Private schools should “reflect on where they could be making savings” so they can cover Labour’s proposed VAT on their fees for parents, Bridget Phillipson has said.
The shadow education secretary also revealed that Ofsted reform and moves to ensure a “broad and balanced” curriculum would be among her first priorities in the role of education secretary.
It emerged yesterday that Labour has scrapped plans to remove charitable status from private schools, but will still charge them VAT at 20 per cent and end business rates relief.
Phillipson was quizzed about her plans on a Mumsnet webinar this morning.
She said private schools “are not required to pass on VAT to parents and I think could choose to make different choices themselves about how they offer different kinds of provision”.
Although VAT-registered organisations must charge VAT on the goods and services they sell, Labour clarified that Phillipson was suggesting that fees could be reduced so charging VAT did not result in a net increase.
“Everyone in recent years, has had to make cutbacks,” said Phillipson. “Many of the people that are taking part in this discussion will be facing difficult choices every day about what they can and can’t afford the middle of a cost of living crisis.
“And I think private schools are no different. And perhaps they should reflect on where they could be making savings too.”
‘VAT is a tax on parents’
But Julie Robinson, chief executive of the Independent Schools Council, said VAT was “a tax on parents: schools would be legally required to put VAT on their fees under Labour’s policy”.
While schools will continue to work hard to keep fees affordable for parents, unfortunately, the result of Labour’s tax on children’s education means that many schools will be forced to increase fees despite their best efforts.
“Each school will make their own decision on fee levels, based on their parent base, school finances and other factors such as ensuring pay rises for teachers.”
Asked about confusion over the policy and yesterday’s change, Phillipson said she had “always been focused on how we end the tax breaks and how we then use that money to deliver high standards in our state schools”.
“And ending charitable status was not a necessary part of doing that. We can press ahead with ending the tax breaks relatively quickly, and then put that money into delivering better outcomes for children. So the policy is unchanged in that regard.”
‘Ample space’ in state sector
Critics of the policy have warned it could lead to an exodus of private school pupils into the state sector.
The government has previously used a figure of 90,000, which is from 2018 research commissioned by the Independent Schools Council. But the Institute for Fiscal Studies estimated up to 7 per cent of pupils could leave, working out at around 41,000.
Phillipson also pointed to a “demographic shift across our schools”. Pupil numbers are due to fall by 12 per cent over the next decade.
That means “we’re in a position now where…schools are reducing their rolls or taking out classes or in some cases, schools are closing because that demographic change that we had earlier on around the turn of the century is now is now kind of feeding through”.
“So there is ample space.”
Ofsted and curriculum reform a priority
Labour has set out a raft of education policies alongside its plans for private schools.
Phillipson indicated this morning that plans to reform Ofsted by replacing graded judgments with report cards on schools’ strength and weaknesses and an annual safeguarding audit, and reform to the curriculum would be among her priorities in government.
She said there would be “tough choices because the economy’s in a total mess, that we haven’t seen growth in any meaningful way for years and years now”.
“And that will mean it will take us time to deliver everything that we would want to do and we won’t be able to do all of those changes from day one.”
But she said in education there was “actually quite a lot I believe we could change that isn’t just about spending more money”.
“Whether that’s reform of Ofsted as one example, some of the wider changes around curriculum I want to see in our schools, all children having access to a broad and balanced curriculum that includes music and sport and much more besides.
“So where we’ve got plans to spend money, we’re clear about how we’re going to fund it. but alongside that, I believe there’s a lot of change that we could make very quickly if we won the trust of the British people and formed that next government.”