VAT on private schools is excellent wedge politics from Labour. Significantly better than any of the stuff the Conservatives have tried.
For most people, private schools = that black and white Johnson/Cameron photo. And it links in beautifully with the helicoptered Sunak.
Yes. It works on multiple levels. If it doesn't lead to a drop in private school numbers, good because it raises money to channel to the underfunded state sector. If it does lead to a drop, also good because it's about discouraging the affluent from forming their own educational 'gated community' outside of the mainstream. Either which way it can be presented with a straight face as a win.
In addition it's a policy that: (i) Pleases the left. (ii) Polls well amongst target voters in target seats, esp the Red Wall. (iii) Is both eyecatching and affordable.
Policies that tick all those boxes are very very hard to come up with. This one does it. It's a star.
Given the enthusiasm and joy with which various local authorities are proud of 98% occupancy in schools, what do you think will happen when there is demand for more places?
Indeed. But we are dealing with the DfE here. The policy of running at 98% occupancy of places is already insane. What makes you think that their response to falling pupils numbers (or rising pupil numbers) will be any less insane?
And there is a link back to the header there. If something apparently insane or self-harming is going on, the question is what on the mental map is causing it?
In the case of schools, it's a couple of things. One is that money follows pupils so directly- so having an empty seat in 9C is about seven grand forgone. And that's in an environment where most of the costs are fixed. Hence the bizarre phenomenon of schools advertising on the back of London buses- you don't need many responses for it to be worth it. (And if you don't, you risk losing out big time to your rivals.)
Second, even 100 percent occupancy doesn't comfortably pay the bills right now. Once you fall to ninety or eighty, your budget is screwed (this was an ongoing nightmare at the place I governed for a while.) Coupled with parent choice dynamics, what you usually get is four schools in a town full (or overfull) with all the spare places at the fifth, doomed school.
Obviously, the DfE are useless pinheads, but this one isn't their fault.
The DfE are part of the stupid system.
Operational Research tells us that an organisation or system running at such levels of utilisation will have quality failures, morale failures, loss of key staff and generally will stagger along in a fucked up state. With occasional disasters to liven the mix.
Strangely, teachers report….
Oh, absolutely.
But one of the uncomfortable realities for anyone on the right (even the dripping wet, "Starmer is a better approximation than Sunak" types like me) is that individuals acting rationally can add up to a collectively bad solution. And that has happened for parental preference in schools.
I don't see any government being willing to find meaningful spare capacity in schools, or any parent being willing to be fobbed off with "yes, that may look like an empty space at St Ofsted's, but it isn't really vacant so Tallulah can't have it."
Maybe we should end consumer preference in supermarkets and nationalise into one regulated one with managed spare capacity instead.
Individuals acting rationally can add up to a collectively bad solution.
Of course not.
Leaving aside the horses for courses argument (you can open and close supermarkets much more quickly than you can schools, so the invisible hand can operate better), I am not saying that we shouldn't have parental preference... Just that it inevitably leads to what we have. Most schools full to capacity and a handful of schools with all the empty places. Which creates its own problems.
But one of the things free marketeers hoped for was that popular schools would expand to meet parental demand. In general, that hasn't happened. Even in the private sector, most heads would rather run their school as it is than try to make it bigger. Both the finances and the staff management are off-putting.
Peripherally on education: the Times today has its list of the top 500 primary schools. Obviously the article is paywalled, so I considered buying a copy. It's £3.50 for a copy of the Times now! I was flabbergasted. Like some sort of millenial, I then went and spent twice that on a coffee and a bun, which I consumed sitting in the sun, a very pleasant experience which lasted 15 minutes, rathet thanthe couple of hours of so that a newspaper would have given me. But I have been conditioned to expect content for free and I'm not sure there is any going back now. Anyway - my mother in law, who has a subscription, read the article and told me the detail I was interested in*. I'm not sure what, if anything, this anecdote illustrates about the nature of news in the current age.
*which was that of the top 500 primary schools, by whatever methodology the Times applies, 8 are in my home town of Sale. Which given that roughly 1 in 1000 Brits live in Sale is something like 15 times more than one would expect by random chance. More, if you also think that as an urban area we have larger schools and therefore fewer per capita.
Can someone explain to me why Israel is 2nd favourite for Eurovision at 3/1?
As I understand it from the little bits of reading I have done, there were some purported voting leaks which suggested they got the most votes from the semifinals. This appears to have caused apoplexy in certain quarters, and now the whole thing is collapsing in on itself with what I understand is an unrelated issue with the Dutch contestant.
Education is crying out for a technological solution. Close the schools and put the budget into producing world class content that can be made available over the internet to all British children.
Isn't that Lockdown Learning, only for ever and ever? Even if the content can be produced (and I've done some of that), there are a billion other things that only work if you have a group of young people in a room with a trained adult.
Besides, pretty much every parent in the land would hate a government who tried that with the fury of a thousand... What's that bright thing in the sky today?
More Scots say they broadly agree with JK Rowling over transgender issues than disagree, a new poll for The Scotsman has found.
The poll by Savanta found 41 per cent of respondents said they tended to agree with the author's views more than they disagreed, while 23 per cent said the opposite.
What are the chances of Biden getting any credit for this in Texas ?
Incredible: 50 cranes at work on Samsung's $17 billion Texas chip plant. One building alone is 11 football fields long and needs 5,000 construction workers. The plant will do cutting-edge chips and advanced packaging for HBM.
Started early 2022. Expected to open in 2024 or 2025.
To the credit of the Chips Act team, they didn't just give all the funding to Intel as the leading US chipmaker. They wisely spread out their bet across all the top foreign chipmakers... https://twitter.com/kyleichan/status/1789262557716299802
VAT on private schools is excellent wedge politics from Labour. Significantly better than any of the stuff the Conservatives have tried.
For most people, private schools = that black and white Johnson/Cameron photo. And it links in beautifully with the helicoptered Sunak.
Yes. It works on multiple levels. If it doesn't lead to a drop in private school numbers, good because it raises money to channel to the underfunded state sector. If it does lead to a drop, also good because it's about discouraging the affluent from forming their own educational 'gated community' outside of the mainstream. Either which way it can be presented with a straight face as a win.
In addition it's a policy that: (i) Pleases the left. (ii) Polls well amongst target voters in target seats, esp the Red Wall. (iii) Is both eyecatching and affordable.
Policies that tick all those boxes are very very hard to come up with. This one does it. It's a star.
Given the enthusiasm and joy with which various local authorities are proud of 98% occupancy in schools, what do you think will happen when there is demand for more places?
We'll see, won't we. Pointless speculating.
No, it isn’t pointless. Because policies have effects. Thinking about the effects before they happen is part of planning.
Given the number of politicians that read PB, they need to start thinking about the possible outcomes
1) not much change in the disposition of pupils. 2) a big move to state education - *in certain areas*. As in, say a resumption/increase in the move if the middle classes out of the city into the sticks.
If 2) happens, then a bunch of middle class people will show up in various areas, trying to get their kids into the Good Comprehensives/Free Schools. If you actually read up on some of the effects of this kind of thing, guess who gets pushed back?
Yes, the Process State is much easier to navigate for those with education (ha) and resources to move through and round The System.
Of course (!) the practical short-term impact of the policy should be considered. I'd hope SKS and team are doing that. Are you suggesting they aren't? What's your evidence for this? Just because we've had BoJo and Truss doesn't mean they're all rank incompetents in SW1. Least I really hope not. We may as well give up if so.
No, Malmers, that is not pointless, that is planning. Fail to prepare, prepare to fail etc. What I meant is pointless is me trying to field detailed questions from you on exactly how this policy will pan out. Esp when you've already decided what the answer is (which I think you have). Apols if I'm wrong but that's my sense of it. You (like many) dislike the policy on gutfeel and seek to find nitpicky ways it might backfire. That's the sequence.
I wonder, speaking of reading up on things, have you ever come across the technique of pretending to oppose something on purely pragmatic grounds that in truth you oppose on principle? It's so common that it ought to have a name. I bet it does actually.
I don’t especially approve or disapprove of the policy, as it happens.
You frequently seem to think that policies with “their heart in the right place” are better. Just because.
Failure to understand that even the best intentions and actions can have negative consequences is common.
Nor is recognising those problems is not to attack the good intentions. Or even the policies themselves.
The current issues with shop lifting are, for example, nearly entirely the result of a series of changes, each one of which is a good thing. In the liberal democratic sense.
