Labour policy on independent schools has flaws – report
Think Tank EDSK has warned in a research paper that there are flaws in Labour Party’s assertion that £1.6 billion could be raised by its policy of removing charitable status and imposing VAT on the independent school sector.
EDSK admits that its findings cannot provide a definitive answer on the matter, “not least because some assumptions had to be made about where previous calculations and estimates came from”.
However, in its conclusion the report states: “Previous claims about how much new revenue could be unlocked by this policy seem very optimistic, particularly if any more than a small number of pupils end up leaving independent schools and moving to the state sector instead.”
The report casts doubt on previous studies by the Fabian Society and the Resolution Foundation which formed the basis of Labour’s calculations.
It looked into two estimates of pupil ‘drop-off’ resulting from the policy. Based on Labour’s assumption of 5%, the report estimated the income generated would drop to £991 million.
However, if 25% dropped out, as a report commissioned by the Independent Schools Council estimated in 2018, income would fall to just £19 million.
The report concludes: “Claims of £1.6 billion a year being raised from adding VAT to private school fees look far too optimistic, particularly if any more than a small number of pupils end up leaving private schools and moving to the state sector instead.
“What’s more, changing VAT rules with the sole aim of targeting private schools could lead to many unintended consequences that result in a government raising much less money than intended.”