A tax raid on private schools would attack social mobility
Should independent schools be forced to charge VAT on their fees? And is it unfair that many of them have charitable status, meaning they can claim tax relief on donations? Well, judging by what some politicians are saying, removing these tax benefits would be a useful way to increase funding for state schools. That might sound like a good way of creating a fairer society.
In fact, a tax hike on independent schools would be damaging for social mobility, and profoundly unfair. The international super-rich will be able to send their children to Eton and Harrow regardless of the tax situation, but for average families, independent schools are already a massive strain. My own experience is not uncommon: my older brothers went to state primary schools in the early 1980s, but the local secondary school was what would now be deemed a failing school. Given the lack of school choice then, the only choice for my parents wanting us to get a good education was to send us private. That involved my father doing a full-time job in the public sector and then running a business in his evenings and weekends to just about afford the fees. It meant family holidays were in a tent and the supermarket shop had to be carefully budgeted – but it meant we all got a good education.
The current unfairness is not that private schools get a tax break, it’s that parents have to pay twice: first for the state-provided education they don’t receive (through taxes) and second for the private education. Adding VAT to fees wouldn’t matter much to the super-rich but would prevent aspirational but less well-off families from attending independent schools.
We’ve already seen the damaging effect of the politics of envy on private schools. Through the 1980s and 1990s, independent schools had a large number of entirely state-funded pupils (34,000 in 1997) made up of “bright children from modest backgrounds” funded through the government’s Assisted Places Scheme. According to a 2013 report on the scheme by the Sutton Trust, the resulting social mobility has been significant: the pupils “have continued their upward trajectory in professional and managerial occupations and are now in relatively secure and satisfying occupations with high levels of earnings. From this perspective, the Scheme is an unqualified success and arguably reveals meritocracy at work.”
The abolition of that scheme took this success story away, hindering access for low-income families to attend independent schools. The sector has tried hard to replace the social diversity that the Assisted Places School provided by offering quite extensive bursary programmes. These are significantly fuelled by the charitable status of private schools, which encourage alumni to make donations. Yet these bursaries, too, are under threat from the political rhetoric which demonises charitable status as somehow a tax perk for the rich, when it is actually used to increase social mobility.
Arguably the main problem with independent schools in Britain today is that they are already too expensive. In competing with now improving state schools – thanks to academy and free school status – they’ve invested heavily in having the best facilities, which has led to an increase in fees. But there is an alternative model, shown by the Independent Grammar School in Durham, which offers private education at a cost of just £3,600 a year. Here the model is academic rigour but without all the frills, an idea that surely has a lot of potential for growth.
Nonetheless, private schools provide high-quality education that parents like, and they help children who would otherwise struggle in what might be a disappointing local state school get a better education. So why use public policy to cut the number of lower-to-middle income families benefiting from them?