Going back to a world where shop assistants were pressured by the employers into physical altercations with thieves followed by a “passage a tabac” for the shoplifter and then The Old Bill collecting them from impromptu imprisonment in a closet is not a good idea.
VAT on private schools is excellent wedge politics from Labour. Significantly better than any of the stuff the Conservatives have tried.
For most people, private schools = that black and white Johnson/Cameron photo. And it links in beautifully with the helicoptered Sunak.
Yes. It works on multiple levels. If it doesn't lead to a drop in private school numbers, good because it raises money to channel to the underfunded state sector. If it does lead to a drop, also good because it's about discouraging the affluent from forming their own educational 'gated community' outside of the mainstream. Either which way it can be presented with a straight face as a win.
In addition it's a policy that: (i) Pleases the left. (ii) Polls well amongst target voters in target seats, esp the Red Wall. (iii) Is both eyecatching and affordable.
Policies that tick all those boxes are very very hard to come up with. This one does it. It's a star.
Given the enthusiasm and joy with which various local authorities are proud of 98% occupancy in schools, what do you think will happen when there is demand for more places?
Indeed. But we are dealing with the DfE here. The policy of running at 98% occupancy of places is already insane. What makes you think that their response to falling pupils numbers (or rising pupil numbers) will be any less insane?
And there is a link back to the header there. If something apparently insane or self-harming is going on, the question is what on the mental map is causing it?
In the case of schools, it's a couple of things. One is that money follows pupils so directly- so having an empty seat in 9C is about seven grand forgone. And that's in an environment where most of the costs are fixed. Hence the bizarre phenomenon of schools advertising on the back of London buses- you don't need many responses for it to be worth it. (And if you don't, you risk losing out big time to your rivals.)
Second, even 100 percent occupancy doesn't comfortably pay the bills right now. Once you fall to ninety or eighty, your budget is screwed (this was an ongoing nightmare at the place I governed for a while.) Coupled with parent choice dynamics, what you usually get is four schools in a town full (or overfull) with all the spare places at the fifth, doomed school.
Obviously, the DfE are useless pinheads, but this one isn't their fault.
The DfE are part of the stupid system.
Operational Research tells us that an organisation or system running at such levels of utilisation will have quality failures, morale failures, loss of key staff and generally will stagger along in a fucked up state. With occasional disasters to liven the mix.
Strangely, teachers report….
Oh, absolutely.
But one of the uncomfortable realities for anyone on the right (even the dripping wet, "Starmer is a better approximation than Sunak" types like me) is that individuals acting rationally can add up to a collectively bad solution. And that has happened for parental preference in schools.
I don't see any government being willing to find meaningful spare capacity in schools, or any parent being willing to be fobbed off with "yes, that may look like an empty space at St Ofsted's, but it isn't really vacant so Tallulah can't have it."
Maybe we should end consumer preference in supermarkets and nationalise into one regulated one with managed spare capacity instead.
Individuals acting rationally can add up to a collectively bad solution.
Of course not.
Leaving aside the horses for courses argument (you can open and close supermarkets much more quickly than you can schools, so the invisible hand can operate better), I am not saying that we shouldn't have parental preference... Just that it inevitably leads to what we have. Most schools full to capacity and a handful of schools with all the empty places. Which creates its own problems.
But one of the things free marketeers hoped for was that popular schools would expand to meet parental demand. In general, that hasn't happened. Even in the private sector, most heads would rather run their school as it is than try to make it bigger. Both the finances and the staff management are off-putting.
In fact our school expanded from 120/year intake to 150/year about five years ago, precisely to try to make the finances work.
Now we have to institute one-way systems on stairs etc and lateness to lessons has significantly increased because the school can't cope with the extra capacity 🫣.
It's a great idea in theory, but hasn't worked for us.
Education is crying out for a technological solution. Close the schools and put the budget into producing world class content that can be made available over the internet to all British children.
That’s a long and complicated way of saying “I don’t know anything about children.”
VAT on private schools is excellent wedge politics from Labour. Significantly better than any of the stuff the Conservatives have tried.
For most people, private schools = that black and white Johnson/Cameron photo. And it links in beautifully with the helicoptered Sunak.
Yes. It works on multiple levels. If it doesn't lead to a drop in private school numbers, good because it raises money to channel to the underfunded state sector. If it does lead to a drop, also good because it's about discouraging the affluent from forming their own educational 'gated community' outside of the mainstream. Either which way it can be presented with a straight face as a win.
In addition it's a policy that: (i) Pleases the left. (ii) Polls well amongst target voters in target seats, esp the Red Wall. (iii) Is both eyecatching and affordable.
Policies that tick all those boxes are very very hard to come up with. This one does it. It's a star.
Given the enthusiasm and joy with which various local authorities are proud of 98% occupancy in schools, what do you think will happen when there is demand for more places?
Indeed. But we are dealing with the DfE here. The policy of running at 98% occupancy of places is already insane. What makes you think that their response to falling pupils numbers (or rising pupil numbers) will be any less insane?
And there is a link back to the header there. If something apparently insane or self-harming is going on, the question is what on the mental map is causing it?
In the case of schools, it's a couple of things. One is that money follows pupils so directly- so having an empty seat in 9C is about seven grand forgone. And that's in an environment where most of the costs are fixed. Hence the bizarre phenomenon of schools advertising on the back of London buses- you don't need many responses for it to be worth it. (And if you don't, you risk losing out big time to your rivals.)
Second, even 100 percent occupancy doesn't comfortably pay the bills right now. Once you fall to ninety or eighty, your budget is screwed (this was an ongoing nightmare at the place I governed for a while.) Coupled with parent choice dynamics, what you usually get is four schools in a town full (or overfull) with all the spare places at the fifth, doomed school.
Obviously, the DfE are useless pinheads, but this one isn't their fault.
The DfE are part of the stupid system.
Operational Research tells us that an organisation or system running at such levels of utilisation will have quality failures, morale failures, loss of key staff and generally will stagger along in a fucked up state. With occasional disasters to liven the mix.
Strangely, teachers report….
Oh, absolutely.
But one of the uncomfortable realities for anyone on the right (even the dripping wet, "Starmer is a better approximation than Sunak" types like me) is that individuals acting rationally can add up to a collectively bad solution. And that has happened for parental preference in schools.
I don't see any government being willing to find meaningful spare capacity in schools, or any parent being willing to be fobbed off with "yes, that may look like an empty space at St Ofsted's, but it isn't really vacant so Tallulah can't have it."
Maybe we should end consumer preference in supermarkets and nationalise into one regulated one with managed spare capacity instead.
Individuals acting rationally can add up to a collectively bad solution.
Of course not.
Leaving aside the horses for courses argument (you can open and close supermarkets much more quickly than you can schools, so the invisible hand can operate better), I am not saying that we shouldn't have parental preference... Just that it inevitably leads to what we have. Most schools full to capacity and a handful of schools with all the empty places. Which creates its own problems.
But one of the things free marketeers hoped for was that popular schools would expand to meet parental demand. In general, that hasn't happened. Even in the private sector, most heads would rather run their school as it is than try to make it bigger. Both the finances and the staff management are off-putting.
In fact our school expanded from 120/year intake to 150/year about five years ago, precisely to try to make the finances work.
Now we have to institute one-way systems on stairs etc and lateness to lessons has significantly increased because the school can't cope with the extra capacity 🫣.
It's a great idea in theory, but hasn't worked for us.
It would probably work better if education was a genuinely for profit sector.
Education is crying out for a technological solution. Close the schools and put the budget into producing world class content that can be made available over the internet to all British children.
Ark and the DfE thought they did that through Oak National Academy.
VAT on private schools is excellent wedge politics from Labour. Significantly better than any of the stuff the Conservatives have tried.
For most people, private schools = that black and white Johnson/Cameron photo. And it links in beautifully with the helicoptered Sunak.
Yes. It works on multiple levels. If it doesn't lead to a drop in private school numbers, good because it raises money to channel to the underfunded state sector. If it does lead to a drop, also good because it's about discouraging the affluent from forming their own educational 'gated community' outside of the mainstream. Either which way it can be presented with a straight face as a win.
In addition it's a policy that: (i) Pleases the left. (ii) Polls well amongst target voters in target seats, esp the Red Wall. (iii) Is both eyecatching and affordable.
Policies that tick all those boxes are very very hard to come up with. This one does it. It's a star.
Given the enthusiasm and joy with which various local authorities are proud of 98% occupancy in schools, what do you think will happen when there is demand for more places?
Indeed. But we are dealing with the DfE here. The policy of running at 98% occupancy of places is already insane. What makes you think that their response to falling pupils numbers (or rising pupil numbers) will be any less insane?
