Labour committed to ending VAT exemption for private school fees

The King’s Speech outlining the Labour government’s agenda has committed it to introducing measures to remove the exemption from VAT for private school fees.

Asked to comment on claims made by one Jewish charity that getting rid of the business rates exemption would “decimate (Jewish) schools”, a government spokesperson said Labour would now “engage a range of key stakeholders to discuss how the changes will be implemented.”

King Charles confirmed the inclusion of the Children’s Wellbeing Bill, as he outlined the 35 bills and draft bills contained in the King’s Speech.

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The promise to continue with Labour’s manifesto pledge to end the business rates exemption for private schools in order to fund the recruitment of 6500 extra teachers into the state sector will be met with sustained criticism from organisations and charities supportive of the independent sector.

Speaking to the Telegraph newspaper, Raisel Freedman of Partnership for Jewish Schools (Pajes) claimed:”Getting rid of the business rates exemption would decimate (Jewish) schools.”

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Freedman also suggested that some Jewish parents choosing private schools for their children would be plunged into poverty, and that some Orthodox schools charging only minimal fees would be forced to close down.

It is claimed that Jewish state schools are now over-subscribed, and that “thousands” of Jewish school kids could now be left without a place at their chosen schools.

But some experts in the community are critical of these claims. They suggest that some of the Jewish schools less reliant on charging fees, and more on charitable support could attempt to become voluntary aided or state schools themselves.

But this would leave ultra-orthodox schools facing government oversight over their curriculum, which many do not want.

Schools are also able to claim back VAT on other costs at their institutions, again reducting the impact of the new proposals.

Responding to the claims made by Pajes ahead of the King’s Speech, a government spokesperson said:”Education matters and is at the heart of our mission to break down barriers to opportunity so every child gets the best start in life.

“Ending tax breaks on private schools will help to raise revenue for essential public services, including delivering on our pledge to recruit 6,500 teachers.

“We will engage a range of key stakeholders from the private school sector to discuss how the changes will be implemented.”

Analysis by the independent Institute for Fiscal Studies (IFS) has shown that ending tax breaks on private schools will have negligible impact on the state sector.

Government figures also show that there is additional capacity in the school system. As of May 2023 83% of primary schools (nearly 14,000) had one or more unfilled places.

This rate has been the same since 2021 and maintains the highest rate in over a decade, reflective of the falling primary population.

For secondary schools, 77% had one or more unfilled place (nearly 3,000 schools), it is claimed.

The Department for Education also said it works to support local authorities to ensure that every local area has sufficient places for pupils.

This includes monitoring for narrow local areas where different pressures interact to create more demand than capacity and providing appropriate advice and support.