Private schools ‘to raise fees by more than Starmer predicted’ as controversial VAT policy imposed

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Private schools are reportedly set to raise their fees by more than the government predicted as Labour’s controversial VAT policy is imposed from the start of the new year.

Keir Starmer has argued the 20 per cent levy on the independent sector will fund investment in the state sector.

Meanwhile, the Treasury claimed in an impact assessment in October that fees at the UK’s 2,600 independent schools would only end up increasing by 10 per cent on average as the full cost would not be passed on to parents.

However, the Telegraph newspaper’s analysis of 964 private schools in England, Scotland and Wales has found the average rise in fees is actually set to be 14 per cent. Looking at the increase in day fees between the autumn and upcoming spring terms, the newspaper reported around half are set to hike their fees by 15 per cent or more and a fifth, including Eton, by the entire 20 per cent.

The findings are the latest blow to the prime minister over the policy after it has already come under considerable fire.

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The Treasury said on Sunday that it has earmarked £2.6bn of extra funding for state schools next year to invest in improving special education provision and hire 6,500 new teachers, with £1.5bn of this coming from the policy change.

The amount raised by the move will increase to £1.7bn each year by 2029/30, it added.

However, private school leaders have warned the combination of tax hikes in the Budget and the removal of their charitable status, which saw fees exempted from VAT, could lead the sector to “fall apart”.

They have also argued that the hike in school fees as a result of the policies will force more children into the state sector, overwhelming already stretched schools and wiping out any gains to the public finances.

As the policy is set to come into effect on 1 January, Conservative shadow education secretary Laura Trott said: “This rise in VAT will do nothing to help state schools.

“The Labour government is disrupting thousands of children’s education vindictively in the middle of the school year, and all it will do will add pressure to the education system. It will be pupils, parents and teachers from the state sector that will end up paying the price.”

However, defending the move, Chancellor Rachel Reeves countered: “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 per cent 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.”

Education secretary Bridget Phillipson added: “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.”