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VAT on fees? Our greedy private schools have it coming

6 April 2017

8:31 AM

6 April 2017

8:31 AM

The standard conservative response to Jeremy Corbyn’s proposal to impose VAT on private schools would be to attack it as as a policy motivated by class envy and dreamed up to please his party’s levellers — except that Michael Gove, too, questioned private schools’ charitable status a few weeks ago. Private schools might moan and groan, yet they have invited an attack on their charitable status by shamelessly pitching their product at the children of very wealthy parents – an increasing number of them from abroad. By jacking up their fees relentlessly they have priced many middle-class parents out of the market

Where 40 years’ ago private schooling was an option for a huge swath of the middle class, years of inflation in fees have steadily squeezed out one profession after another. Since 2007, the average day school has raised its fees by 59 per cent – a 29 per cent rise in real terms. As for boarding schools, the annual fee for a single pupil would swallow the entire pre-tax income of many professional middle classes: Eton charges £37,062 a year and even that is topped by some smaller-profile schools such as Abingdon — at £38,625 a year.

In reply to Michael Gove, private schools drew attention to the £350 million in means-tested bursaries and other assistance which they say they offer to ‘disadvantaged’ pupils. But it is a demonstration of just how far they have drifted from the socio-economic mainstream that their definition of ‘disadvantaged’ now includes parents who are earning up to £120,000 a year – the level up to which pupils at £7827-a-term St Paul’s School in London are now eligible for help.

Private schools aren’t producing the same product as the state sector any more. In the state sector an average of £5212 is spent per pupil per year; £6275 if you include capital investment. In the independent sector the average day school now charges more than twice this, at £12,939 a year. Education is only part of their product; schools are pitching themselves as hotels, leisure centres and travel agents. Dormitories have been replaced with private en suites. Thanks to an arms race in facilities dedicated concert halls are now standard: 52 per cent of independent schools have them, while 29 per cent have a dance studio. Millfield has facilities for pigeon shooting, Charterhouse its own golf course. Sports tours to the Carribean and South Africa are par for the course.

When I asked the Independent Schools Council (ISC) why the private sector, seemed only interested in providing a premium product, costing on average twice what the state sector spends, I was told that independent schools “aren’t all Etons” and that I should speak to the head of Gosfield School in Essex “where fees start at £4500”. This turned out not quite to be the case: when I looked up the fees they were £4190 per term (£12,570 per year) for a Year 7 pupil and £5085 per term (£15,255 per year) for a sixth form pupil. There are bursaries available: but just three per year: one at 100 per cent discount and two at 50 per cent discount. Gosfield might not be Eton, but its website seems to be straining to say it is not far out of its league, boasting that it is “set in 100 acres of beautiful parkland’ with an ‘onsite, fully-accredited forest school”.

The head, Sarah Welch, seems not the least bit worried her school might be pricing itself out of the market; saying it is full of the children of “local businessmen and builders”. “We’ve got a lot of first-time buyers of private education,” she told me, adding that “we produce something of value that parents will budget for”.

Private schools have got away – so far — with charging what they do partly as a result of fortunes falling into the hands of some middle class families courtesy of inheritance and the house price boom. They are increasingly looking abroad, too. The number of oligarchs’ children isn’t as high as is often made out – 5.3 per cent of pupils are non-British and with their parents living overseas. Gosfield, for example, says it has only two overseas pupils. Yet the numbers of pupils from Russia and China in ISC schools has trebled in each case over the past decade.

Private schools, like London property developers, are falling for the temptation to position themselves shamelessly at an international market. Judged as a luxury lifestyle product, British independent schools perhaps come across as cheap to people who would happily spend a grand on a bottle of wine. It is only a matter of time before an English public school decides to compete head-on with the most expensive Swiss finishing schools, which charge up to £70,000.

But it is hard to see how the entire independent sector is going to get away with that approach. Sooner or later private schools are going to find themselves like the London property market now does: with an excess of luxury product to shift, and nothing affordable to offer local buyers. As Andrew Halls, headmaster of King’s College School in Wimbledon said three years ago: “We are in danger of coming across as greedy, because we can charge what appears to be limitless fees but in truth there is a fees timebomb ticking away. It feels like the build-up to the banking crisis.”

