Message to unions: Don't tax tuition fees. Make private schools work for the public good

TTo tax or not to tax? Labour’s plan to impose VAT on private schools seemed like a good idea at the time. Its programme was free of any left-wing influence. The tax would strike at the root of privilege and bring in a windfall of £1.6 billion for deprived state schools. What’s not to like?

The problem is that every tax has unintended consequences. It is estimated that most parents would simply pay. Schools would cut costs, offset VAT-taxable expenses and increase grants. Fees should not rise by more than 15%, which they have recently done. The shadow chancellor, Rachel Reeves, has indicated that she will not target parents whose children are at a critical stage in their education. The new tax will be progressive.

The Institute for Fiscal Studies has indeed concluded that there will be no seismic shift. But many smaller, financially marginal schools could close, leaving their children in the local state sector. If around 40,000 children were to be enrolled, this would cut £100m to £300m out of the education budget. Private schools also provide local authorities with 100,000 places for special needs education – which are badly needed. In truth, the victims of the new VAT will not be those who can afford it but the marginal, the near-rich. Is the political game really worth the budgetary candle?

I have been a governor of both public and private sector schools and, with a few exceptions, have always been impressed by the similar quality of teaching in both sectors. Their main scourge is the poison of exam culture and Ofsted-inspired bureaucracy. Both should be abolished. As for the advantage that private education once gave when entering university, the gap between private and public schools still exists, but it is tending to narrow.

The difference between the sectors that I often noticed was not in the classrooms but in extra-curricular activities. Over the past decade, government pressure for students to take more exams has pushed the arts, creativity and sport out of the state education system. Arts subjects have plummeted, almost halving at GCSE since 2010. As for sport, the Guardian recently revealed that the sale of state sports grounds means that private schools now have ten times as much outdoor space as state schools. The disparity is growing. The state primary school I attended in Surrey had no outdoor space other than a tarmac playground. The adjacent private prep school had sports fields and tennis courts that stretched as far as the eye could see.

Now for the NHS, whose current plight hardly needs mention. He frantically outsources work to private hospitals. Half of all hip, knee and cataract operations in Britain – both privately and publicly funded – are carried out in the private sector. Indeed, 10% of all elective surgeries in the NHS are outsourced, as the country faces a waiting list of seven million people. This figure has increased by 50% since the pandemic and appears set to increase. Additionally, Bupa insurance has two million customers and Aviva one million, the latter having grown by 20% in the past year alone. I doubt Labor shadow health secretary Wes Streeting will consider imposing VAT on private hip replacements.

Unlike his colleagues in education, Streeting proposed to rely on this contractual relationship between the public and private sectors. It costs money, but the problem lies in the service. He attacks “middle-class leftists,” whose “ideological hobbyhorses” come at the expense of patient care. Healthcare is a booming industry built on private choice and funding. Yet it takes staff and resources away from an NHS that is crippled by excessive demand and a creaky, outdated professional bureaucracy. Its rottenness is well illustrated by the absurd doctors’ strike this week. Today, moving from a public hospital to a private hospital is like moving from Lidl to Bond Street.

Finding a stable balance between privatization and nationalization in the public sector has challenged British governments for a painful quarter of a century. This research should be the overwhelming burden of a Labor government. This is urgent in the water, energy and transport sectors. The situation is desperate in hospitals and care homes, the latter being devastated by private offshore funding.

In the quieter world of education, private schools like to think of themselves as charities, even though their goal is to save taxpayers the cost of teaching half a million rich kids. Some schools undoubtedly honor the concept. Eton supports numerous charities and six academic partnerships. Winchester provided local voluntary care. Many schools have credit for offering scholarships to poor children, with broader benefits remaining obscure.

A private school of which I was principal merged many of its extracurricular activities with other local schools, to the great benefit of both parties. Private school playgrounds, meeting rooms and libraries are chronically underutilized, even though they are essential locally. Likewise, orchestras should not rely solely on private income, any more than art classes, gyms, sports classes or swimming pools. Schools receive generous time off when these facilities are not in use. They should contribute to the broader needs of the place in which they are located, contributing to something that is still familiar in most American cities, the feeling of a common high school.

Every local council in Britain should have a plan which treats all its schools to some extent as commons. He should ask himself what contribution each can make to the whole. This is how each school will become a true work of charity, a benefit for all. This is where it would constitute its real “added value” for the community.