And there is a link back to the header there. If something apparently insane or self-harming is going on, the question is what on the mental map is causing it?
In the case of schools, it's a couple of things. One is that money follows pupils so directly- so having an empty seat in 9C is about seven grand forgone. And that's in an environment where most of the costs are fixed. Hence the bizarre phenomenon of schools advertising on the back of London buses- you don't need many responses for it to be worth it. (And if you don't, you risk losing out big time to your rivals.)
Second, even 100 percent occupancy doesn't comfortably pay the bills right now. Once you fall to ninety or eighty, your budget is screwed (this was an ongoing nightmare at the place I governed for a while.) Coupled with parent choice dynamics, what you usually get is four schools in a town full (or overfull) with all the spare places at the fifth, doomed school.
Obviously, the DfE are useless pinheads, but this one isn't their fault.
The DfE are part of the stupid system.
Operational Research tells us that an organisation or system running at such levels of utilisation will have quality failures, morale failures, loss of key staff and generally will stagger along in a fucked up state. With occasional disasters to liven the mix.
Strangely, teachers report….
Oh, absolutely.
But one of the uncomfortable realities for anyone on the right (even the dripping wet, "Starmer is a better approximation than Sunak" types like me) is that individuals acting rationally can add up to a collectively bad solution. And that has happened for parental preference in schools.
I don't see any government being willing to find meaningful spare capacity in schools, or any parent being willing to be fobbed off with "yes, that may look like an empty space at St Ofsted's, but it isn't really vacant so Tallulah can't have it."
Maybe we should end consumer preference in supermarkets and nationalise into one regulated one with managed spare capacity instead.
Individuals acting rationally can add up to a collectively bad solution.
Of course not.
Leaving aside the horses for courses argument (you can open and close supermarkets much more quickly than you can schools, so the invisible hand can operate better), I am not saying that we shouldn't have parental preference... Just that it inevitably leads to what we have. Most schools full to capacity and a handful of schools with all the empty places. Which creates its own problems.
But one of the things free marketeers hoped for was that popular schools would expand to meet parental demand. In general, that hasn't happened. Even in the private sector, most heads would rather run their school as it is than try to make it bigger. Both the finances and the staff management are off-putting.
In fact our school expanded from 120/year intake to 150/year about five years ago, precisely to try to make the finances work.
Now we have to institute one-way systems on stairs etc and lateness to lessons has significantly increased because the school can't cope with the extra capacity 🫣.
It's a great idea in theory, but hasn't worked for us.
It would probably work better if education was a genuinely for profit sector.
Discuss.
@TSE has put forward some outline ideas on vouchers that would lead that way and might have been worth exploring.
But it will never happen. Too many powerful people whose jobs suddenly vanish would squeal.
Whether it will cost the country money is yet to be determined.
If you are right that it will cost the country money, do you think we should subsidise private school fees? If taxing them will cost the country money, presumably we can save the country money by subsidising them.
I don't see why not. Presumably there is a sweet spot somewhere on the spectrum from taxatiom to subsidy. I instinctively don't think it's in the direction of more taxation, and it seems unlikely that the sweet spot is neither taxation nor subsidy.
So, you would be OK with the state spending taxpayers’ money preferentially on the rich (i.e. those who can afford private school fees)?
What, like we do with, say, the Arts Council? I'd have no principled objections to that. But when I made the point I was more assuming the state paying bursaries (of, by implication, those who would otherwise not have access to private education i.e. those outside, what, the top 10% or so.)
The argument against VAT on private school fees is that you’ll drive students out of private schools and you’ll end up having to pay for their education through the state system. If that’s the case, then presumably a small subsidy would encourage parents to take kids out of the state system, saving the country more than the cost of the subsidy.
Yet the latter seems absurd, an unworkable policy, help targeted at the less needy. So I think that suggests there is a flaw in the argument that applying VAT would be a mistake. It’s about where the state directs its resources. Those who can afford private school fees are not the people in society most in need of help.
The argument is that not applying VAT to school fees saves money.
According to Google the average cost of school fees is £20,000 pet year. The VAT foregone is £4,000. The average per pupil spending is £7,400.
So it is cheaper to waive VAT than it is to pay the entire cost of a pupil in the state system. Now clearly the marginal cost of an *additional* pupil is less so the maths is more complicated than that but it’s indicative.
The question is the demand curve. If you impose a 20% price increase on a good, what is the change in demand?
Short term, it's likely to be quite inelastic due to sunk costs. If you've had a child in private education for ten years, you'll probably stay the course and see them through their last three years.
Additional cost of 20% VAT on £20k (average) school fees for 3 years is £12,000. Doable.
Longer term you are likely to see a drop off in numbers due to the lifetime costs of private education being much higher.
20% VAT on 13 years of education at £20,000 a year is £52,000 per child.
Given that additional cost, your capital may be better deployed by spending more on a house in a good catchment area or on private tutors as the child grows older.
Most will pay the extra £52,000 for the 13 years. But a significant number will not. And this will have knock-on effects, including finding an extra £7400 per pupil in the state sector for each switcher. Another knock on effect will be some of the more financially precarious minor day schools going under, as they did in the credit crunch.
We have some data points here, mostly gleaned from GFC era reportage about private school closures in the Independent, Mail and Standard, from which we can surmise approximately 30,000 private school children left private education (approx 5%) and 30 private schools closed down.
So what we have is a situation analogous to a credit crunch-esque decline in parents choosing private education, but sustained over the lifetime of the policy (assume it to be at least 10 years, or 2 Labour governments), rather than a year or two. A 5% decline year on year, every year, for a decade.
As others have noted here and elsewhere, the break even point for this policy is approximately 30% of the current 600k-ish privately educated pupils would have to seek state places before the policy becomes revenue negative for the taxpayer.
This will not happen overnight. But it will likely happen over a number of years, assuming a 5% year on year decline in parents choosing private education (supported by the behaviour of parents during the global financial crisis). The policy won't hurt at first, as parents of pupils already in private education will 'steer the course'. But private numbers will dwindle year on year as ~5% of parents of children who might have chosen private education instead choose state education.
The figure of a 2.7% reduction in new pupils *before* the policy has even come in suggests that a 5% year on year decline in privately educated pupils isn't far off the mark. You might see 3-4% fewer new starters once the policy is introduced, which will have a small impact in year 1, but a cumulative impact of a massive drop in privately educated numbers as existing pupils age their way out of the system. A 3.5% decline in private school pupils per annum, sustained over the next decade, would gradually make the policy revenue negative for the taxpayer (180,000 fewer pupils in private education by 2034).
VAT on private schools is excellent wedge politics from Labour. Significantly better than any of the stuff the Conservatives have tried.
For most people, private schools = that black and white Johnson/Cameron photo. And it links in beautifully with the helicoptered Sunak.
It's a nice bit of politicking that convinces the Labour faithful that Starmer might be heir to Blair, but at least he's still one of us.
It will cost the country money, in that it will cost more to educate those who would have been educated privately through the state sector instead, than it will raise in taxes.
And it will be full of unintended consequences - pushy middle class parents taking up places at better state schools that once went to those with less privileged backgrounds, further distortion of the housing market, a less well educated workforce, greater inequality (the ultra rich will still send their kids to the top public schools - it will be the climbers in the middle who miss out on the social mobility that sending your kids to a lesser day school provides), fewer initiatives for underprivileged kids that are currently provided by private schools and so on.
But it is red meat for red voters. Sometimes policies don't have to make sense to be popular, especially not when policy is based on ideology over evidence.
Whether it will cost the country money is yet to be determined.
If you are right that it will cost the country money, do you think we should subsidise private school fees? If taxing them will cost the country money, presumably we can save the country money by subsidising them.
I don't see why not. Presumably there is a sweet spot somewhere on the spectrum from taxatiom to subsidy. I instinctively don't think it's in the direction of more taxation, and it seems unlikely that the sweet spot is neither taxation nor subsidy.
So, you would be OK with the state spending taxpayers’ money preferentially on the rich (i.e. those who can afford private school fees)?
What, like we do with, say, the Arts Council? I'd have no principled objections to that. But when I made the point I was more assuming the state paying bursaries (of, by implication, those who would otherwise not have access to private education i.e. those outside, what, the top 10% or so.)
The argument against VAT on private school fees is that you’ll drive students out of private schools and you’ll end up having to pay for their education through the state system. If that’s the case, then presumably a small subsidy would encourage parents to take kids out of the state system, saving the country more than the cost of the subsidy.
