This report compares private school fees and state school spending. It also examines Labour’s proposals to remove tax exemptions from private schools.
The Labour party has proposed a package of policies to remove tax exemptions from private schools. Most importantly in revenue terms, it has proposed levying VAT on private school fees. The revenue raised would then be used to increase state school spending and would be targeted at pupils from disadvantaged backgrounds. In this report, we analyse the likely effects of these proposals on tax revenues and school spending.
Whilst only about 6–7% of pupils across the UK go to private schools, there has long been significant public debate on the role and effects of private schools on the UK economy and society (Green and Kynaston, 2019). Evidence shows that pupils attending private schools benefit from significant advantages in later-life earnings (Green et al., 2011; Green, Henseke and Vignoles, 2017). However, the level of fees means that most pupils attending private schools come from families at the top of both the income and wealth distributions (Blundell, Dearden and Sibieta, 2010; Anders et al., 2020). This leads to concerns about inequalities between pupils and the effects on social mobility (Macmillan, Tyler and Vignoles, 2015). There are, however, many factors that determine choice of private schooling. Such decisions can reflect the quality of local state schools, parental values, experiences of private (or state) schooling themselves, or a desire for a different form of education (Dearden, Ryan and Sibieta, 2011; Anders et al., 2020).
The popular image is dominated by famous schools such as Eton and Winchester, where fees can be over £30,000, but there are many different types of school and a high level of variation in fees. Some private schools are religious schools, some are foreign language schools for children and some use different pedagogical practices. In some of these schools, fees can be under £10,000 per year. There is also a great deal of specialist provision, including provision for pupils with high levels of need and paid for by local authorities.
