VAT: Colleges and Schools

Baroness Butler-Sloss Excerpts

Monday 23rd February 2015 Lords Chamber

[Baroness Garden of Frognal]

If we extend the scheme to the sixth-form colleges that are charities it would make it much more difficult for the Government to justify not providing similar systems for other charities. According to the Treasury, providing a VAT refund to all charities in this way would simply not be affordable at the current time.

[Baroness Butler-Sloss (CB)]

There is an injustice here. We are talking about children aged up to 18 and then, of course, those in early adulthood, who are being treated in a different way from other children going through the same educational process. I find it difficult to understand why we are talking about a level playing field at some future stage, when here is an injustice at this moment.

[Baroness Garden of Frognal]

As I said, the categorisation of sixth-form colleges was a matter for the Office for National Statistics, which categorised them as private sector organisations, hence the different approach to funding. In spite of the fact that the colleges cannot reclaim VAT, they have other benefits from being in the private sector: for instance, they can borrow and provide other ways of raising money to keep their provision going.