Scottish independent schools have “little to no ability” to absorb VAT on school fees, the sector’s representative body says, because of the removal of business rates relief in 2022 and “significant increases in the cost of employing teachers”.
If the VAT policy is to go ahead, “the only financial lever open to most schools in Scotland” would be “to reduce staffing levels of both teaching and non-teaching staff”.
The warning of job losses in the private sector comes from the Scottish Council of Independent Schools (SCIS) in its official response to the UK government’s plans to put VAT on school fees from January.
The body - which represents 69 independent schools in Scotland, 20 of which are specialist schools for children with complex needs - also criticised the UK government’s decision to bring the implementation date of the policy forward from around the start of the new school year in September 2025, as originally indicated, to January 2025.
The move, outlined in the SCIS response to the UK government’s consultation on VAT on fees, will put “more jobs at risk” and more schools at risk of closure, the submission states.
‘Several factors’ behind recent school closures
VAT on fees was “one of several factors” which led to the recent decisions to close Kilgraston School in Perthshire and Cedars School in Greenock, SCIS says.
The schools were “already struggling with the higher operating costs”, SCIS adds, but “the looming 20 per cent increase in fees” led to a “sudden reduction in the school roll” and “rendered them unviable”.
It is also warning that private schools could be forced to withdraw from the Scottish Teachers’ Pension Scheme. It says this would “negatively impact on the pension provision for teachers in the state system, as a result of fewer members paying in to this unfunded scheme”.
SCIS also warns about the impact on pupils: introducing the policy midway through the school year “will lead to the maximum level of disruption to pupils’ education”, particularly on “those in receipt of financial assistance”.
It says: “Requiring these families to pay an additional 20 per cent in the middle of a school year, will leave them with the choice of removing their child midway through an academic year or going without basic essentials in order for their child to complete the 2024-25 academic year.”
Drops in school rolls reported
Some independent “city-centre day schools” are reporting a drop in their school roll of 4.5 per cent and the numbers signing up for school open days are “50 per cent below usual numbers in some parts of the country”.
However, the body questions whether there are places in the state sector for independent school pupils in “many parts of the country”. It reports: “Most notably, in Edinburgh, Glasgow, East Dunbartonshire, East Renfrewshire and Aberdeen, families are being told there are no places available at their catchment area school for their child’s year group.”
SCIS adds: “This is particularly the case for those in exam years.”
Its submission states that pupils forced to withdraw from their private schools have been told that “as many as the nearest seven state schools are full for their year group”.
SCIS is calling on the UK government to:
- meet directly with representatives of the Scottish independent schools sector to better understand its operating environment
- exempt from VAT any independent school pupil forced to leave the sector for financial reasons who cannot be placed in their nearest two state schools, and any pupil in the senior exam phase who cannot continue with their chosen subject or curriculum in the state sector
- consider the mental health aspects of the policy more fully and also to exempt any child who has suffered an [adverse childhood experience] or who has additional support need to be exempt from having VAT added to their fees
- not impose VAT on the fees of bursary recipients for the lifetime of this UK parliamentary term
- exempt from the VAT charge children in specialist school settings whose fees are paid by their family or through Scottish government grants.
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