The independent sector may end up asking itself why, a decade ago when fees were already spiralling out of control, it didn’t stop and ask itself: how can we strip away some of these costs and compete in the mainstream market? Instead, it was left to Michael Gove’s free schools to take up the mantle. They aren’t interested in acquiring 100 acres of parkland. As Swedish free schools had shown before them, it is perfectly possible to offer a rigorous academic education in a disused office block. The new sixth form at Higham Lane, a free school in Nuneaton, is housed in premises built from secondhand Portakabins in six months flat, but that hasn’t stopped it becoming one of the top 100 best-performing non-selective secondary schools in the country.

Rather than lower school fees, the independent sector has hit on the idea of appealing for public subsidy. Last December, the ISC started lobbying for what it calls a Jointly Funded Places Scheme. This is a variation on the on the old Assisted Places Scheme, but where the government would only put in £5500 per pupil, with private schools offering a bursary to cover the rest of the cost. “We are already in a situation where the government funds places at some schools, such as Chetham’s Music School in Manchester,” says Julie Robinson, secretary general of the ISC. “This would provide extra school places at no great cost.”

But why should the government bother with part-funding 10,000 places at private schools when it has a free schools programme which is helping raise standards for millions? Free schools have become the budget schools that the independent sector failed to develop. They are in many ways they are themselves independent. They offer a far greater choice in educational approach than has previously been the case, and they are part of general increase in standards in the state sector.

Educationally, the independent sector is beginning to struggle to present itself as value for money. For years, private schools have been able to brag about being top of academic league tables (apart from those which refused to publish their results) Of the top 20 schools at A level, 16 last year were independent schools (two were academies, one a free school and one a community comprehensive). But this is about to be blown apart by the government’s move towards measures, like Progress 8, which judge school performance by how well pupils have advanced from a baseline of ability, not on their exam results alone.

A study by Durham University last year compared GCSE results from state and independent sectors, taking into account assessments of children’s abilities from the age of four. Taking an average of each pupil’s best eight GCSEs it found that results for independent pupils were just under two grades higher. Yet this disguises the fact that independent schools are selective – both formally through entrance exams and informally through social selection. Independent school pupils tend to be more able when they start school. When previous academic performance was taken into account the difference shrunk to 0.64 grades.

This is still a significant difference: the study concluded that by GCSE private school pupils have effectively made an extra two years’ progress. But given that the pupil/teacher ratio at private schools (8.7:1) is only half that of state schools (17.1:1) there ought to be a pretty impressive difference. Moreover, one wonders how much of those extra grades have been fairly won, and how much is the result of greater pushiness on the part of private schools. According to Ofqual, independent schools challenge one in eight grades at A levels – nearly twice as many as state schools do. Even more worrying, a study by the Today programme last month revealed that 20 per cent of independent school have been granted extra time in public exams as a result of supposed special educational needs, compared with 12 per cent of state school pupils. Given that independent pupils start from a higher baseline level of achievement, it suggests something deeply wrong. If private schools are tailoring pupils’ education to take account of limitations in their ability to learn that is one thing, but for schools to win extra time in exams on the basis of supposed disabilities which the schools themselves have themselves diagnosed reeks of sharp practice – and will surely have to be tackled.

Schools deserve to be judged – and will be judged by most parents – according to what value they add to children’s academic education. Many independent schools have set standards on this, and have helped the state sector raise its own game.

But how much stronger the independent sector would be in had it competed in the mass market for education, not just pitched itself at the top end. If private schools want to offer something more than education, and lure the children of the wealthy with fancy facilities, en-suite bathrooms and the other accoutrements of a five star hotel, that is fine. But it is education which is the charitable activity, not the provision of a luxury lifestyle. If this or a future government decides to tax private schools on the basis of their luxuries, the independent sector will have no-one to blame but itself.

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