Igniting debate across political lines, Labour has promised to remove the VAT exemption for private schools in the upcoming general election. In the UK, the independent education sector encompasses approximately 5.9% of all school children, with 6.5% in England.
Looking closer at the numbers, the average cost of public schooling across the UK is about £15,000, according to this BBC article, and are VAT exempt because of a legal exemption for organisations providing education currently in place.
Labour leader, Sir Keir Starmer, believes that the current exemption from VAT which private schools enjoy was an ‘unfair tax break’, proposing instead to use the resulting tax revenue to improve standards in state schools. If this policy does come into force, what might this mean for tutoring companies and for the education sector as a whole?
Concerns From Critics
Conservatives and other critics largely argue that such policies penalise aspirational parents and overlook families who are barely able to afford private education. This same argument, critics argue, applies also to parents who need specialised schooling for their children. Private school fees have already increased by 8% due to inflation and rising costs. and a significant drop in private school enrolment could jeopardise smaller institutions catering to students with niche learning requirements.
Indeed, some schools might counter costs by recovering VAT on other expenses or using reserves, but the ultimate result could mean reductions in bursaries and outreach programs. In fact, about half of England's private schools are also charities, so receive an 80% reduction on business rates.
A Brighter Future For State-funded Schools
On the other hand, Labour emphasises state school enhancement as a result of this policy. The Institute for Fiscal Studies (IFS) has said that roughly £1.5bn a year would be generated as a result which Labour has pledged to use to pay for 6,500 more teachers – one of its key election pledges.
Labour purports that “this funding will also help pay for mental health support staff in every school, working to boost the wellbeing of young people, many of whom are still suffering the effects of lockdown.” Other supporters also state that tax breaks independent schools already receive are a “largely hidden public subsidy to a sector already significantly better funded than state schools”.
Boom in Tuition Ahead?
Taking both sides into consideration, the imposition of VAT on private school fees could drive demand for private tuition. As the financial burden of traditional private schooling rises, some families may no longer afford traditional private schooling, especially if there is a large impact on bursaries and discounted arrangements. These same parents who value personalised attention and tailored learning experiences might find private tuition a more feasible alternative.
With potential changes in school funding and educational disruptions for those already enrolled in public schools on the horizon, some parents might opt for private tuition to ensure continuity and stability in their children's learning.
Others might seek tutors who specialise in school entry, but aim for local grammar schools rather than costlier establishments.
Private tutors offer flexible, individualized instruction tailored to specific needs, providing reassurance to parents worried about education quality in both private and state schools amidst policy changes. The diverse range of private tuition options, like those on offer here at Titanium Tutors, allows parents to choose the best approach for their child's learning style and preferences.
Whether seeking specialized instruction in subjects like mathematics or languages or support for entrance exams and standardized testing, private tutors offer customizable educational experiences. This flexibility and personalized attention appeal to parents prioritizing academic excellence and investing in their children's future success, regardless of external factors affecting the broader educational landscape.
Looking to the Future
Interestingly, one article from The Guardian proposes an alternative solution: to scrap the plans, and instead introduce an opt-in or opt-out proposal whereby schools can choose instead to use the money for bursaries and increase intake for lower-income children.
No matter where you stand politically, this proposal sparks intense debate and uncertainty for families navigating educational choices. The potential impact on educational equality, school funding and long-term outcomes certainly adds layers of complexity to this discussion.
So what is your view on this divisive policy?
Blog Post Crafted by Cheryl
Cheryl manages our Admin Team, and is a qualified teacher with 5 years' experience in schools across England and Canada.
Cheryl graduated from University of Toronto with a Bachelor of Education. She tutored secondary school students in English for over nine years in Canada.
Cheryl speaks Cantonese, English and French, and in her spare time, she can be found illustrating and reading children’s books for inspiration.
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