Armed forces recruitment crisis could worsen over VAT on private school fees, insiders say
A recruitment and retention crisis in the armed forces will grow unless the government exempts military families from paying VAT on private school fees, insiders have warned.
Sky News understands that more and more families are raising concerns internally about the “damaging” policy after the chancellor failed to offer sufficient protections in her budget.
They say a promise to increase an allowance funded by the Ministry of Defence (MoD) that helps to cover the cost of school fees does not go far enough, and that highly experienced personnel – officers and other ranks – will quit if Rachel Reeves does not perform a U-turn.
Such a loss in skills would weaken UK defences at a time of rising threats, the insiders say.
A soldier with a child at boarding school, who asked to remain anonymous, said: “I will have to leave military service, as I will not inflict another school move on my child.”
He said: “On one side, the chancellor wore a poppy during her budget announcement, and then proceeded to deal a damaging blow to members of His Majesty’s Armed Forces by not including a simple exemption.”
Defence Secretary John Healey joins serving military personnel to hand out poppies. Pic: PA
An army spouse, who asked for her identity to be protected because her husband is serving, said: “This is people’s children. This is people’s money in their pocket.”
She told Sky News: “If there is a nice job offer outside the military… that is going to look way, way more attractive than it did a few months ago. The army is in a recruitment and retention crisis, so why would you do something like this?”
Offering a sense of the scale of the potential impact, the Army Families Federation, an independent charity, said nearly 70% of families that shared evidence with it about the policy said without protection from the full cost of the VAT they would consider quitting the service.
The mobile nature of military life – with postings around the UK and overseas – often requires service personnel to move every few years, with any children they have forced to relocate with them, transiting in and out of different schools.
To protect against this disruption some parents decide to send their kids to private school – often to board.
More than 2,000 of these personnel – the majority of them in the army – claim money from the MoD to help cover the cost of private school fees.
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The Continuity of Education Allowance (CEA) funds up to 90% of tuition fees but families must pay a minimum of 10%.
Many of those who take this option will have agonised over the affordability of the portion they will still pay, which can amount to tens of thousands of pounds per year.
They will now have to pay more to cover the VAT on this portion of the bill – or else pull their children out of school, a nightmare option, especially for those serving abroad.
In addition, some other military families that do not qualify for the education allowance – which is only allocated under a very strict criteria – still opt to put their children into boarding school to ensure the continuity of their education at a single location.
They will have no protection from any of the VAT burden.
James Cartlidge. Pic: PA
James Cartlidge, the shadow defence secretary, said he has received a lot of messages from impacted families and is urging the government to give them an exemption.
“The emails I’ve had are saying: I’ve got to choose between my child and serving my country,” said Mr Cartlidge, who previously served as a Conservative defence minister.
“The government really needs to respond to this quickly.”
An MoD spokesperson said: “We greatly value the contribution of our serving personnel and we provide the Continuity of Education Allowance to ensure that the need for the mobility of service personnel does not interfere with the education of their children.
“In line with how the allowance normally operates, the MoD will continue to pay up to 90% of private school fees following the VAT changes on 1 January by uprating the current cap rates to take into account any increases in private school fees.”
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When Nigel Farage’s Reform UK is just one point behind you in the opinion polls, the last thing you want to be reminded about is Brexit.
If you’re Sir Keir Starmer, that is.
No doubt Poland’s prime minister, Donald Tusk, was trying to be friendly. After all, as Sir Keir said, they share a passion for Arsenal Football Club.
But when Mr Tusk declared at their joint news conference in Warsaw that his dream was “instead of a Brexit, we will have a Breturn”, Sir Keir visibly cringed.
Was it an ambush? Not quite. But it was certainly awkward for the UK prime minister. He stood stiffly and didn’t respond, not once uttering the word “Brexit”.
Mr Tusk, however, has form for bemoaning Brexit. He was, after all, the president of the European Council when the UK voted to leave the EU in 2016.
He might now be in his second spell as Poland’s PM, but his five years at the EU make him the ultimate Brussels insider, who’s never made any attempt to hide his feelings on Brexit.
Prior to the UK referendum, in September 2015, he said Brexit “could be the beginning of the destruction of not only the EU but also of western political civilisation in its entirety”.
His most outspoken attack on the UK’s Eurosceptics came in 2019 when the-then prime minister Theresa May was struggling to get a deal. He spoke of “what the special place in hell looks like for those who promoted Brexit“.
Sir Keir also visited Ukraine on his trip to Eastern Europe. Pic: PA
Standing alongside Sir Keir, he revealed that “for obvious reasons” they discussed co-operation between the UK and the EU. He recalled that his emotional reaction to the referendum in 2016 was “I already miss you”.
He went on: “This is not just about emotions and sentiments – I am aware this is a dream of mine, that instead of a Brexit we will have a Breturn.
“Perhaps I’m labouring under an illusion. I’d rather be an optimist and harbour these dreams in my heart – sometimes they come true in politics.”
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A dream? Or a calculated move? As a Brussels insider, was Mr Tusk speaking for the EU as a whole? Was he doing Brussels’ bidding?
He may have returned to lead his homeland, but he remains a key player in Brussels.
On becoming Poland’s PM in 2023, he ended a dispute with Brussels which unlocked billions of frozen EU funds for his country.
He also orchestrated the return of his centre-right ally Ursula von der Leyen as European Commission president.
And Poland has just taken over the rotating presidency of the EU, which means Mr Tusk will be hugely influential once again, chairing meetings and setting agendas.
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Poland is back in the European mainstream. It’s where Mr Tusk would like the UK to be as well.
It’s where, privately, Sir Keir would like the UK to be. It’s just that with Reform UK almost neck and neck with Labour in the polls, he daren’t say so.
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