If all councils had responded with figures, it suggests more than 5,000 private school pupils submitted in-year transfer requests to move to state school by the end of the first week of the new school year.
The data shows the largest exodus of pupils took place around the outskirts of London and the Home Counties, which have reported the greatest pressure on state school availability.
The estimate was that 3,000 would move.
The lesson from this is that economic numbers are rarely known with any accuracy. Therefore it’s not possible to plan the economy to nay great level of detail. Hayek got his Nobel for this but it’s amazin’ how many people don’t want to accept the point.
Step forward Lord Melbourne and take yet another bow:
“What all the wise men promised has not happened, and what all the damned fools said would happen has come to pass.”
Thank you BiND.
This gives me more confidence that my opinions are correct!!!
Luckily our state schools are of such superb quality that they will easily absorb these extra pupils and there will be little disruption to children’s education.
So disregarding the impact on state schools and education and looking purely at the numbers, at what point does the revenue raised by VAT on school fees get absorbed by the cost of funding the extra places in state schools?
“the largest exodus of pupils took place around the outskirts of London and the Home Counties”: any idea why?
Is that where the private schools are concentrated? Because that’s where they are most expensive? Because Essex and Kent still have grammar schools?
TMB,
What are we talking? £13K/year? Say, £2500 per pupil in VAT? 554,000 pupils? That’s about £1.2bn.
£7200 to educate kids at state school, 5,000 kids is about £35m.
Of course, it doesn’t tell you about things like the parents who decide not to go. That would have left primary to go private and instead go into state. Also, presumably these schools can now claim VAT back on building work, computers, books etc etc which they couldn’t before so it’s going to be a lot less than that.
TMB:
So disregarding the impact on state schools and education and looking purely at the numbers, at what point does the revenue raised by VAT on school fees get absorbed by the cost of funding the extra places in state schools?
They don’t care. The point is control; to punish the people who wanted to escape State Schooling.
Elections like both Trump victories or the Brexit referendum were partly down to a large mass of people seeing an establishment that absolutely hates them, and voting against that establishment. The establishment, instead of wondering why people might hate them, responded in all three cases by saying “we need to hate the people *harder*” and rub their noses in it.
Day schools cost (on average) £15k per pupil per year, boarding obvs much higher. Total 550k private school pupils, so VAT on that raises £1.65bn p.a. Each pupil removed from private school reduces that by £3k, and adds £5.5k of cost to the state sector, so total £8.5k per pupil from the £1.65bn. So about 200k pupils would have to be moved to the state sector before it would cost the exchequer current-year money… provided you only care about first-order effects.
This assumes that the people who do pay school fees suck up the 20% VAT without reducing other VATable expenditure, or reducing savings/investments. Tricky. So if the additional school fees were paid entirely by forgoing other expenditure, the charge actually only raises 80% of what is claimed so £1.32bn. If it’s raised by reducing investment/savings then it gets a whole lot worse over the long term but harder to calculate.
It also assumes that the parents who move their children to state schools won’t take their savings as reduced working hours or earlier retirement. Two children through secondary school (incl. A levels) = £210k pre VAT. If this is taken as increased leisure time, tax an NI on £210k take-home pay foregone at 45% (marginal) tax + 2% NI + 15% Employers NI = £304k in tax not paid, or an additional £22k per child per year. Now we’re at a cost of £30k/child/year, so withdrawal of 44,000 children cancels this policy out. Still a way over the 8,500 reported in the few months since the policy was announced, but the biggest issue isn’t children being moved out — parents will be reluctant to move children who have already started at school out — but those who don’t start at private school in the first place, or who move from private -> state when they might be changing schools anyway at 7, 11, 16, etc. so wouldn’t be counted as withdrawals.
WB
Yes, if you limit the number to 5000 leaving private education but my guess is that it will be a far larger number. Small schools with a roll of 100-120 children may close if the pupil numbers fall enough for them to become loss-making and there will then be various other bills for govt to pick up for people who have lost their jobs and so on and so forth.
Time will tell but this policy smells of ideology trumping pragmatism like so much of the TTK program – and I use that word in its loosest sense!
Surely the true amount leaving won’t be known for several years? Its quite possible that people with a child a year or two from the end of their schooling (or the end of a particular school) will suck it up and get through somehow. But the family who would have put their 13 year old into that school as the 18 year old left won’t, so numbers will slowly drop. The immediate drop is just those who literally can’t afford another penny, and have to leave right away. There’ll be another drop once the actual bills start going out and reality hits (its amazing how many people are disconnected from whats happening around them), and the biggest will be around next September, as thats a natural time to shift a child, at the end of an academic year.
Basically there are a number of natural breaks in education, 11, 13 and 16. Chances are people struggling to afford it will try to get to the next natural break, then move to the state sector. Finish prep school, then move to State comp. Finish GCSEs, then go to state 6th form. Everyone isn’t just going to down tools immediately, it’ll be a gradual process. And those entering at the bottom will not do so if they can’t see they’ll be able to pay all the way to age 18, so new entrants will drop off too.
By the next election we’ll have a reasonable idea how many have been driven out of the private sector into the State one and whether its raised any extra tax revenue or not.
“Each pupil removed from private school … adds £5.5k of cost to the state sector”: is that on the customary argument that ignores capital costs and admin overheads at the council and Whitehall, or is at an honest attempt at an all-embracing costing?
I ask because I can remember the Bursar at (I think) the Royal Grammar school in Newcastle pointing out that if you did the sums properly his independent school cost much the same per capita per annum as the local council comps.
TMB,
“Time will tell but this policy smells of ideology trumping pragmatism like so much of the TTK program – and I use that word in its loosest sense!”
Oh absolutely. The left are obsessed with private schools, that they grant privileges, even though the data doesn’t support that at all.
I generally hate VAT, particularly for anything education-related, like we stick VAT on training courses. Scrap it all, take the tax elsewhere.
“whether its raised any extra tax revenue or not”
Will be all but impossible to tell. As pointed out, parents might forgo a new kitchen or downgrade it or not go on holiday and so on. VAT gained on school fees will be offset by VAT lost elsewhere.
Jim & Andrew C
Yes to the incremental impact over time and to the loss of VAT revenues on other goods and services.
Disposable income does not increase in response to the government’s wish to tax it.
“The left are obsessed with private schools, that they grant privileges”
Well, that’s the excuse. The real reason is their need for control and desire to indoctrinate.
If I woke up and found myself Prime Minister, the abolition of state education would be on the agenda for day 1. The Left understands how important it is (hence this piece of nonsense); the rest of us need to wake up to that. I like to turn their slogan around on them: education is far too important to be left to the government.
Sam Duncan: « If I woke up and found myself Prime Minister… »
Well, look on the bright side: you would be able to
touch,bite the ear of, ask Lord Alli to buy you lots of nice, expensive clothes.What Ted S said.
Sam Duncan,
“Well, that’s the excuse. The real reason is their need for control and desire to indoctrinate.”
It doesn’t make any difference. You can’t set up a private school based on Islamic, Stoic or Ayn Rand philosophy. The law on private schools is that it has to teach a “broad curriculum” which means that they end up just importing the National Curriculum because it’s “broad curriculum” as defined by government.