Sir Keir Starmer said this week - at his first Prime Minister’s Questions - that he would not apologise for his plan to impose VAT on independent schools, after being told by Edinburgh West MP Christine Jardine that this would put state schools under pressure.
The Liberal Democrat MP said City of Edinburgh Council had produced five-year projections showing lack of capacity for pupils who may leave the independent sector.
Yesterday, however, the council said it had room for a further 12,700 pupils in its schools.
Here’s what you need to know about the possible impact of the Labour plan in Scotland:
Why is Labour planning to introduce VAT on private school fees?
The 2024 Labour general election manifesto promised to “end the VAT exemption and business rates relief for private schools to invest in our state schools”. It said the party planned to recruit 6,500 new teachers, “paid for by ending tax breaks for private schools”. Labour estimated that the change would raise around £1.5 billion a year, ringfenced for reinvestment into state education.
In Scotland business rates relief has already been withdrawn for independent schools - the Scottish government introduced the change, which was expected to raise £5 million to 7 million, in 2022.
And while UK government education policy generally does not directly affect Scotland, the VAT exemption - which could be introduced as early as January - is a different matter.
What are Scottish independent schools saying?
The Scottish Council of Independent Schools (SCIS) says the move will ”disrupt the education of thousands of children in the independent sector and place a significant burden on the state sector”. Lorraine Davidson, chief executive of the SCIS, makes the case for the UK government “working with the independent sector, rather than against it”.
The SCIS argues that families only just able to afford private education could be forced into the state sector by a hike in fees when VAT is applied.
A report commissioned by the SCIS and published in February estimated that £51 million would be raised through the move in Scotland - considerably lower than the figure cited by Labour politicians.
At the EIS teaching union’s general election hustings in June, Pam Duncan-Glancy, Scottish Labour’s education spokesperson, claimed that £100 million to £120 million would be raised, enough to employ 1,800 teachers in state schools.
However, the SCIS report, by Biggar Economics, warned of a potential 13 per cent drop in the private sector’s school rolls (3,190 pupils) that would “more than wipe out the gains in revenue from VAT”.
A report published in 2018, when the introduction of VAT on private school fees was first proposed, found that 10.7 per cent of pupils were likely to be withdrawn by the end of the first year of VAT being introduced, with a further 6.4 per cent drop-off over the next four years.
The report was from Baines Cutler, a company that is expert in independent school financial benchmarking. It now states that “whilst time has moved on since then”, it stands “fully behind this research and its conclusions”.
However, the Institute for Fiscal Studies suggested in 2023 that the number of pupils leaving the private sector to attend state schools would be “small”.
Why the focus on Edinburgh?
The city has a high concentration of independent schools (the council estimates 15 per cent of pupils attend them, although the reported figure is often higher), and some fear the impact of an influx of pupils into the state sector.
During PMQs on Wednesday, Ms Jardine said: “Edinburgh City Council, led by the Labour Party, have produced five-year projections which show we do not have capacity in the city to accommodate pupils who may leave the independent sector.”
However, in a statement yesterday the council said it had extra space in most schools.
Joan Griffiths, the council’s education, children and families convener, said: “With the extensions we’re making to some of our school buildings and the new campuses we’re planning to build, we don’t expect many of our secondary schools to hit capacity in the next decade.
“Plus, we believe secondary school rolls across the city will slow because primary school rolls are falling. Our latest projections show we have capacity for a further 12,700 pupils in our schools, but we’ll continue to keep this under review.”
Are Christine Jardine’s figures wrong, then?
The council says that, in April, it published a report featuring revised school roll projections, with newer figures than those highlighted by Ms Jardine.
In West Edinburgh, which she highlighted, the council says rolls are expected to continue to rise in some schools (most notably Craigmount High and Queensferry High) because of new housing. However, both these schools are due to be extended to accommodate growth.
The April report acknowledges that - while rolls are falling in primary and expected to peak in secondary in 2029, if not sooner - “local issues” present a challenge when predicting rolls, including “potential for increases in school capacity which may be required in the future if VAT is added to school fees in the independent sector.”
What was Starmer’s response to fears over state school rolls?
Starmer said: “I do obviously understand the aspiration that parents who work hard and save hard have for their children that they send to private school. But every parent has that aspiration, whichever school they go to.
“And I am determined that we will have the right teachers in place in our state secondary schools to ensure that every child, wherever they come from, whatever their background, has the same opportunity. And I do not apologise for that.”
The prime minister did not explain how he would prevent the policy from having unintended consequences for some state schools; neither did he respond to the second part of Ms Jardine’s question, on whether VAT raised in Scotland might be reinvested in “already hard-pressed Scottish education”.
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