VAT: Independent Schools

Ben Spencer Excerpts

Tuesday 8th October 2024 Commons Chamber

[James Murray]

I have given way quite a lot, so I am going to make a bit of progress.

Alongside the announcements about VAT, the Government announced in July that private schools in England with charitable status would lose their eligibility for business rates charitable relief from April 2025, subject to parliamentary passage of the legislation. Those changes were set out in a technical note that was published online alongside draft VAT legislation, which together formed a technical consultation. As part of that consultation, the Government—both at official and ministerial level—have engaged with a broad range of stakeholders, including the devolved Governments.

We have listened carefully to the points that people have raised with us. We recognise that while this policy will raise revenue to help support improvements in the state education sector, it may lead to increased costs for some parents and carers whose children are in the private education system. However, let me be clear: while private schools will now be required to charge VAT on the education services and vocational training they provide, we expect that most private schools will be able to absorb a significant portion of this new VAT charge and keep fee increases affordable for most parents. They will be able to make efficiencies and recover the VAT they incur on the things they buy. Those recovered costs can be used to offset increases for fee payers. We are already seeing that some schools have committed to absorbing the VAT liability entirely, while others are choosing to cap fee increases at 5% or 10% to keep fees as low as possible for parents.

[Dr Ben Spencer (Runnymede and Weybridge) (Con)]

I had a pop at getting the Minister to give way during the debate this morning, and I appreciate his doing so now. I love the irony of what he is saying, which is, “We need to do this to raise all this money, yet it isn’t actually going to raise all that much money because it can be reclaimed.” On the impact assessment, it is really interesting that one line in the consultation document that went out this summer says:

“The government understands that moving schools can be challenging.”

How many of his own constituents have contacted him to say they will have to move schools as a result of this policy, and how do we measure the damage that moving schools is going to cause for so many children in our constituencies?

--- Later in debate ---

[Dr Ben Spencer (Runnymede and Weybridge) (Con)]

Families and schools in my constituency are deeply concerned about this policy. They have contacted me to underline the pressure that it will put on them. Many have already started applying for state school places. Our independent schools reckon that about 5% to 10% of their students will move into the state sector. As we have heard, the measure will have a disproportionate impact on kids with SEND.

In my constituency, roughly 8,000 children are educated in the independent sector. That means a lot of pressure on local state schools. A lot of kids who have their special educational needs met by independent schools are now applying for EHCPs, which means extra pressure on assessments and provision. I support all my schools; I am aspirational for all the children in my constituency. This policy, if enacted—as I expect it will be—will cause great harm.

I would like the Minister to be able to quote back data, analyses and stats to me, and to say, “Ben, you’re wrong. Don’t worry your silly little head—it’s all going to be fine, and here is the data to back it up.” But he cannot; the data is not there because the Government have not done the analysis. This debate has, sadly, been driven by ideology. About one in five children are educated at independent schools in my patch. I must declare that I have chosen independent education for my children.

We will really suffer from this policy. The Under-Secretary of State for Education, the hon. Member for Portsmouth South (Stephen Morgan), is a good man. I know that Members across the House, especially new Members who are finding their feet in this place, are starting to think about policies and decisions going forward. I say to them, as I said to the Minister: “If you cannot see the data and analysis for this policy, please ask why.” Please ask for it.

[Mr Richard Quigley (Isle of Wight West) (Lab)]

Listening to the Conservatives and the amount of fearmongering they do, one might think that a previous Government had totally trashed the state sector; I think that is quite obvious.

[Dr Spencer]

As I said, schools in both the independent and state sectors are concerned about the policy and the sudden movement of children, in the middle of the year, into the state sector, which will struggle to find them places. Those children may be studying for exams and have already experienced covid disruption, and the state schools that they move to might not have the right courses. I plead with the Minister to look at the data and do the analysis to see if the policy will make money or lose it, and to consider the impact on children.

I go back to the brutal, bitter words of the consultation document that went out this summer:

“The government understands that moving schools can be challenging.”

If I were a child going through my GCSEs or A-levels, and was forced to move into the state sector because of this policy—the analysis of which I cannot see, because the Government have not done it or will not publish it—and I read those words, I would say, “Please delay this policy. Think again. Look at it, and try to mitigate the impact on children with special educational needs, on armed forces families, and of disruption during the school year. Please, if you are not going to stop it, at least delay it and do the working out.”