Yet the latter seems absurd, an unworkable policy, help targeted at the less needy. So I think that suggests there is a flaw in the argument that applying VAT would be a mistake. It’s about where the state directs its resources. Those who can afford private school fees are not the people in society most in need of help.
The argument is that not applying VAT to school fees saves money.
According to Google the average cost of school fees is £20,000 pet year. The VAT foregone is £4,000. The average per pupil spending is £7,400.
So it is cheaper to waive VAT than it is to pay the entire cost of a pupil in the state system. Now clearly the marginal cost of an *additional* pupil is less so the maths is more complicated than that but it’s indicative.
The question is the demand curve. If you impose a 20% price increase on a good, what is the change in demand?
What's the elasticity?
Depends on how old they are. The younger kids are more elastic and less likely to be believed
VAT on private schools is excellent wedge politics from Labour. Significantly better than any of the stuff the Conservatives have tried.
For most people, private schools = that black and white Johnson/Cameron photo. And it links in beautifully with the helicoptered Sunak.
It's a nice bit of politicking that convinces the Labour faithful that Starmer might be heir to Blair, but at least he's still one of us.
It will cost the country money, in that it will cost more to educate those who would have been educated privately through the state sector instead, than it will raise in taxes.
And it will be full of unintended consequences - pushy middle class parents taking up places at better state schools that once went to those with less privileged backgrounds, further distortion of the housing market, a less well educated workforce, greater inequality (the ultra rich will still send their kids to the top public schools - it will be the climbers in the middle who miss out on the social mobility that sending your kids to a lesser day school provides), fewer initiatives for underprivileged kids that are currently provided by private schools and so on.
But it is red meat for red voters. Sometimes policies don't have to make sense to be popular, especially not when policy is based on ideology over evidence.
Whether it will cost the country money is yet to be determined.
If you are right that it will cost the country money, do you think we should subsidise private school fees? If taxing them will cost the country money, presumably we can save the country money by subsidising them.
I don't see why not. Presumably there is a sweet spot somewhere on the spectrum from taxatiom to subsidy. I instinctively don't think it's in the direction of more taxation, and it seems unlikely that the sweet spot is neither taxation nor subsidy.
So, you would be OK with the state spending taxpayers’ money preferentially on the rich (i.e. those who can afford private school fees)?
What, like we do with, say, the Arts Council? I'd have no principled objections to that. But when I made the point I was more assuming the state paying bursaries (of, by implication, those who would otherwise not have access to private education i.e. those outside, what, the top 10% or so.)
The argument against VAT on private school fees is that you’ll drive students out of private schools and you’ll end up having to pay for their education through the state system. If that’s the case, then presumably a small subsidy would encourage parents to take kids out of the state system, saving the country more than the cost of the subsidy.
Yet the latter seems absurd, an unworkable policy, help targeted at the less needy. So I think that suggests there is a flaw in the argument that applying VAT would be a mistake. It’s about where the state directs its resources. Those who can afford private school fees are not the people in society most in need of help.
The argument is that not applying VAT to school fees saves money.
According to Google the average cost of school fees is £20,000 pet year. The VAT foregone is £4,000. The average per pupil spending is £7,400.
So it is cheaper to waive VAT than it is to pay the entire cost of a pupil in the state system. Now clearly the marginal cost of an *additional* pupil is less so the maths is more complicated than that but it’s indicative.
The question is the demand curve. If you impose a 20% price increase on a good, what is the change in demand?
What's the elasticity?
Depends on how old they are. The younger kids are more elastic and less likely to be believed
We were just denied entry to @Eurovision with the EU 🇪🇺 flag. We were told by security it’s “political” and “not allowed”. How could the @EBU_HQ ban the EU flag at Europe’s biggest event? #Eurovision
VAT on private schools is excellent wedge politics from Labour. Significantly better than any of the stuff the Conservatives have tried.
For most people, private schools = that black and white Johnson/Cameron photo. And it links in beautifully with the helicoptered Sunak.
It's a nice bit of politicking that convinces the Labour faithful that Starmer might be heir to Blair, but at least he's still one of us.
It will cost the country money, in that it will cost more to educate those who would have been educated privately through the state sector instead, than it will raise in taxes.
And it will be full of unintended consequences - pushy middle class parents taking up places at better state schools that once went to those with less privileged backgrounds, further distortion of the housing market, a less well educated workforce, greater inequality (the ultra rich will still send their kids to the top public schools - it will be the climbers in the middle who miss out on the social mobility that sending your kids to a lesser day school provides), fewer initiatives for underprivileged kids that are currently provided by private schools and so on.
But it is red meat for red voters. Sometimes policies don't have to make sense to be popular, especially not when policy is based on ideology over evidence.
Whether it will cost the country money is yet to be determined.
If you are right that it will cost the country money, do you think we should subsidise private school fees? If taxing them will cost the country money, presumably we can save the country money by subsidising them.
I don't see why not. Presumably there is a sweet spot somewhere on the spectrum from taxatiom to subsidy. I instinctively don't think it's in the direction of more taxation, and it seems unlikely that the sweet spot is neither taxation nor subsidy.
So, you would be OK with the state spending taxpayers’ money preferentially on the rich (i.e. those who can afford private school fees)?
What, like we do with, say, the Arts Council? I'd have no principled objections to that. But when I made the point I was more assuming the state paying bursaries (of, by implication, those who would otherwise not have access to private education i.e. those outside, what, the top 10% or so.)
The argument against VAT on private school fees is that you’ll drive students out of private schools and you’ll end up having to pay for their education through the state system. If that’s the case, then presumably a small subsidy would encourage parents to take kids out of the state system, saving the country more than the cost of the subsidy.
Yet the latter seems absurd, an unworkable policy, help targeted at the less needy. So I think that suggests there is a flaw in the argument that applying VAT would be a mistake. It’s about where the state directs its resources. Those who can afford private school fees are not the people in society most in need of help.
The argument is that not applying VAT to school fees saves money.
According to Google the average cost of school fees is £20,000 pet year. The VAT foregone is £4,000. The average per pupil spending is £7,400.
So it is cheaper to waive VAT than it is to pay the entire cost of a pupil in the state system. Now clearly the marginal cost of an *additional* pupil is less so the maths is more complicated than that but it’s indicative.
The question is the demand curve. If you impose a 20% price increase on a good, what is the change in demand?
What's the elasticity?
Depends on how old they are. The younger kids are more elastic and less likely to be believed
Whether it will cost the country money is yet to be determined.
If you are right that it will cost the country money, do you think we should subsidise private school fees? If taxing them will cost the country money, presumably we can save the country money by subsidising them.
I don't see why not. Presumably there is a sweet spot somewhere on the spectrum from taxatiom to subsidy. I instinctively don't think it's in the direction of more taxation, and it seems unlikely that the sweet spot is neither taxation nor subsidy.
So, you would be OK with the state spending taxpayers’ money preferentially on the rich (i.e. those who can afford private school fees)?
What, like we do with, say, the Arts Council? I'd have no principled objections to that. But when I made the point I was more assuming the state paying bursaries (of, by implication, those who would otherwise not have access to private education i.e. those outside, what, the top 10% or so.)
The argument against VAT on private school fees is that you’ll drive students out of private schools and you’ll end up having to pay for their education through the state system. If that’s the case, then presumably a small subsidy would encourage parents to take kids out of the state system, saving the country more than the cost of the subsidy.
Yet the latter seems absurd, an unworkable policy, help targeted at the less needy. So I think that suggests there is a flaw in the argument that applying VAT would be a mistake. It’s about where the state directs its resources. Those who can afford private school fees are not the people in society most in need of help.
The argument is that not applying VAT to school fees saves money.
According to Google the average cost of school fees is £20,000 pet year. The VAT foregone is £4,000. The average per pupil spending is £7,400.
So it is cheaper to waive VAT than it is to pay the entire cost of a pupil in the state system. Now clearly the marginal cost of an *additional* pupil is less so the maths is more complicated than that but it’s indicative.
The question is the demand curve. If you impose a 20% price increase on a good, what is the change in demand?
Short term, it's likely to be quite inelastic due to sunk costs. If you've had a child in private education for ten years, you'll probably stay the course and see them through their last three years.
Additional cost of 20% VAT on £20k (average) school fees for 3 years is £12,000. Doable.
Longer term you are likely to see a drop off in numbers due to the lifetime costs of private education being much higher.
20% VAT on 13 years of education at £20,000 a year is £52,000 per child.
Given that additional cost, your capital may be better deployed by spending more on a house in a good catchment area or on private tutors as the child grows older.
