State sector could cope with independent pupils forced out under Labour

  • 12th July 2023

Up to 40,000 pupils could be forced to move out of their independent schools if Labour follows through on its plans remove tax exemptions from private schools, according to a new report form the Institute for Fiscal Studies.

The IFS estimates that removing tax exemptions from private schools would raise about £1.6 billion a year in extra tax revenue. It adds that if parents decided to stop paying for private school fees as a result of the extra VAT, this would release spending on fees that would likely be spent on other goods and services, thereby generating extra VAT revenues. This would allow for about a 2% increase in state school spending in England, which Labour has proposed would be targeted at disadvantaged students.

It adds that an effective VAT rate of 15% would lead to a 3% to 7% reduction in private school attendance. This would likely generate a need for about £100 to £300 million in extra state school spending annually in the medium to long run.

The report states: “It is possible that the state sector could easily accommodate extra pupils given that overall pupil numbers across England are due to decline by at least 100,000 per year on average up to 2030 – i.e. a total drop of more than 700,000, which is bigger than the total number of children attending private schools.

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