It’s the season to do the rounds of senior schools and my 10-year-old son and I have been jostling through the crowds to glimpse science labs and drama workshops for the past month. Open days for the top state schools have been heaving. At a state boarding school rated ‘outstanding’ by Ofsted (boarding fees aren’t subject to VAT), the head apologised for lengthy queues to register, get coffee, join a tour. Another 200 people had turned up in addition to the 600 booked in. Among them, I spotted several families whose children are currently at local prep schools.
Labour starts charging VAT on school fees from January. But an estimated 10,000 children have already been taken out of independent schools, mine among them. Data collected by the Independent Schools Council (ISC) found a drop in pupil numbers by 1.7 per cent between September 2023 and the beginning of this term. The starkest drop was at the Year 7 transfer point, with a 4.6 per cent fall in the number of children starting at private secondary schools.
When we were shown around the prep that my sons attended briefly, the head boasted that ‘We’re an all-Steinway school’
This ‘is just the tip of the iceberg’, warns Julie Robinson, chief executive at the Independent Schools Council (ISC), as most parents will do ‘anything they can to get to the next transfer point’ before pulling their child out of the system.
The hardest-hit are not the big public schools that Labour’s ‘rhetoric is pointed at’, she stresses, those with foundations and endowments, but small schools with under 300 pupils. These are parents – often with borderline special needs children – who pay fees termly out of their dual-taxed income, not family money. ‘It’s not about social cachet or status, but what’s right for my child,’ she adds.
At least one such school, St Joseph’s Prep in Stoke-on-Trent (fees £3,415 a term, about half that of the average private school), is to close at the end of the year because parents cannot find the additional 20 per cent. The ISC estimates it will cost the Department for Education an extra £92.8 million this school year to educate these additional children coming into state schools. Education Secretary, Bridget Phillipson’s latest statement – ‘our state schools need teachers more than private schools need embossed stationery’ – seems to confirm that the policy has political gain, and not children’s needs, at its heart. ‘It is nothing to do with tax or education’, says Ralph Lucas, editor-in-chief of The Good Schools Guide and a hereditary Tory peer who often speaks on education in the House of Lords, ‘and starting in January is sheer cruelty’.
But Lord Lucas – who has warned of what he calls ‘boiling the frog’ of fee inflation – says the sector (specifically the top end) has brought this on themselves. ‘When I was young, your average doctor or country solicitor could afford an independent school,’ he says, ‘so could a journalist or an MP. So they’ve lost their constituency – how many MPs, even in the Conservative party, are out there defending private schools? Very few. Because they’ve become unaffordable.’
Why? Because ‘parents like the frills’, says Lucas, and the top 100 or so schools with fees over £40,000 a year have thrown themselves into an arms race for the best facilities. When we were shown around the prep that my sons attended briefly, the head boasted that ‘We’re an all-Steinway school’ and I winced. Astroturf pitches, en suite bathrooms in boarding houses, all-weather riding arenas… you don’t need particularly left-leaning sensibilities to find this sort of privilege – and the associated fees – distasteful, verging on obscene.
To make matters worse, Labour’s VAT changes allow schools to claim back the tax they spent on capital project over the last 10 years. The more a school spent on swimming pools and Steinways, the larger the windfall they’ll be able to claim in January. Once again, the small private schools suffer.
From January, Eton will pass the full 20 per cent onto parents, putting fees up to around £63,000 a year. New joiners to the sixth form at Cheltenham Ladies’ College will pay £61,740. When you consider that a newly-qualified consultant in the NHS earns £74,000, this starts to look like a form of crass conspicuous consumption – up there with Saddam Hussein’s gold bathroom.
Top public schools are likely to remain oversubscribed and weather the VAT storm, but elsewhere in the sector, the policy is already having a ‘profound effect’, says Danny Boswell, bursar of Downside (boarding fees currently £43,470; VAT in full to be passed on to parents in January; definitely ‘do not have embossed stationery’). In September, pupil numbers dipped under the 300 mark. ‘We’ve seen a 20 per cent drop in numbers over the last two years,’ Boswell discloses, ‘ever since it became apparent Labour was going to win and do this’.
With private schools haemorrhaging pupils, might parents expect a reduction in fees? With the sector also set to lose its 80 per cent charitable business relief rates from April 2025, don’t hold your breath. While a few schools (Giggleswick) have said they’ll absorb VAT, most are having to pass at least a proportion on; fees across the 23 Girls Day School Trust schools will increase by 12 per cent.
At Downside, all Boswell can offer is ‘hopefully’ avoiding an annual fee increase next September. ‘We are making significant sacrifices,’ he says; avoiding redundancies but not replacing staff who leave and cutting down on ‘the really transformational bursaries of 100, 110 per cent we offer to the poorest children’. Going after more international students isn’t ‘a magic bullet’, he points out – as their fees are about to go up by a fifth, too (though I see from the school’s Instagram account that the head has just been on a trip to Lagos to court new pupils).
With private schools haemorrhaging pupils, might parents expect a reduction in fees?
Lord Lucas says fees have got to come down and private schools can do this by increasing class sizes. Surely this would remove their USP? ‘Schools have sold themselves on small class sizes being better for your child,’ he says. ‘It isn’t true — and schools know that it isn’t true.’
But as Lucas, an Old Etonian, points out, if you’ve got a good state school as an option, ‘why wouldn’t you?’ (His children started at private schools in London, switching to state when they moved out and ‘thrived’.) I’ve been hugely impressed by the largely non-selective secondary schools we’ve looked round: impressed by the numbers off to Oxbridge and medical school, impressed by the GCSE grades, the team sports, orchestras, music tours. Things have improved dramatically since I endured what Alastair Campbell would have called a ‘bog-standard comp’ in the 1990s.
There is a sector of society that is scared of state schools – in the way that some people are scared of the North of England. Now, accepting that their parents’ generation was the last to afford school fees, they are going to the other side – and are pleasantly surprised by what they find. ‘It takes a lot to break the mould, having been privately educated,’ says one mother, whose daughter moved at 11 from a prep school to Midhurst Rother College in West Sussex, part of the United Learning group. ‘I have been blown away: we are experiencing more work, stricter rules, plenty of sport… and I can now afford the geography field trip to Iceland and every other extra I’d have had to say “no” to at private school.’ Let’s hope, then, that Bridget Phillipson has done her sums – and all that non-existent embossed stationery can be converted into the 6,500 more teachers Labour has promised – and quickly.
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