Independent School Fees: VAT

Baroness Bull Excerpts

Thursday 13th March 2025 Lords Chamber

[Lord Livermore (Lab)]

I am grateful to the noble Lord for his question, and I pay tribute to his involvement in this sector. As he will know, probably better than me, there has historically been a significant turnover within the private school sector, with around 3% of private schools—roughly 75 in the UK—opening and closing each year, with the overall number of private schools remaining stable. Since this policy was announced in July, private schools have continued to open in England in line with historic trends.

[Baroness Bull (CB)]

My Lords, I thank the Minister and the Government for their recognition of the unique role that the Music and Dance Scheme schools play in enabling talented young dancers and musicians to pursue their dreams, whatever their background. Is the Minister aware of the recent demonstration of the success of that scheme in the outstanding achievements of Jakob Wheway Hughes, who is a student on the scheme at Tring Park School for the Performing Arts? He won not one but three of the prizes at the prestigious international ballet competition, the Prix de Lausanne. Will the Minister join me not only in congratulating Jakob on his success but in noting the role that the Music and Dance Scheme has played in achieving that success?

[Lord Livermore (Lab)]

I am grateful to the noble Baroness for her question. Of course, I will join her in congratulating Jakob. As she knows far better than I do, the Music and Dance Scheme provides grants and help with fees at eight schools and 20 centres for advanced training. The Department for Education has decided to adjust its Music and Dance Scheme bursary contribution for families with a relevant income below £45,000 a year to account for the VAT that will be applied to fees, ensuring that the total parental fee contribution for families with below-average relevant incomes remains unchanged for the rest of this academic year.

Autumn Budget 2024

Baroness Bull Excerpts

Monday 11th November 2024 Lords Chamber

[Baroness Bull (CB)]

My Lords, I want to start by welcoming measures in the Budget that support the vulnerable in our society—those on lower incomes, those with special needs or disabilities, carers, and households facing hardship—as well as the investment in the NHS. I also welcome additional support for local authorities, which will help them meet ever-growing demand and may, I hope, enable them to reinstate funding for local arts and culture. As we have heard, so many were forced to reduce and even cut it as pressure on statutory services increased.

I intend to focus on the Budget’s impact on the cultural and creative industries and I note my interests as set out in the register. The industrial strategy Green Paper named the creative industries among eight growth sectors. But the term “creative industries” encompasses multiple subsectors and this Budget is largely targeted at those perceived to have greatest potential for growth. There is a new tax relief for visual effects, £3 million for promoting creative careers and the continuation of tax relief for film, high-end TV, animation and video games.

There was some good news for other parts of the sector, with a renewed commitment to tax relief for orchestras, theatres, museums and galleries, and even higher rates of relief from next year. National museums and galleries won increases in both grant in aid and capital funding, but there was no parallel support for local authority-funded museums and galleries, many of which face closure through lack of funds.

By and large, the package of support for the creative industries does not provide the same relief for arts and culture as it does for those subsectors described as “growth driving”. Documents published alongside the Budget revealed that £100 million of local cultural projects allocated funding through the levelling-up fund will likely be scrapped, with spend “reprioritised towards growth”. The UK shared prosperity fund, established to offset the loss of valuable EU place-based funds, will reduce from £1.5 billion to £900 million next year and then be phased out completely.

Of course, difficult choices had to be made, but this is notably at odds with the emphasis of the DCMS Secretary of State on place and the regional agenda, both in the content of her sector speeches and the locations she has chosen to deliver them. Last week, she wrote that

“for millions of people, geography has become destiny … This Budget has put the Creative Industries front and centre of how we write those people back into our national story and drive opportunity, jobs and prosperity into every community, in every region”.

That is a great ambition, but it will be achieved only if investment takes into account the complex interdependencies between the creative industries’ subsectors and the role of arts and culture in nurturing the creativity that underpins the ecosystem as a whole. The Budget overlooks this. It also overlooks the contribution of cultural organisations to local infrastructure and their importance in multiagency place-based partnerships that help raise aspirations, build skills, generate growth and create liveable places in which people can have pride.

Arts and culture have so much to contribute to the growth and opportunities mission, but it is a sector that has been underfunded over the last decade and is struggling to recover from the crises of the last five years. Increases to employer NIC and the minimum wage will pile more pressure on organisations already operating on the edge. Job reductions and scaled-back services will surely follow.

Some 7,500 charities, cultural and voluntary organisations have written to the Chancellor calling for exemption from the increase in employer NIC. They are essential partners in the delivery of public services, yet they will not enjoy the same exemption as public sector bodies. Independent trusts that spun out from local authority control over the last decade to ensure continued provision of services in the face of council cuts, will pay the increased rate, while the same services that remained in the public sector will not.

I conclude by asking the Minister two questions. Have the Government undertaken an impact assessment of the increase in employer national insurance contributions on these organisations and the communities they support? Will the Government commit to working with the ACEVO and NCVO to reduce the burden on their members at a time when their contribution to public services is needed more than ever?

School Fees: VAT

Baroness Bull Excerpts

Thursday 10th October 2024 Lords Chamber

[Lord Livermore (Lab)]

I am grateful to my noble friend for making those points, and I agree with what she said. The Government are committed to breaking down barriers to opportunity. We are determined to drive up standards in schools serving the overwhelming majority of children in this country, so that they may receive the opportunities that too often have been the preserve of the rich and the lucky.

[Baroness Bull (CB)]

My Lords, can the Minister reassure the House that the new VAT measures will not damage the UK’s ability to produce world-leading performers in music and dance? He may not know that for exceptional talent to succeed on the global stage it needs to enter professional training at a very young age and at a level of intensity that the state sector cannot provide. These schools are far from the independent schools stereotype. They do not have large endowments or wealthy parent bodies, and they recruit entirely on talent, regardless of ability to pay. Can the Government ensure that the new measures do not create a scenario in which only the most advantaged children can have the opportunities that their talent deserves?

[Lord Livermore (Lab)]

I am very grateful for the noble Baroness’s insight and expertise on this matter. In answer to her question, that is absolutely what we will seek. As she knows, where parents are paying fees for their child to attend a private music or dance school they will pay VAT on those fees following this change. The music and dance scheme funds talented pupils from low-income families to attend such specialist schools, and we will monitor closely any impact of these policy changes and consider any changes to this scheme at the forthcoming spending review.