“Labour must commit to a comprehensive review of private education”

Alpesh Maisuria

The problem of unfairness in the education system is now unavoidable. Labour must initiate a comprehensive review of the role of fee paying private schools. 

This should include the creation of an Office for private schools’ accountability, to monitor their public benefit and loss to the public.

In terms of a review, taxation must be a priority. Fee-paying private schools currently exploit a loophole exempting them from VAT on school fees. There is an oddity here: these schools are effectively run as private businesses, but enjoy special privileges from the state that other businesses do not.

The pendulum would shift with the introduction of VAT on school fees, and it would be state schools that benefit.

With VAT at 20 per cent, there is an anticipated minimum of £1.75 billion that would be collected, a sum more than four per cent of the schools’ budget. This income would negate the cost of absorbing around five per cent more children in state schools.

The introduction of VAT has to be understood in the context of private schools paying just £44 million in business rates and corporation tax combined (2017), which is a massive “loophole” given their income of £7.83 billion.

Furthermore, the private schools’ lobby claim that private schools save taxpayers money; create a net wealth for the country’s economy; and that the cost of integrating private schools into the state set-up would practically and financially prohibitive. Unfortunately, it seems that a certain untruthfulness is often at play.

Take for example an eye-catching front page headline in The Times: ‘Fee-paying schools ‘save the taxpayer £20 billion’. This is claim was dismissed by Full Fact, who show the calculation is miscalculated and/or designed to mislead.

In addition to VAT exemption, as charities, many private schools are exempt from corporation tax and almost all local taxes on property, but there is little stipulation beyond the general requirement: for free or subsidised access/places; developing links with grant making trusts so as to provide free services; lending equipment staff or facilities; and allowing state school pupils to attend certain lessons or events.

However, are these generous general requirements enough to satisfactory their public benefit requirement, as charities?

There needs to be much more accurate and transparent reporting about private schools’ financial and social cost and benefit to the public, especially accruement from imposing VAT and removing charitable status.

This would be the objective of a comprehensive review, which could be undertaken by a Social Justice Commission (SJC) – tasked with advising Labour on integrating private schools, either fully or partially, into a National Education Service.

These changes would be long-term. The education system in the UK is complex because it is significantly stratified and differentiated. It is stratified because there are fee-paying selective private schools that are generally exclusive, and then there are the second stratum of schools that consist of state selective and comprehensive schools.

Importantly, within each of these two, there is significant differentiation among the schools. For fee-paying private schools, hierarchy can be discerned by fees, which range from £12k-£17,800 (the latter being the average ISC schools fee) up to £42,501 (Eton).

Taxes could be introduced progressively in bands to account for differentiation.

Progressive taxation could also be introduced to break the feeder system of schools that entrench privilege through the pre-prep and prep schools’ network.

These schools are a pipeline to elite universities. To break this cycle of unfairness, progressive taxation could be extended to higher education in the form of university contextual admissions through levying a progressive admissions quota on universities.

One option here could be that the lowest ranked Russell group universities could admit a maximum of seven per cent of privately educated pupils to represent the same proportion of private school students as in the wider secondary school population, and the higher ranked to be able to progressively admit a lesser percentage.

Similarly, regulation and incentives around employing teachers could be introduced. For instance, consideration could be given to progressively incentivising private schools to employ state-educated teachers, the corollary would be to incentivise the privately-educated to teach in state school.

Such measures will likely mean that some private schools would game the system to pay lower taxation, some may even become fully state maintained, and a small minority would increase their fees to stay competitive in the exclusivity stakes. In the absence of an outright abolishing, these measures would rebalance the education system.

The proposal of a National Education Service (NES) has an important prefix – “towards”, and the introduction of VAT to private schools fees ought to be the embryo for bigger changes to address unfairness.

In conclusion, a comprehensive review is needed for strategic short- and longer- term planning to create more egalitarianism in and through the education system. The review agenda could include, among others:

1. creating a robust, accurate, and transparent reporting framework for private schools’ financial and social cost and benefit to the public, especially accrued from imposing VAT and removing Charitable status.

2. exploring the feasibility of progressive taxes, regulation, and incentives to break entrenchment of elitism and privilege.

3. creation of an Office for private schools’ accountability to monitor their public benefit and loss to the public.

Ultimately though, it must countenanced that a reformist ‘softly softly’ approach will not do, and a more strident revolutionary approach is needed to shake-off the shackles that private schools puts on life chances of working class pupils, females, BAME, and other minorities – ultimately, undermining equality.

Dr Alpesh Maisuria is associate professor of education policy in critical education at the University of the West of England. He writes widely about issues of social class, educational policy, neoliberalism and Marxism, as well the proposal of a nationalised education service; academy and free schools; private schools; Swedish social democracy and class.