General Election 2024: Private school head warns of hit to kids under Labour tax grab
Hulme Grammar School in Oldham doesn’t feel like a bastion of privilege, but the children whose parents pay around £15,000 a year for them to attend are nevertheless among an elite minority.
A selective fee-paying school, Hulme is one of around 2,500 independent schools that educate 7% of the school population, a minority that is the target of one of Labour’s few unapologetically tax-raising policies.
If elected, Labour says it will end the VAT exemption on fees, making them subject to 20% tax, raising an estimated £1.6bn the party says will be used to hire 6,500 teachers in the state sector that educates 93% of children.
Private school parents fear the increase will be passed on directly, pricing some children out, while industry bodies claim some schools will close.
Oldham is one of the poorest towns in England and Hulme is one of the country’s more affordable independent schools, its fees around the national average and well short of the £50,000 charged by Eton and the prime minister’s alma mater Winchester College.
Headteacher Tony Oulton, state educated and with experience working on both sides of Britain’s educational divide, says Labour’s policy misrepresents the majority of private schools and punishes parents.
“The sector is not Eton or Harrow or Winchester, the big posh boarding schools largely based in the south of England.
“The majority is made up of schools like mine where parents are making real sacrifices to pay the school fees because that’s how they are choosing to prioritise their spending.”
‘They are prioritising education the way some prioritise holidays’
Even without the Labour policy, fees at Hulme will rise 5.5% next year, a figure Mr Oulton says reflects the wider costs pressures, primarily wages for teachers. He says he cannot absorb the VAT rise without sacrificing the 24-child class size limit he believes parents are paying for.
“I lament the political debate, the loss of nuance and insight into the impact on children.
“The idea they are buying privilege and separation would not resonate with parents here. They don’t recognise the rhetoric that sits around this, that they are part of some privileged elite. They are prioritising education the way some prioritise holidays.”
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Private schools ‘will adapt’ to VAT tax
Privately educated children do nevertheless enjoy advantages. At £15,000 the average fee is double the £7,500-per-head funding in the state sector, and selection allows independent schools to choose who they want to educate.
Analysis by the Institute for Fiscal Studies meanwhile shows that private school attendance is concentrated among the wealthiest households, with three quarters of pupils drawn from the 30% of highest earners, and most from the top 10%.
This perhaps explains why Labour has felt able to concentrate one of its few openly tax-raising policies on the sector.
It argues that the needs of the state system, relied on by 93% of parents, make it popular while unspoken is the possibility that complaints of those who can afford fees in the first place will elicit little sympathy.
They are relaxed too about warnings that increasing fees will lead to an exodus of pupils that will put state schools under pressure.
Private school rolls have remained constant despite average fees increasing almost 50% in the last decade, and state secondary registers are forecast to fall 7% in the next decade as a population bulge passes through the system.
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State education is facing undeniable challenges, including recruitment and retention, with one in four teachers leaving after three years in classrooms.
The growth in demand for special educational needs provision is also putting schools and local authorities under pressure. Some 576,000 children had an active education and health plan in January, almost as many as the total private school roll of around 615,000.
Headlands School in Bridlington faces typical challenges, all while working to clear a £1m deficit from its budget.
Assistant head teacher Adam Wooley said the issues for state education go beyond the school gate.
“It is not just about school funding but funding all the services around young people. A million people are in child poverty so there is only so much schools can do if children come in hungry, cold and without that stable foundation,” he says.
“I take the argument from private schools and parents that it is a squeeze on people being aspirational for their children, but all parents are aspirational. State schools can and absolutely should be a place where you can send your child and aspire to great things, but that needs funding.”
A financial wellbeing platform which counts the alcohol-free beer producer Lucky Saint among its clients has landed a £6m funding injection from a syndicate of well-known investors.
Sky News understands that Mintago, which was founded in 2019, will announce in the coming days that Guinness Ventures has jointly led the Series A round alongside Seed X Liechtenstein and Social Impact Enterprises.
Mintago, which also counts car rental firm Avis and Northumbrian Police among its customers, aims to help employees save and manage their money more effectively.
A number of the start-up’s current investors, Love Ventures and Truesight Ventures, are also understood to have reinvested as part of the fundraising.
The company, which counts Lucky Saint and Avis among its users, has finalised a Series A funding round
The company was set up by Chieu Cao and Daniel Conti, and claims to offer more salary sacrifice schemes than any other UK provider.
It also provides independent financial advice, a service for finding lost pension pots, retail discounts and GP services.
“We realised that organisations are crying out for the same help we provide their staff,” Mr Conti said.
“The benefits of providing that support impact everyone.
“When a company improves their salary sacrifice benefits engagement, they can save thousands in National Insurance Contributions, but their employees save too, easing the strain on their finances.”
The new capital will be used to develop additional products using artificial intelligence, according to the company.
“Mintago is enabling its customers to become truly people-centric organisations by giving them the tools to support their employees’ financial wellbeing,” Mathias Jaeggi, a partner at Seed X Liechtenstein, said.
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