To tax or not to tax? Labour’s plan to impose VAT on private schools seemed a good idea at the time. Its programme was bereft of leftist clout. The tax would hit privilege at its roots, and bring in a windfall £1.6bn to benefit deprived state schools. What was not to like?
The trouble is that every tax carries unintended consequences. Estimates were that most parents would simply pay up. Schools would cut costs, offset VAT-able expenses and boost bursaries. Fees should not rise by more than 15%, which is what they have recently done anyway. The shadow chancellor, Rachel Reeves, has indicated that she will not target parents with children who are at a critical stage of their school careers. The new tax will be gradual.
The Institute for Fiscal Studies has indeed concluded that there will no seismic change. But many smaller and financially marginal schools might close, dumping their children on to the local state sector. If an estimated 40,000 children move on to school rolls, it would knock £100 to £300m off the benefit to the education budget. Private schools also give local authorities 100,000 special educational needs places – which are in chronically short supply. In truth, the victims of the new VAT will not be those who can afford it but the marginal families, the almost rich. Is the political game really worth the fiscal candle?
I have been a governor of schools in the state and private sectors and, with some exceptions, have always been impressed by the similar quality of teaching in both sectors. The chief blight on both is the poison of the examination culture and the Ofsted-inspired bureaucracy. Both should be abolished. As for the leg-up that a private education used to give to university entry, the gap between private and state schools still exists, but the trend is toward it closing.
The difference between sectors that I frequently noticed was not in the classroom but in extracurricular activity. For a decade, government pressure to pass more exams has driven the arts, creativity and sport out of the mainstream of state schooling. Arts subjects have plummeted, falling at GCSE by almost half since 2010. As for sport, the Guardian recently revealed that the selling of public sports fields means that private schools now have 10 times more outdoor space than state ones. This disparity is growing. The state primary school I went to in Surrey had no outdoor space other than an asphalt playground. The adjacent private prep school had sports fields and tennis courts stretching to the horizon.
Cut to the NHS, whose current distress hardly needs to be mentioned. It is frantically outsourcing work to private hospitals. Half of all hip, knee and cataract operations in Britain – privately and publicly funded – are being performed in the private sector. Indeed, 10% of all NHS elective surgery is contracted out as it struggles with a seven million-strong waiting list. This figure has risen 50% since the pandemic, and seems certain to increase. In addition, Bupa insurance has two million customers and Aviva a million, the latter rising by 20% in just the past year. I doubt if Labour’s shadow health secretary, Wes Streeting, is thinking of imposing VAT on private hip replacements.
Unlike his colleagues at education, Streeting has proposed to build on this contractual relationship between public and private sectors. It costs money, but service is the issue. He attacks “middle-class lefties”, whose “ideological hobby horses” come at the expense of patient care. Health is a booming industry built on private choice and private money. Yet it is drawing staff and resources from an NHS that is crippled with over-demand and a creaking and outdated professional bureaucracy. Its rottenness is well illustrated in the absurd doctors’ strike this week. To move between a public and private hospital these days is like going from Lidl to Bond Street.
Finding some stable balance between privatisation and nationalisation in the public sector has defied British governments for a painful quarter of a century. This search should be the overwhelming burden on a Labour government. It is urgent in water, energy and transport utilities. It is desperate in hospitals and care homes, the latter devastated by offshore private finance.
In the calmer world of education, private schools like to consider themselves charities, even if the charity lies in saving taxpayers the cost of teaching half a million rich children. Some schools undoubtedly honour the concept. Eton supports numerous charities and six academy partnerships. Winchester has supplied local care volunteers. Many schools score virtue in offering bursaries to poor children, with wider benefits that remain obscure.
One private school where I was a governor fused much of its extracurricular sixth-form activity with other local sixth forms, much to the benefit of both. Private school playing fields, assembly halls and libraries are chronically underused – yet much needed locally. Likewise, orchestras need not respond only to private incomes, nor should art classes, gymnasiums, sports coaching or swimming pools. Schools have generous holidays, when such facilities lie unused. They should contribute to the wider needs of where they are located, assisting something still familiar in most American towns, the sense of a high school common to all.
Every local council in Britain should have a plan that treats all its schools in some degree as shared assets. It should ask what contribution each can make to the whole. That is when every school becomes a real charity, a benefit to all. That would be its true “value added” to the community.
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Simon Jenkins is a Guardian columnist