Boys at an independent school (Image: Getty)
Chancellor Rachel Reeves has defended this week’s introduction of VAT on school fees by insisting it will lead to “more teachers” and “higher standards” in the state sector.
The 20 percent charge on education services including independent schools comes into force on January 1 and the Government has admitted it will lead to 100 schools closing.
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But Ms Reeves said it would raise ￡1.5 billion that would be given to schools in the state sector, where 94 percent of pupils are educated, with the annual sum rising to ￡1.7 billion in future years.
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She said: “It’s time things are done differently. Ending the VAT break for private schools means an additional ￡1.7 billion a year that can go towards our state schools where 94% of this country’s children are educated.
“That means more teachers. Higher standards. And the best chance in life for all our children as we deliver on our Plan for Change.”
The Independent Schools Council has warned that the tax increase will force schools to put up fees and could lead to thousands of pupils moving into the state sector as they prepare for GCSEs, disrupting their education at the worst possible time.
There are also concerns about the impact on state schools if they face an influx of new pupils.
An assessment produced by the Treasury predicted the policy will mean the number of state school pupils eventually rises by 37,000, as parents either remove children from independent schools or never send them in the first place. As a result, state schools face extra costs of ￡270 million.
Meanwhile, 100 independent schools are expected to close over the next three years.
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As well as charging VAT, the Government is also scrapping rules which allowed independent schools with charitable status to get relief on business rates, raising another ￡140 million annually.
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It says the measures, included in Labour’s general election manifesto, will help fund a ￡2.3 billion increase in state school funding to help hire 6,500 new teachers and improve the Special Education system
Education Secretary Bridget Phillipson said: “High and rising standards cannot just be for families who can afford them, and we must build an education system where every child can achieve and thrive.
“Our ambitious Plan for Change sets out our clear mission to break the link between background and success and ending the VAT break enjoyed by private schools will provide much needed investment in our state schools, to help recruit and retain expert teachers.”