Last week — totally unnoticed — Kier Starmer gave a speech setting out plans to remove charitable status from private schools. In a season of tax cuts, hazy on the detail, this is the strangest of the lot.
We will just end up with wealthy colonies
Bashing Eton might be fun for a certain type of politician and columnist, but picking up the tab for parents forced out of private schools will end up lightening the pockets of British taxpayers. It just doesn’t make any sense, especially for poorer children.
Most private schools are not famous global brands like Eton, Westminster or Winchester. Most plod along as going concerns without huge endowments. The average size of an independent school is a little less than 400 pupils — a figure that drops to around 250 for junior schools. Forget the big-name schools that educate thousands of very wealthy children — a drop in numbers will have a big impact on the average private school you’ve probably never heard of.
Scrap the VAT exemption that comes with charitable status, and many will face a choice of closing their doors or simply raising their fees even further out of reach of local people. Those that shut will send their children to local state schools, pushing out poorer children as well-heeled parents plough fees into houses on the doorsteps of good schools — moving from fees to mortgages as they snap up housing next to the best schools.
We will just end up with wealthy colonies. Where fees rise, pushing out middle-income parents, the process will be more gradual but no less obvious. Moving from fees to mortgages will become the norm, creating a new dividing line in education.
The figure that upsets the Labour Party so much is the notional £1.6 billion spent on VAT exemptions for private schools. Researchers from the Independent Schools Council have modelled that a loss of charitable status would lead to a 15 per cent rise in prices and the development of a private school diaspora counting some 100,000 kids among its members. About 1 in 10 (roughly 56,000) children would drop out “immediately” because their parents could no longer afford the fees.
This figure would double within four years as private schools struggle to fill classrooms with local parents. This would be an expensive business for the Department for Education, left with picking up the bill. Far from saving the government money, educating so many children moving from one sector to the other would likely end up costing more than £400m a year.
There is always a fee to pay for educating children. It’s just a question of who pays. There are also warnings that the £1 billion spent by private schools on business and scholarships would quickly dry up as schools tighten their belts.
Private school fees have trebled in price
The British independent school sector has become increasingly removed from its traditional customer base of local middle-class professionals. Over several generations, private school fees have trebled in price in real terms. That means in the 1980s, a family sending two children to a private day school would expect to pay £10,000 for two senior two places (in today’s money) compared to over £60,000 today from post-tax income. In reality, families would need a household income well in excess of £200,000 to comfortably afford a modern private school education.
Some pioneers have experimented with setting up low-cost private schools in the UK, typically charging fees well below the market rate by taking a “no frills” approach with a rigorous focus on education and no world class theatre or Olympic-sized swimming pool. One such school is the Independent Grammar School, Durham where a place costs £3,300 per year — a fraction of the cost of the nearby Durham School (£15,993 per year). This school was established in 2018 and offers places for pupils aged 4-13.
Other innovators have sought to establish more affordable private schools. In 2004 the New Model School Company was established to provide an “excellent, traditional education at as low a fee as possible”. It now has two prep schools in London educating almost 300 children and charging fees around £11,600 per year, some way below the typical £20,000 charged by leading London prep schools.
The argument is often made that more private school places, opened up to more parents, is a secret plot to undermine the state sector. But we badly need disrupters challenging orthodoxy and allowing parents to judge what makes for a good education. It’s fundamentally a question of where power lies. Making life harder for private schools might make for a good stump speech, but it is not the iconoclastic approach to education that would disrupt and challenge established thinking.
We should instead break up the private school cartel to allow new schools to open and undercut sky-high fees. That would be a more progressive policy, opening up more places, driving down the cost of independent schools and bringing them back into the reach of local parents.
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