I’ve changed my mind, it’s a brilliant policy.
(In all seriousness it would mean lots of extra work for me, even if my own fees became VAT rateable, but I still think it’s a bad policy.)
Letter in the Spectator, page 25 of the print edition.
"Judgement of Paris
Sir: I am sorry that Sean Thomas had such a horrible time in Paris. My recent experience was the exact opposite. I have been to Paris about 30 times, and ten days ago I stayed with friends near the Champs-Elysees. The streets are cleaner than in London, the restaurants friendlier and the service better. There are plenty of taxis. The churches are a joy to behold." [etc etc etc]
Letter in the Spectator, page 25 of the print edition.
"Judgement of Paris
Sir: I am sorry that Sean Thomas had such a horrible time in Paris. My recent experience was the exact opposite. I have been to Paris about 30 times, and ten days ago I stayed with friends near the Champs-Elysees. The streets are cleaner than in London, the restaurants friendlier and the service better. There are plenty of taxis. The churches are a joy to behold." [etc etc etc]
Letter in the Spectator, page 25 of the print edition.
"Judgement of Paris
Sir: I am sorry that Sean Thomas had such a horrible time in Paris. My recent experience was the exact opposite. I have been to Paris about 30 times, and ten days ago I stayed with friends near the Champs-Elysees. The streets are cleaner than in London, the restaurants friendlier and the service better. There are plenty of taxis. The churches are a joy to behold." [etc etc etc]
We were just denied entry to @Eurovision with the EU 🇪🇺 flag. We were told by security it’s “political” and “not allowed”. How could the @EBU_HQ ban the EU flag at Europe’s biggest event? #Eurovision
Whether it will cost the country money is yet to be determined.
If you are right that it will cost the country money, do you think we should subsidise private school fees? If taxing them will cost the country money, presumably we can save the country money by subsidising them.
I don't see why not. Presumably there is a sweet spot somewhere on the spectrum from taxatiom to subsidy. I instinctively don't think it's in the direction of more taxation, and it seems unlikely that the sweet spot is neither taxation nor subsidy.
So, you would be OK with the state spending taxpayers’ money preferentially on the rich (i.e. those who can afford private school fees)?
What, like we do with, say, the Arts Council? I'd have no principled objections to that. But when I made the point I was more assuming the state paying bursaries (of, by implication, those who would otherwise not have access to private education i.e. those outside, what, the top 10% or so.)
The argument against VAT on private school fees is that you’ll drive students out of private schools and you’ll end up having to pay for their education through the state system. If that’s the case, then presumably a small subsidy would encourage parents to take kids out of the state system, saving the country more than the cost of the subsidy.
Yet the latter seems absurd, an unworkable policy, help targeted at the less needy. So I think that suggests there is a flaw in the argument that applying VAT would be a mistake. It’s about where the state directs its resources. Those who can afford private school fees are not the people in society most in need of help.
The argument is that not applying VAT to school fees saves money.
According to Google the average cost of school fees is £20,000 pet year. The VAT foregone is £4,000. The average per pupil spending is £7,400.
So it is cheaper to waive VAT than it is to pay the entire cost of a pupil in the state system. Now clearly the marginal cost of an *additional* pupil is less so the maths is more complicated than that but it’s indicative.
The question is the demand curve. If you impose a 20% price increase on a good, what is the change in demand?
Short term, it's likely to be quite inelastic due to sunk costs. If you've had a child in private education for ten years, you'll probably stay the course and see them through their last three years.
Additional cost of 20% VAT on £20k (average) school fees for 3 years is £12,000. Doable.
Longer term you are likely to see a drop off in numbers due to the lifetime costs of private education being much higher.
20% VAT on 13 years of education at £20,000 a year is £52,000 per child.
Given that additional cost, your capital may be better deployed by spending more on a house in a good catchment area or on private tutors as the child grows older.
Most will pay the extra £52,000 for the 13 years. But a significant number will not. And this will have knock-on effects, including finding an extra £7400 per pupil in the state sector for each switcher. Another knock on effect will be some of the more financially precarious minor day schools going under, as they did in the credit crunch.
We have some data points here, mostly gleaned from GFC era reportage about private school closures in the Independent, Mail and Standard, from which we can surmise approximately 30,000 private school children left private education (approx 5%) and 30 private schools closed down.
So what we have is a situation analogous to a credit crunch-esque decline in parents choosing private education, but sustained over the lifetime of the policy (assume it to be at least 10 years, or 2 Labour governments), rather than a year or two. A 5% decline year on year, every year, for a decade.
As others have noted here and elsewhere, the break even point for this policy is approximately 30% of the current 600k-ish privately educated pupils would have to seek state places before the policy becomes revenue negative for the taxpayer.
This will not happen overnight. But it will likely happen over a number of years, assuming a 5% year on year decline in parents choosing private education (supported by the behaviour of parents during the global financial crisis). The policy won't hurt at first, as parents of pupils already in private education will 'steer the course'. But private numbers will dwindle year on year as ~5% of parents of children who might have chosen private education instead choose state education.
The figure of a 2.7% reduction in new pupils *before* the policy has even come in suggests that a 5% year on year decline in privately educated pupils isn't far off the mark. You might see 3-4% fewer new starters once the policy is introduced, which will have a small impact in year 1, but a cumulative impact of a massive drop in privately educated numbers as existing pupils age their way out of the system. A 3.5% decline in private school pupils per annum, sustained over the next decade, would gradually make the policy revenue negative for the taxpayer (180,000 fewer pupils in private education by 2034).
Letter in the Spectator, page 25 of the print edition.
"Judgement of Paris
Sir: I am sorry that Sean Thomas had such a horrible time in Paris. My recent experience was the exact opposite. I have been to Paris about 30 times, and ten days ago I stayed with friends near the Champs-Elysees. The streets are cleaner than in London, the restaurants friendlier and the service better. There are plenty of taxis. The churches are a joy to behold." [etc etc etc]
David Astor, Chipping Norton, Oxfordshire"
Mrs Foxy was in Paris last week for a girls weekend. Ate well, though not cheap, and was quite safe wandering around. She even found the Parisiens quite helpful, carrying her luggage for her up the stairs from the metro. She was staying in Bastille.
We were just denied entry to @Eurovision with the EU 🇪🇺 flag. We were told by security it’s “political” and “not allowed”. How could the @EBU_HQ ban the EU flag at Europe’s biggest event? #Eurovision
VAT on private schools is excellent wedge politics from Labour. Significantly better than any of the stuff the Conservatives have tried.
For most people, private schools = that black and white Johnson/Cameron photo. And it links in beautifully with the helicoptered Sunak.
Yes. It works on multiple levels. If it doesn't lead to a drop in private school numbers, good because it raises money to channel to the underfunded state sector. If it does lead to a drop, also good because it's about discouraging the affluent from forming their own educational 'gated community' outside of the mainstream. Either which way it can be presented with a straight face as a win.
In addition it's a policy that: (i) Pleases the left. (ii) Polls well amongst target voters in target seats, esp the Red Wall. (iii) Is both eyecatching and affordable.
Policies that tick all those boxes are very very hard to come up with. This one does it. It's a star.
Given the enthusiasm and joy with which various local authorities are proud of 98% occupancy in schools, what do you think will happen when there is demand for more places?
Indeed. But we are dealing with the DfE here. The policy of running at 98% occupancy of places is already insane. What makes you think that their response to falling pupils numbers (or rising pupil numbers) will be any less insane?
And there is a link back to the header there. If something apparently insane or self-harming is going on, the question is what on the mental map is causing it?
In the case of schools, it's a couple of things. One is that money follows pupils so directly- so having an empty seat in 9C is about seven grand forgone. And that's in an environment where most of the costs are fixed. Hence the bizarre phenomenon of schools advertising on the back of London buses- you don't need many responses for it to be worth it. (And if you don't, you risk losing out big time to your rivals.)
Second, even 100 percent occupancy doesn't comfortably pay the bills right now. Once you fall to ninety or eighty, your budget is screwed (this was an ongoing nightmare at the place I governed for a while.) Coupled with parent choice dynamics, what you usually get is four schools in a town full (or overfull) with all the spare places at the fifth, doomed school.
Obviously, the DfE are useless pinheads, but this one isn't their fault.
The DfE are part of the stupid system.
Operational Research tells us that an organisation or system running at such levels of utilisation will have quality failures, morale failures, loss of key staff and generally will stagger along in a fucked up state. With occasional disasters to liven the mix.
Strangely, teachers report….
Oh, absolutely.
