Stephen Webb is a former senior civil servant
The Labour government has kicked off the process of introducing VAT on school fees, with fees due to be imposed from January.
There are a lot of objections to this policy.
There is a question of consistency; education providers have always been exempt from VAT, and the Treasury has already admitted hastily drafted legislation may accidentally have caught universities in its net.
Labour has already made one concession, stating that children with an education and health care (EHC) plan who are placed in private schools because of a lack of facilities in the state sector will not pay VAT on their fees. The rate of EHCs has rocketed since they were introduced in 2014 – up more than 26% between 2022 and 2023 and nearly doubling since 2019. The VAT policy now provides a further incentive for more parents to secure one.
The arguments about the tax take and the impact on the state sector have been covered exhaustively – though the fact that state school rolls are falling fast suggest the cost of educating additional pupils in the state sector could be fairly marginal.
There are four primary schools and one secondary school slated for closure within two miles of my house.
The decision to target private schools is of course a sort of Brexit benefit. It would have been illegal had we remained in the EU or even in the single market, as Keir Starmer was pressing for until recently, and provides an additional complication should Labour seek to rejoin the single market in future.
Much is made of the risk that this tax move will finally push out middle class parents who are struggling to do their best for their children.
This would be a more convincing argument if the private schools themselves were not in the process of doing the same. School fees have increased by 24% in real terms over the last decade, and by 55% since 2003. There is a sense in which private education, particularly at the top end, is a ‘positional good’ for which demand is highly inelastic and price increases remorselessly – a similar pattern to that seen in Ivy League colleges in the US.
Given how much parents spend on private education, the evidence for its long term benefits are surprisingly contested. Research from the 60s and 70s saw little evidence of attainment benefits once the children’s environment was properly controlled for. More recent research based on children’s performance mainly in the 2000s has suggested a modest increase in attainment here and here.
Controlling for the variables is complex, however, and the richest and most recent source of data are the Progress 8 scores produced by the Department of Education. These measure the ‘value added’ a school is providing by comparing the average progress pupils make from the SAT Key Stage 2 tests taken in year 6, the final year of primary school, to the GCSE results attained in year 11.
Progress 8 scores have uncovered stark differences in performance between state schools. Interestingly, and perhaps revealingly, independent schools have not chosen to participate in the process. Only a small minority of independent schools participate in the Key Stage 2 tests at all.
But pretty much all independent schools have a very large cohort, perhaps the majority, who have joined them from state primary schools. If private schools are really adding significant value, logically this should be most visible among pupils who have come from the state sector into the private. I am willing to be corrected, but I haven’t been able to find a single private school that reveals its Progress 8 scores.
Alternative measures like absolute exam results are misleading given the level of attainment that pupils entering the schools probably have, and the greater freedom schools have to encourage the removal of pupils who are not performing to expectation.
The lack of evidence of progress isn’t perhaps surprising. The obvious differences between private and well run state schools are the pupil/teacher ratio and the quality of facilities – though schools will also claim quality of teacher. There is no real evidence facilities make a difference to attainment, while the former has been exhaustively studied and NESTA has concluded improving the ratio represents very poor value for money.
Advocates of public schools tend to stress wider social benefits. Interestingly there is some evidence on mental health that the impact can be negative, particularly for girls. Anecdotally, private schools were notorious for the high rate of eating disorders, and more recently gender dysphoria seems to be particularly common too among privately educated girls, though neither the private schools themselves nor academia seem very interested in reviewing this area rigorously – the former for obvious reasons, the latter to avoid giving credence to theories of ‘contagion’ perhaps.
Indeed, private schools have been among the keenest to promote ‘woke causes’ whether BLM, Extinction Rebellion or gender ‘allyship’. A cynic might suggest that concentrating on all kinds of other ‘privilege’ helps distract attention from the main advantages private school pupils really have over the rest of the population.
The Labour policy is likely to accelerate further trends that private schools have themselves started – the schools will become even more expensive and elitist, though this time the additional fees will not be available to be invested in facilities, but will accrue to Government.
At some point the gulf will become so big you might expect to see a low cost private alternative emerging to serve parents who are not satisfied with the state sector but are never going to be in the price bracket of the current schools. The failure of this to emerge may be an indication that claimed improvements in the state sector over recent decades are real enough after all.
