Perhaps Sir Keir Starmer or Bridget Phillipson will come to stand in front of the staff, pupils and parents at those schools when the closure announcement is made?
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