But one of the uncomfortable realities for anyone on the right (even the dripping wet, "Starmer is a better approximation than Sunak" types like me) is that individuals acting rationally can add up to a collectively bad solution. And that has happened for parental preference in schools.
I don't see any government being willing to find meaningful spare capacity in schools, or any parent being willing to be fobbed off with "yes, that may look like an empty space at St Ofsted's, but it isn't really vacant so Tallulah can't have it."
Maybe we should end consumer preference in supermarkets and nationalise into one regulated one with managed spare capacity instead.
Individuals acting rationally can add up to a collectively bad solution.
Of course not.
Leaving aside the horses for courses argument (you can open and close supermarkets much more quickly than you can schools, so the invisible hand can operate better), I am not saying that we shouldn't have parental preference... Just that it inevitably leads to what we have. Most schools full to capacity and a handful of schools with all the empty places. Which creates its own problems.
But one of the things free marketeers hoped for was that popular schools would expand to meet parental demand. In general, that hasn't happened. Even in the private sector, most heads would rather run their school as it is than try to make it bigger. Both the finances and the staff management are off-putting.
In fact our school expanded from 120/year intake to 150/year about five years ago, precisely to try to make the finances work.
Now we have to institute one-way systems on stairs etc and lateness to lessons has significantly increased because the school can't cope with the extra capacity 🫣.
It's a great idea in theory, but hasn't worked for us.
We've also expanded. We've put up three new outbuildings and moved the entire Sixth Form to a site in a different town in the past two years. But that's it. We are completely surrounded by housing and another school. Our field is protected by Sport England. The car park is dangerously overfull. The only expansion we could do is to find a completely new site. Which could not happen easily, cheaply or within the next few years. We've a lengthy and growing waiting list. The free market argument on capacity somewhat breaks down here.
VAT on private schools is excellent wedge politics from Labour. Significantly better than any of the stuff the Conservatives have tried.
For most people, private schools = that black and white Johnson/Cameron photo. And it links in beautifully with the helicoptered Sunak.
It's a nice bit of politicking that convinces the Labour faithful that Starmer might be heir to Blair, but at least he's still one of us.
It will cost the country money, in that it will cost more to educate those who would have been educated privately through the state sector instead, than it will raise in taxes.
And it will be full of unintended consequences - pushy middle class parents taking up places at better state schools that once went to those with less privileged backgrounds, further distortion of the housing market, a less well educated workforce, greater inequality (the ultra rich will still send their kids to the top public schools - it will be the climbers in the middle who miss out on the social mobility that sending your kids to a lesser day school provides), fewer initiatives for underprivileged kids that are currently provided by private schools and so on.
But it is red meat for red voters. Sometimes policies don't have to make sense to be popular, especially not when policy is based on ideology over evidence.
Whether it will cost the country money is yet to be determined.
If you are right that it will cost the country money, do you think we should subsidise private school fees? If taxing them will cost the country money, presumably we can save the country money by subsidising them.
I don't see why not. Presumably there is a sweet spot somewhere on the spectrum from taxatiom to subsidy. I instinctively don't think it's in the direction of more taxation, and it seems unlikely that the sweet spot is neither taxation nor subsidy.
So, you would be OK with the state spending taxpayers’ money preferentially on the rich (i.e. those who can afford private school fees)?
What, like we do with, say, the Arts Council? I'd have no principled objections to that. But when I made the point I was more assuming the state paying bursaries (of, by implication, those who would otherwise not have access to private education i.e. those outside, what, the top 10% or so.)
The argument against VAT on private school fees is that you’ll drive students out of private schools and you’ll end up having to pay for their education through the state system. If that’s the case, then presumably a small subsidy would encourage parents to take kids out of the state system, saving the country more than the cost of the subsidy.
Yet the latter seems absurd, an unworkable policy, help targeted at the less needy. So I think that suggests there is a flaw in the argument that applying VAT would be a mistake. It’s about where the state directs its resources. Those who can afford private school fees are not the people in society most in need of help.
The argument is that not applying VAT to school fees saves money.
According to Google the average cost of school fees is £20,000 pet year. The VAT foregone is £4,000. The average per pupil spending is £7,400.
So it is cheaper to waive VAT than it is to pay the entire cost of a pupil in the state system. Now clearly the marginal cost of an *additional* pupil is less so the maths is more complicated than that but it’s indicative.
The question is the demand curve. If you impose a 20% price increase on a good, what is the change in demand?
What's the elasticity?
Depends on how old they are. The younger kids are more elastic and less likely to be believed
Speak for yourself: my two-year old goes as rigid as a board when he's not believed.
We were just denied entry to @Eurovision with the EU 🇪🇺 flag. We were told by security it’s “political” and “not allowed”. How could the @EBU_HQ ban the EU flag at Europe’s biggest event? #Eurovision
Letter in the Spectator, page 25 of the print edition.
"Judgement of Paris
Sir: I am sorry that Sean Thomas had such a horrible time in Paris. My recent experience was the exact opposite. I have been to Paris about 30 times, and ten days ago I stayed with friends near the Champs-Elysees. The streets are cleaner than in London, the restaurants friendlier and the service better. There are plenty of taxis. The churches are a joy to behold." [etc etc etc]
David Astor, Chipping Norton, Oxfordshire"
Mrs Foxy was in Paris last week for a girls weekend. Ate well, though not cheap, and was quite safe wandering around. She even found the Parisiens quite helpful, carrying her luggage for her up the stairs from the metro. She was staying in Bastille.
"I have been to Paris about 30 times, and ten days ago I stayed with friends near the Champs-Elysees."
Letter in the Spectator, page 25 of the print edition.
"Judgement of Paris
Sir: I am sorry that Sean Thomas had such a horrible time in Paris. My recent experience was the exact opposite. I have been to Paris about 30 times, and ten days ago I stayed with friends near the Champs-Elysees. The streets are cleaner than in London, the restaurants friendlier and the service better. There are plenty of taxis. The churches are a joy to behold." [etc etc etc]
David Astor, Chipping Norton, Oxfordshire"
Mrs Foxy was in Paris last week for a girls weekend. Ate well, though not cheap, and was quite safe wandering around. She even found the Parisiens quite helpful, carrying her luggage for her up the stairs from the metro. She was staying in Bastille.
VAT on private schools is excellent wedge politics from Labour. Significantly better than any of the stuff the Conservatives have tried.
For most people, private schools = that black and white Johnson/Cameron photo. And it links in beautifully with the helicoptered Sunak.
It's a nice bit of politicking that convinces the Labour faithful that Starmer might be heir to Blair, but at least he's still one of us.
It will cost the country money, in that it will cost more to educate those who would have been educated privately through the state sector instead, than it will raise in taxes.
And it will be full of unintended consequences - pushy middle class parents taking up places at better state schools that once went to those with less privileged backgrounds, further distortion of the housing market, a less well educated workforce, greater inequality (the ultra rich will still send their kids to the top public schools - it will be the climbers in the middle who miss out on the social mobility that sending your kids to a lesser day school provides), fewer initiatives for underprivileged kids that are currently provided by private schools and so on.
But it is red meat for red voters. Sometimes policies don't have to make sense to be popular, especially not when policy is based on ideology over evidence.
Whether it will cost the country money is yet to be determined.
If you are right that it will cost the country money, do you think we should subsidise private school fees? If taxing them will cost the country money, presumably we can save the country money by subsidising them.
I don't see why not. Presumably there is a sweet spot somewhere on the spectrum from taxatiom to subsidy. I instinctively don't think it's in the direction of more taxation, and it seems unlikely that the sweet spot is neither taxation nor subsidy.
So, you would be OK with the state spending taxpayers’ money preferentially on the rich (i.e. those who can afford private school fees)?
What, like we do with, say, the Arts Council? I'd have no principled objections to that. But when I made the point I was more assuming the state paying bursaries (of, by implication, those who would otherwise not have access to private education i.e. those outside, what, the top 10% or so.)
The argument against VAT on private school fees is that you’ll drive students out of private schools and you’ll end up having to pay for their education through the state system. If that’s the case, then presumably a small subsidy would encourage parents to take kids out of the state system, saving the country more than the cost of the subsidy.
Yet the latter seems absurd, an unworkable policy, help targeted at the less needy. So I think that suggests there is a flaw in the argument that applying VAT would be a mistake. It’s about where the state directs its resources. Those who can afford private school fees are not the people in society most in need of help.
The argument is that not applying VAT to school fees saves money.
According to Google the average cost of school fees is £20,000 pet year. The VAT foregone is £4,000. The average per pupil spending is £7,400.
