'VAT on our school puts us at considerable risk of closure': Private school principal's letter to Labour's Sir Keir Starmer

12 June 2024, 08:21 | Updated: 13 June 2024, 08:14

Sir Keir Starmer speaks with pupils as he visits Whale Hill Primary School, June 11, 2024
Sir Keir Starmer speaks with pupils as he visits Whale Hill Primary School, June 11, 2024. Picture: Getty

By Charlotte Frawley

'The impact of VAT on our school puts us at considerable risk of closure,' says Paul Norton, the principal of Kings Monkton School in Cardiff, Wales.

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Dear Keir Starmer,

On behalf of Kings Monkton School, I want to express our concern at current proposals to charge our parents VAT on fees. I contacted your colleagues in Wales from the Labour Party in January and again on the 5th March, but received no reply to my concerns, or was referred to Westminster. Independent Plaid Cymru, Rhys ab Owen (South Wales Central), kindly raised my questions in the Welsh Assembly on the 24th January and received the following:

Rhys ab Owen (South Wales Central): What assessment has the Minister made of the impact that charging VAT on the fees of independent schools which specialise in supporting children with additional learning needs would have? (WQ90505)

Jeremy Miles: Officials have discussed this, and other issues, with the Welsh Independent Schools Council. Issues around the charging of VAT are reserved to the UK Government.

Unfortunately, despite many attempts to raise this issue for discussion with your party, no one has responded to my requests to meet, visit our school, or listen to an alternative viewpoint on your proposed policy.

VAT on independent school fees is a tax on parents. This would be detrimental to our whole community – our pupils and parents, colleagues in the state sector, and the wider school community. Kings Monkton School is a specialist mainstream school for children aged 3-18. We are a small, family run school, that specialises in supporting children with Additional Learning Needs such as Autism, ADHD, Dyslexia, Dyscalculia and Dyspraxia. Our children are not only funded privately by our parents, but we also receive Local Authority funded children from Vae of Glamorgan, Cardiff, Caerphilly, Newport, Torfaen and Bridgend.

Read More: Labour refuses to rule out introducing VAT on private school fees mid-academic year

Read More: ‘Scaremongering’: Labour denies ending ‘tax breaks’ for private schools would pile pressure on state school places

VAT would inevitably make our education unaffordable for some parents, and risk them having to leave the school. This would cause serious disruption for the education of those children involved, and this burden would fall on the parents who work the hardest to support their choice of school. It would be especially challenging for pupils who have failed to flourish in the state sector and have come to our specialist provision at great cost and sacrifice to their families.

In turn, this will put pressure on local state provision. We share a commitment to a well-funded state sector, a vision which would be harder to achieve if more funding were required to support pupils who have moved into state schools. I started my career in the state sector and spent 20 years working in leadership and senior leadership before I moved to the independent sector. As such, I have a good understanding of the demands and challenges faced by staff in this sector and my move to the independent sector was fuelled by the knowledge that I could not offer such a bespoke provision to vulnerable children, who were effectively being failed – through no fault of the staff – by the system they were in. Many of the children that come to us, and are funded by both local authorities and parents, do so because there are no places that can meet their needs in our state sector in Wales.

The movement by your Welsh Labour Assembly to end our status as an SEN school means that all schools who offer SEN support to children in Wales will succumb to the VAT fee increase. This puts us at a considerable disadvantage when compared to schools in England. I have written to the Children’s Commissioner for Wales and raised this as a concern as it fundamentally undermines the UNCRC and rights of the child. She has yet to respond, and I would welcome your thoughts on this as well.

