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VAT on fees would be nail in the coffin for small independent schools

Stephen Spriggs, Managing Director, William Clarence Education

When I read that Millfield School is reducing its fees by 10% and has urged other leading schools to follow suit claiming it’s ‘the right thing to do’, it made me wonder if it’s not the right thing but the only thing to do to survive.

Headteacher Gavin Horgan announced, graciously, in The Sunday Times that because fees ‘have risen at too fast a rate’ and ‘have priced the middle classes out of the market’, they are lopping almost £4,000 off the £38,000-a-year-boarding fees. He added that he wants ‘to make our education available to everyone, regardless of their background and financial means’.

It’s a wonderful gesture and I respect his sentiments but – and I have to be brutal here – if Millfield had a two-year waiting list would they be doing this? He’s right to say the middle classes won’t or can’t pay their fees but it’s not just because the classrooms (and I’m referring generally to independent schools here, not specifically to Millfield) are full of a certain type of child, it’s because they aren’t full at all. The classrooms have seats to spare and boarding houses are half empty.

To me this price slash is a drastic measure for a drastic time, and it’s being dressed up as something a little more altruistic. After all, a reduced £34,000-a-year price tag doesn’t suddenly make it affordable for ‘everyone’. A few more, yes, but not a significant number.

It also comes just weeks after it was announced that teachers from Eton, Wellington and Dulwich College – all top-tier independent school with excellent pedigrees and, one would imagine, long waiting lists – joined forces to launch an ‘affordable’ independent sixth-form for exactly the same reasons as Mr Horgan’s – to attract the parents who are well-paid but not exactly well-off.

However, co-founder and Eton teacher Joe Francis told The Telegraph that private schools had a ‘lack of imagination’ about affordability and were ‘living beyond their means’. This makes sense to me. There has to be more thought and flexibility put into keeping the schools afloat before cutting the costs.

In order to cast their net wider, what about making single-sex schools co-educational? Having boarding schools offer day places? Increase the number and variety of courses on offer? All these changes would make schools more attractive to more parents and suddenly the fees look like a much better deal.

Despite what you may think, these schools operate on tight margins. The upkeep costs are huge. Paying parents want their money to be reflected in a school’s resources so they expect to see state-of-the-art music studios, West End-standard theatres and full-size and fully equipped sports pitches. A drop in pupil uptake does not mean a drop in standards.

Millfield is an excellent school which boasts a horse-riding arena, golf courses and an Olympic-size swimming pool. It’s also the largest co-ed boarding school in Britain with 1,240 places to fill and every vacancy costs money.

Due to Brexit, we’re in a period of uncertainty. Some international parents are looking outside of the UK to educate their children at least until the dust has settled and the confusion subsides.

Parents with financial or work ties to Europe might be feeling nervous about what the future holds and are choosing to keep hold of their money in this transitional period, keep their children in state school and pay for extra private tuition if and when their child needs it.

I don’t think the top-tier schools will heed Mr Horgan’s appeal to follow suit and cut fees. Why should they if they’re over-subscribed? They need every parental penny to plough back into the school to ensure it remains one of the very best. The middle-tier schools and those outside of London might feel it is necessary to lower their fees and that will, no doubt, be welcomed by some parents.

However, I think this decision reflects a notable shift in the independent school system. In coming years, we’ll see schools merging or even ceasing to exist if the demand dries up.

And if Labour wins a General Election and commits to their pledge to make school fees subject to 20% VAT, that will be the final nail in the coffin for many smaller, mid-tier independent schools. I’m not sure if Mr Horgan has done the maths but, for me, the numbers just don’t add up.

Stephen Spriggs, Managing Director, William Clarence Education

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About William Clarence Education: The leading education advisory and consultancy service in the UK. With an unrivalled reach into the UK Schooling and University network, William Clarence offers unbiased advice to students and parents from around the world; at every stage of their academic journey.  From Independent School Application and Placement, full UCAS and University application consultancy, Oxbridge Applications  US College Admission and even Homeschooling programmes, William Clarence Education draws on a deep relationship driven network with schools, Universities and senior education figures within the industry.  By putting the student and family at the centre of the process, William Clarence ensures their clients reach their maximum potential and gain access to the very best of UK education.

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