So it is cheaper to waive VAT than it is to pay the entire cost of a pupil in the state system. Now clearly the marginal cost of an *additional* pupil is less so the maths is more complicated than that but it’s indicative.
The question is the demand curve. If you impose a 20% price increase on a good, what is the change in demand?
What's the elasticity?
Depends on how old they are. The younger kids are more elastic and less likely to be believed
Speak for yourself: my two-year old goes as rigid as a board when he's not believed.
Whether it will cost the country money is yet to be determined.
If you are right that it will cost the country money, do you think we should subsidise private school fees? If taxing them will cost the country money, presumably we can save the country money by subsidising them.
I don't see why not. Presumably there is a sweet spot somewhere on the spectrum from taxatiom to subsidy. I instinctively don't think it's in the direction of more taxation, and it seems unlikely that the sweet spot is neither taxation nor subsidy.
So, you would be OK with the state spending taxpayers’ money preferentially on the rich (i.e. those who can afford private school fees)?
What, like we do with, say, the Arts Council? I'd have no principled objections to that. But when I made the point I was more assuming the state paying bursaries (of, by implication, those who would otherwise not have access to private education i.e. those outside, what, the top 10% or so.)
The argument against VAT on private school fees is that you’ll drive students out of private schools and you’ll end up having to pay for their education through the state system. If that’s the case, then presumably a small subsidy would encourage parents to take kids out of the state system, saving the country more than the cost of the subsidy.
Yet the latter seems absurd, an unworkable policy, help targeted at the less needy. So I think that suggests there is a flaw in the argument that applying VAT would be a mistake. It’s about where the state directs its resources. Those who can afford private school fees are not the people in society most in need of help.
The argument is that not applying VAT to school fees saves money.
According to Google the average cost of school fees is £20,000 pet year. The VAT foregone is £4,000. The average per pupil spending is £7,400.
So it is cheaper to waive VAT than it is to pay the entire cost of a pupil in the state system. Now clearly the marginal cost of an *additional* pupil is less so the maths is more complicated than that but it’s indicative.
The question is the demand curve. If you impose a 20% price increase on a good, what is the change in demand?
Short term, it's likely to be quite inelastic due to sunk costs. If you've had a child in private education for ten years, you'll probably stay the course and see them through their last three years.
Additional cost of 20% VAT on £20k (average) school fees for 3 years is £12,000. Doable.
Longer term you are likely to see a drop off in numbers due to the lifetime costs of private education being much higher.
20% VAT on 13 years of education at £20,000 a year is £52,000 per child.
Given that additional cost, your capital may be better deployed by spending more on a house in a good catchment area or on private tutors as the child grows older.
Most will pay the extra £52,000 for the 13 years. But a significant number will not. And this will have knock-on effects, including finding an extra £7400 per pupil in the state sector for each switcher. Another knock on effect will be some of the more financially precarious minor day schools going under, as they did in the credit crunch.
We have some data points here, mostly gleaned from GFC era reportage about private school closures in the Independent, Mail and Standard, from which we can surmise approximately 30,000 private school children left private education (approx 5%) and 30 private schools closed down.
So what we have is a situation analogous to a credit crunch-esque decline in parents choosing private education, but sustained over the lifetime of the policy (assume it to be at least 10 years, or 2 Labour governments), rather than a year or two. A 5% decline year on year, every year, for a decade.
As others have noted here and elsewhere, the break even point for this policy is approximately 30% of the current 600k-ish privately educated pupils would have to seek state places before the policy becomes revenue negative for the taxpayer.
This will not happen overnight. But it will likely happen over a number of years, assuming a 5% year on year decline in parents choosing private education (supported by the behaviour of parents during the global financial crisis). The policy won't hurt at first, as parents of pupils already in private education will 'steer the course'. But private numbers will dwindle year on year as ~5% of parents of children who might have chosen private education instead choose state education.
The figure of a 2.7% reduction in new pupils *before* the policy has even come in suggests that a 5% year on year decline in privately educated pupils isn't far off the mark. You might see 3-4% fewer new starters once the policy is introduced, which will have a small impact in year 1, but a cumulative impact of a massive drop in privately educated numbers as existing pupils age their way out of the system. A 3.5% decline in private school pupils per annum, sustained over the next decade, would gradually make the policy revenue negative for the taxpayer (180,000 fewer pupils in private education by 2034).
Excellent post.
Thanks for reading it! It was long winded so I stopped there, and I didn't even get into the unknowns, like what happens when a school shuts down (as 30 did under the GFC) and an area suddenly has to find 500 state places rather than 50 - is the additional cost per pupil still £7400 or are there additional costs of building new schools once you reach a critical mass of schools closing down / private pupil numbers dwindling?
Everything screams 'this is a bad policy if you look beyond the headline figures' to me.
VAT on private schools is excellent wedge politics from Labour. Significantly better than any of the stuff the Conservatives have tried.
For most people, private schools = that black and white Johnson/Cameron photo. And it links in beautifully with the helicoptered Sunak.
It's a nice bit of politicking that convinces the Labour faithful that Starmer might be heir to Blair, but at least he's still one of us.
It will cost the country money, in that it will cost more to educate those who would have been educated privately through the state sector instead, than it will raise in taxes.
And it will be full of unintended consequences - pushy middle class parents taking up places at better state schools that once went to those with less privileged backgrounds, further distortion of the housing market, a less well educated workforce, greater inequality (the ultra rich will still send their kids to the top public schools - it will be the climbers in the middle who miss out on the social mobility that sending your kids to a lesser day school provides), fewer initiatives for underprivileged kids that are currently provided by private schools and so on.
But it is red meat for red voters. Sometimes policies don't have to make sense to be popular, especially not when policy is based on ideology over evidence.
Whether it will cost the country money is yet to be determined.
If you are right that it will cost the country money, do you think we should subsidise private school fees? If taxing them will cost the country money, presumably we can save the country money by subsidising them.
I don't see why not. Presumably there is a sweet spot somewhere on the spectrum from taxatiom to subsidy. I instinctively don't think it's in the direction of more taxation, and it seems unlikely that the sweet spot is neither taxation nor subsidy.
So, you would be OK with the state spending taxpayers’ money preferentially on the rich (i.e. those who can afford private school fees)?
What, like we do with, say, the Arts Council? I'd have no principled objections to that. But when I made the point I was more assuming the state paying bursaries (of, by implication, those who would otherwise not have access to private education i.e. those outside, what, the top 10% or so.)
The argument against VAT on private school fees is that you’ll drive students out of private schools and you’ll end up having to pay for their education through the state system. If that’s the case, then presumably a small subsidy would encourage parents to take kids out of the state system, saving the country more than the cost of the subsidy.
Yet the latter seems absurd, an unworkable policy, help targeted at the less needy. So I think that suggests there is a flaw in the argument that applying VAT would be a mistake. It’s about where the state directs its resources. Those who can afford private school fees are not the people in society most in need of help.
The argument is that not applying VAT to school fees saves money.
According to Google the average cost of school fees is £20,000 pet year. The VAT foregone is £4,000. The average per pupil spending is £7,400.
So it is cheaper to waive VAT than it is to pay the entire cost of a pupil in the state system. Now clearly the marginal cost of an *additional* pupil is less so the maths is more complicated than that but it’s indicative.
The question is the demand curve. If you impose a 20% price increase on a good, what is the change in demand?
You are not imposing a 20% price increase!
Private schools are free to keep their prices the same, but merely cut their costs or most likely do some combination of cost cutting and price increase.
VAT on private schools is excellent wedge politics from Labour. Significantly better than any of the stuff the Conservatives have tried.
For most people, private schools = that black and white Johnson/Cameron photo. And it links in beautifully with the helicoptered Sunak.
It's a nice bit of politicking that convinces the Labour faithful that Starmer might be heir to Blair, but at least he's still one of us.
It will cost the country money, in that it will cost more to educate those who would have been educated privately through the state sector instead, than it will raise in taxes.
And it will be full of unintended consequences - pushy middle class parents taking up places at better state schools that once went to those with less privileged backgrounds, further distortion of the housing market, a less well educated workforce, greater inequality (the ultra rich will still send their kids to the top public schools - it will be the climbers in the middle who miss out on the social mobility that sending your kids to a lesser day school provides), fewer initiatives for underprivileged kids that are currently provided by private schools and so on.
But it is red meat for red voters. Sometimes policies don't have to make sense to be popular, especially not when policy is based on ideology over evidence.
Whether it will cost the country money is yet to be determined.
