Independent Schools: VAT and Business Rates Exemptions

Caroline Voaden Excerpts

Tuesday 8th October 2024 Westminster Hall

[Caroline Voaden (South Devon) (LD)]

My constituency of South Devon is home to several small independent schools that offer an alternative education from the mainstream offer from state schools: education that caters brilliantly for pupils who struggle to fit in with the demands of the mainstream curriculum. I have heard from several parents whose children could not cope in state schools—they live with autism or other mental health challenges—but are thriving in those small private settings. These small independent schools, whose fees are as low as they can make them, offer smaller class sizes, fewer class transitions during the day and more emphasis on wellbeing and creativity.

The parents who have contacted me in desperation over this proposed change are not wealthy. They are scraping together the fees so that their children can attend a school where they can thrive. One told me that she had sold her house and given away the family pet in order to move into a flat. She changed job to be able to afford the fees, and she now buys everything second hand. Another said that they had also sold their home and moved house to afford the fees at their local Steiner school as their children had also failed to cope with mainstream schooling.

The introduction of VAT on private school fees may not have much impact on parents who can afford £50,000 a year for a child. However, one school in my constituency, whose fees are just £10,000, said that it will face closure if it loses just four more children from its roll. All those small schools are trying to absorb as much of the cost as possible, with teachers taking salary cuts and much-needed building repairs being put on hold indefinitely. Will the Minister think about the impact the tax will have on the children who cannot get an EHCP? They cannot cope with the rigours of the state school system and they will quite probably end up dropping out of school completely if this goes ahead, with all the implication that has on working parents who then may have to consider homeschooling instead. I urge the Minister to think about a lower fee threshold for the introduction of VAT. After all, those parents are already paying income tax to cover an education that their children do not receive.

[Helen Maguire (Epsom and Ewell) (LD)]

My hon. Friend raises a good point, and I was glad to hear that Labour is giving consideration to cases in which independent school provision has been specified in education, health and care plans. However, as has already been raised, many children have special educational needs and do not require an EHCP; that means that many children with SEN are currently being educated in independent schools as there is insufficient support in the state school system. As such, the families are having to bear the fee increase. Does my hon. Friend agree that the Government must ensure that those vulnerable children are not disadvantaged by this policy?

[Caroline Voaden]

I absolutely agree with my hon. Friend that those children are going to be most affected by this policy. For those families, the tax change is a regressive step that will force them into an impossible situation and have a devastating impact on children who have already had a difficult start in life—many of whom have experience of the care system, our failing mental health system and a state school system completely unable to cope with all their additional or complex needs. Yes, the state school system desperately needs investment—we know that. We know that the provision for SEND is in a disastrous state, nowhere more so than in Devon, and the chronic underfunding of councils by the previous Government has decimated SEND provision.

[Mr Gideon Amos (Taunton and Wellington) (LD)]

I congratulate the hon. Member for Bromsgrove (Bradley Thomas) on securing this important debate. In my constituency, Taunton school, Wellington school, King’s college and Queen’s college make a massive contribution to the local economy. Beyond that, they also cater for many children with special educational needs and disabilities.

Does my hon. Friend agree that the Minister should consider resources for local authorities to cope with the wave of applications for support from SEND children currently being supported in independent schools? They are not applying for EHCPs now but will doubtless need to in future, if they are no longer able to get the care and support they need at their schools. Does she also agree that the Minister should secure a rise in the armed forces allowance to cope with the 20% increase?

[Caroline Voaden]

It is interesting that nobody is here from the Department for Education to defend the policy and that we have heard nothing about the contribution it will make to increasing SEND provision in state schools. I certainly know that the state schools in my area cannot cope with any additional need, and we have heard nothing about that. Dare I say that the Liberal Democrats had several suggestions for tax-raising options in our election manifesto that do not seem to have been considered yet by this Government? I humbly suggest that a tax on social media companies might be a good place to start, given the impact that they have on the mental health of our young people.

I implore the Minister to rethink how the VAT policy will damage families who have tried so hard to find the right setting so that their children can thrive. If he would like to come to South Devon and see for himself what some of these brilliant schools offer, I will be delighted to show him around.