We are proud of our place in the community, and always looking to do more to work in partnership with state-sector colleagues and to improve educational provision for all. We work closely with NEETS and the Local Authority to offer external candidates a test centre for their external examinations – the only one in South Wales. We work with local primary schools to develop STEM activities and share our passion for science, as well as conducting creative writing sessions.  We support our local community by offering music lessons every night and on weekends; running the South Wales Music Festival; holding Indian community events on weekends such as Indian Theatre, dancing and food tasting. We work with Crisis to support homeless people around Cardiff through food banks and food drops in the city centre. I am also a trustee of KIRAN, that works in partnership with the school to support education, tolerance and knowledge of different cultures, teach English as a second language to refugees and share the diverse heritage that makes our City of Cardiff so unique. Every weekend we open up for South Wales Education to run their Mandarin sessions for members of our community, as well as provide a base for Cardiff Players and Kinetic.

We are also ambitious to make ourselves as accessible as possible to the local community, including through our bursary programme, where we support pupils from low income households with a bursary on top of any scholarships they may obtain through our scholarship examination process. This can mean that families can benefit from fees which are as low as 10%-50% for their children. We are not a charity, but a not-for-profit school and so the financial effects of VAT will undoubtedly make this work more difficult.

Alongside all of this work, we are proud to be economic contributors to the local community – both through our employment and through our supply chain. Our small school:

•       Pays over £2.5 million into annual wages for adults in our local community.

•       Contribute over £3.5 million to our local GDP

•       Spend over £500,000 on local services and businesses.

•       Support 122 jobs locally and pay tax of over £1.7 million a year.

•       Save the taxpayer over £1.6 million in state school places not taken up.

We would have very much like to have shown you or your colleagues around our school and have the opportunity to talk to you about our commitment to the local community, and the risks posed by tax changes. Unfortunately, no one from the Labour Party took us up on this offer.

On the 7 March, Conservative AM Andrew RT Davies did visit our school and take an interest in our story and concerns. During that visit we were blew to share with him that, as a school of 290 pupils, we make up around half of the independent schools in the UK, with one quarter of such school have pupil numbers of less than 155. Within our community of small schools, we contribute £16.5 billion to GDP and have 10337 of pupils identified as having SEND (18.6%) with 9620 pupils paying no fees. This is not the generalised and populist image of Eton, or other such large, selective private schools.

Kings Monkton Schools contribution for 22/23 can be seen as:

Total income financial year 22/23 £5,449,936.34

ALN Charges £99,7435.99 (No VAT on ALN paid for by the local authorities)

School Fees £4,216,948.94

Other income (transport, catering, wider markets) £23,5551.40

VAT that we would have to pay and recharge back to parents estimated at c.£890,000. We would be able to recover around c.£220,000 of VAT payments to our suppliers, which would give a Net income to the government of around c.£670,000 (22/23)

[Equivalent to 85.82 pupils in state education]

(School Funding Statistics. https://explore-education-statistics.service.gov.uk/find-statistics/school-funding-statistics)

Our school makeup is very comprehensive, with 65% of school fees paid by parents, with 66.7% of our parents having a household income of between <£25,000-£74,999. The image being portrayed of private education families, earning large salaries, making the choice to send their children to elitist schools is wrong and very skewed. Our parents are middle class, hard workers, who chose our school because there is no alternative in the state sector.

The impact of VAT on our school puts us at considerable risk of closure, as it does for the other small school like ours. The logic behind this decision is financially flawed and I welcome your views on how the possible closure of our school makes any kind of economic sense.

If our school closed, the loss to GDP would be £7,751,723, with the loss of 193 supported jobs. HMRC would lose Tax payments of £2,137,799. All this for a VAT payment of c£670,000.

As well as this, the ‘cost’ of pupils moving to state school would be an additional £1,950,831, even if the schools in this area had places for our children.

I apologise for the length of this letter but, as you can see, I have been attempting to engage your party and colleagues for the past six months in this discussion. Unfortunately, I have been unsuccessful and with your recent confirmation of VAT policy on school fees – a tax on parents – I felt I must reach out to you and share my concerns. I would welcome your thoughts on my questions above.

Yours sincerely,

Paul Norton

For and on behalf of Kings Monkton School

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