If you are right that it will cost the country money, do you think we should subsidise private school fees? If taxing them will cost the country money, presumably we can save the country money by subsidising them.
I don't see why not. Presumably there is a sweet spot somewhere on the spectrum from taxatiom to subsidy. I instinctively don't think it's in the direction of more taxation, and it seems unlikely that the sweet spot is neither taxation nor subsidy.
So, you would be OK with the state spending taxpayers’ money preferentially on the rich (i.e. those who can afford private school fees)?
What, like we do with, say, the Arts Council? I'd have no principled objections to that. But when I made the point I was more assuming the state paying bursaries (of, by implication, those who would otherwise not have access to private education i.e. those outside, what, the top 10% or so.)
The argument against VAT on private school fees is that you’ll drive students out of private schools and you’ll end up having to pay for their education through the state system. If that’s the case, then presumably a small subsidy would encourage parents to take kids out of the state system, saving the country more than the cost of the subsidy.
Yet the latter seems absurd, an unworkable policy, help targeted at the less needy. So I think that suggests there is a flaw in the argument that applying VAT would be a mistake. It’s about where the state directs its resources. Those who can afford private school fees are not the people in society most in need of help.
The argument is that not applying VAT to school fees saves money.
According to Google the average cost of school fees is £20,000 pet year. The VAT foregone is £4,000. The average per pupil spending is £7,400.
So it is cheaper to waive VAT than it is to pay the entire cost of a pupil in the state system. Now clearly the marginal cost of an *additional* pupil is less so the maths is more complicated than that but it’s indicative.
The question is the demand curve. If you impose a 20% price increase on a good, what is the change in demand?
You are not imposing a 20% price increase!
Private schools are free to keep their prices the same, but merely cut their costs or most likely do some combination of cost cutting and price increase.
Several have already said they intend to.
But again, for those small private schools on tight margins it's certainly going to be much more difficult to do that than it will be for schools with vast endowments...
Letter in the Spectator, page 25 of the print edition.
"Judgement of Paris
Sir: I am sorry that Sean Thomas had such a horrible time in Paris. My recent experience was the exact opposite. I have been to Paris about 30 times, and ten days ago I stayed with friends near the Champs-Elysees. The streets are cleaner than in London, the restaurants friendlier and the service better. There are plenty of taxis. The churches are a joy to behold." [etc etc etc]
David Astor, Chipping Norton, Oxfordshire"
David is probably correct. That Speccie article did have an air of fiction about it.
I know I am late to this but as an adoptive father 4x over I echo what James says and have seen this issue of abysmal self esteem brought on by early life abuse and adoption play out in its own way for all 4 if my children. I love them but would have to say to anyone thinking of following in our footsteps to think very very carefully. Love is often not enough to heal these wounds and the " system " is stacked against you. Too many social workers are conditioned to blame the parents when serious dysfunction break out as it often does in the teen years. Shockingly stats on adopted children's outcomes are hard to find to the point I think the system doesn't want to know. If you want to know anymore see https://www.ourpatch.org.uk/
Comments
Leaving aside the horses for courses argument (you can open and close supermarkets much more quickly than you can schools, so the invisible hand can operate better), I am not saying that we shouldn't have parental preference... Just that it inevitably leads to what we have. Most schools full to capacity and a handful of schools with all the empty places. Which creates its own problems.
But one of the things free marketeers hoped for was that popular schools would expand to meet parental demand. In general, that hasn't happened. Even in the private sector, most heads would rather run their school as it is than try to make it bigger. Both the finances and the staff management are off-putting.
https://www.thetimes.co.uk/article/4a41790e-d149-42d3-a1d4-dd3bcb448b03?shareToken=f1bc70de16c862cb1fc1217feed6ad23
Besides, pretty much every parent in the land would hate a government who tried that with the fury of a thousand... What's that bright thing in the sky today?
You frequently seem to think that policies with “their heart in the right place” are better. Just because.
Failure to understand that even the best intentions and actions can have negative consequences is common.
Nor is recognising those problems is not to attack the good intentions. Or even the policies themselves.
The current issues with shop lifting are, for example, nearly entirely the result of a series of changes, each one of which is a good thing. In the liberal democratic sense.
Going back to a world where shop assistants were pressured by the employers into physical altercations with thieves followed by a “passage a tabac” for the shoplifter and then The Old Bill collecting them from impromptu imprisonment in a closet is not a good idea.
But neither is ignoring shoplifting.
In fact our school expanded from 120/year intake to 150/year about five years ago, precisely to try to make the finances work.
Now we have to institute one-way systems on stairs etc and lateness to lessons has significantly increased because the school can't cope with the extra capacity 🫣.
It's a great idea in theory, but hasn't worked for us.
Many universities seem to remove value, so not charging VAT on their fees seems perfectly logical.
Discuss.
In this view they are tragically mistaken.
But it will never happen. Too many powerful people whose jobs suddenly vanish would squeal.
Additional cost of 20% VAT on £20k (average) school fees for 3 years is £12,000. Doable.
Longer term you are likely to see a drop off in numbers due to the lifetime costs of private education being much higher.
20% VAT on 13 years of education at £20,000 a year is £52,000 per child.
Given that additional cost, your capital may be better deployed by spending more on a house in a good catchment area or on private tutors as the child grows older.
Most will pay the extra £52,000 for the 13 years. But a significant number will not. And this will have knock-on effects, including finding an extra £7400 per pupil in the state sector for each switcher. Another knock on effect will be some of the more financially precarious minor day schools going under, as they did in the credit crunch.
We have some data points here, mostly gleaned from GFC era reportage about private school closures in the Independent, Mail and Standard, from which we can surmise approximately 30,000 private school children left private education (approx 5%) and 30 private schools closed down.
So what we have is a situation analogous to a credit crunch-esque decline in parents choosing private education, but sustained over the lifetime of the policy (assume it to be at least 10 years, or 2 Labour governments), rather than a year or two. A 5% decline year on year, every year, for a decade.
As others have noted here and elsewhere, the break even point for this policy is approximately 30% of the current 600k-ish privately educated pupils would have to seek state places before the policy becomes revenue negative for the taxpayer.
This will not happen overnight. But it will likely happen over a number of years, assuming a 5% year on year decline in parents choosing private education (supported by the behaviour of parents during the global financial crisis). The policy won't hurt at first, as parents of pupils already in private education will 'steer the course'. But private numbers will dwindle year on year as ~5% of parents of children who might have chosen private education instead choose state education.
The figure of a 2.7% reduction in new pupils *before* the policy has even come in suggests that a 5% year on year decline in privately educated pupils isn't far off the mark. You might see 3-4% fewer new starters once the policy is introduced, which will have a small impact in year 1, but a cumulative impact of a massive drop in privately educated numbers as existing pupils age their way out of the system. A 3.5% decline in private school pupils per annum, sustained over the next decade, would gradually make the policy revenue negative for the taxpayer (180,000 fewer pupils in private education by 2034).
https://x.com/dorinfrasineanu/status/1789343562678640770
We were just denied entry to @Eurovision with the EU 🇪🇺 flag. We were told by security it’s “political” and “not allowed”. How could the @EBU_HQ ban the EU flag at Europe’s biggest event? #Eurovision
(In all seriousness it would mean lots of extra work for me, even if my own fees became VAT rateable, but I still think it’s a bad policy.)
"Judgement of Paris
Sir: I am sorry that Sean Thomas had such a horrible time in Paris. My recent experience was the exact opposite. I have been to Paris about 30 times, and ten days ago I stayed with friends near the Champs-Elysees. The streets are cleaner than in London, the restaurants friendlier and the service better. There are plenty of taxis. The churches are a joy to behold." [etc etc etc]
David Astor, Chipping Norton, Oxfordshire"
https://twitter.com/songfestival/status/1789317066039726298?t=a3r353bYASZXNgW01r1eVA&s=19
Note no antisemitism or physical violence involved
But that's it. We are completely surrounded by housing and another school.
Our field is protected by Sport England.
The car park is dangerously overfull.
The only expansion we could do is to find a completely new site.
Which could not happen easily, cheaply or within the next few years.
We've a lengthy and growing waiting list.
The free market argument on capacity somewhat breaks down here.
Heading towards a Pseuds Corner entry frankly.
NEW THREAD
Everything screams 'this is a bad policy if you look beyond the headline figures' to me.
Private schools are free to keep their prices the same, but merely cut their costs or most likely do some combination of cost cutting and price increase.
But again, for those small private schools on tight margins it's certainly going to be much more difficult to do that than it will be for schools with vast endowments...