VAT on fees: Parents and schools 'facing difficult decisions at short notice', ISC CEO warns

Speaking to Tom Swarbrick on LBC earlier today, Julie Robinson responded to comments made by education secretary Bridget Phillipson, who suggested that independent school closures are the result of parental choice. Ms Robinson stated: "Schools have been under a series of financial pressures for some time, and those are bound to take their toll. But there are schools who would otherwise have been able to weather this current economic climate, who are going to find VAT and the loss of business rates relief simply a bridge too far. It's going to be made all the more acute by the acceleration of these plans to place a tax on education from January.

"It's clear that VAT is affecting schools already... we know that from heads and from parents who are faced with this sudden extra tax, they're going to have to make really difficult decisions at short notice.

"It's been announced during the summer holidays... parents who were going to bring their children into new school places in September, I'm hearing from heads that those parents are citing VAT as the reason why they're not now going to send their child in. And for the smaller schools, or schools operating on finer margins, who try and keep their fees as low as possible, losing just a handful of pupils can be the difference between staying open or having to close."

Highlighting the sector's bursary provision, which supports children who might not otherwise be able to access an independent education, Ms Robinson said: "A third of children at independent schools in membership of the ISC are on reduced fee places. So not all these schools are highly, highly expensive schools. They have bursaries, they provide free places as well." 

Questioned about the Institute for Fiscal Studies (IFS) predictions that 40,000 children could be forced to leave independent schools, Ms Robinson said: "There are three other reports, all of which suggest a far more worrying situation where many, many more children could move. Even the IFS itself says that the evidence is thin and it's difficult to predict. But what we need to remember is that for schools running an efficient and effective school so that they can provide the good teaching that children need, about a half to three quarters of their costs are on staff. About 70 per cent of what is spent by schools is staffing costs, and that's not a frippery."

Expressing concern about VAT being imposed on fees from January 2025, Ms Robinson said: "The expectation was that it was going to be the beginning of an academic year. So, having expected it to be September 2025, over the summer holidays, suddenly there's been an announcement that it will be part-way, and that means all the budgets that are set and the fee structure that's set and the staffing that has all been planned out long in advance suddenly is up in the air... parents have already made decisions and now have an awful lot of thinking to do. It's really disruptive for children. It's a really tough time."

On the reasoning behind Labour's tax plans, Ms Robinson said: "I absolutely see the point that we need a properly funded state sector, and every child deserves a great education. I think we're all behind that. I just don't think this policy is the way to achieve that. It's a bit of a gamble how much it will raise, if anything at all."

Concluding the discussion, Ms Robinson said: "Some studies say ultimately it will cost money to do this because of all the children who are displaced into the state system, including special needs children. So the money to support state education should come from elsewhere, not education. We should be sharing all the education opportunities we've got so that more children can thrive."