Sheffield private schools brand Government budget scheme to raise £1.8bn through VAT 'a huge error'

Chancellor Rachel Reeves’ first budget this week confirmed a plan to raise £1.8bn in three years by having private schools charge parents 20 per cent VAT on their tuition bills. They will also have to pay business rates from April.

It would mean an institution like Sheffield High School for Girls will see a 12 per cent hike in their Autumn fee, and cost a maximum of £5,958 per term.

The plan comes into force in January - mid way through the academic year - with Treasury documents claiming the policies will raise £460 million by April, £1.57 billion in 2025/26 and £1.8 billion by 2029-30.

However, consultations also estimate that “in the long-term steady state, 37,000 pupils [around six per cent of the current private school cohort] will leave or never enter the UK private school sector as a result of the VAT policy”.

This is also likely to mean 35,000 pupils entering state schools as a result, which itself could cost the system £300m after several years.

Pupils with special educational needs whose needs can only be met in private will be broadly exempt from the VAT scheme so they are not priced out of classes. This will be done by “compensating” councils.

However, Sheffield’s private schools have criticised the VAT policy as “misguided.”

One such school is Mylnhurst Preparatory School in Ecclesall, with headteacher Mike Hibbert saying he was “extremely disappointed and strongly disapproved” of the move.

“The families who choose to send their children to Mylnhurst make significant financial sacrifices in order to do so,” said Mr Hibbert.

“We are not an insular, 'elite' school at all. Our 25 metre swimming pool is used by all the state primaries in the area, and we are a partner to Marsh Lane Primary School.

“We are committed to lessening the impact of this misguided policy on our parents and pupils, and ensuring we protect everything that is wonderful about Mylnhurst.

“I think it is a huge error in judgement, I don't think it is in the best interests of children or the education sector, and from a financial viewpoint alone I do not believe it will generate the sums the Government claims."

Head of Birkdale School, Peter Harris, also said his school would be faced with “a number of challenges” over the scheme and they would work to “pass on savings to parents where possible.”

A spokesperson for Sheffield High School for Girls said they “especially disappointed that the government is introducing this change at such short notice and during an academic year,” and that it would “create financial uncertainty” for parents.

Are you a parent at one of Sheffield’s private schools? Contact The Star to say how you feel the VAT scheme will affect you on [email protected]

The Government also announced that the core schools budget will increase by £2.3bn next year and has pledged to hire thousands more teachers for key subjects.

Chancellor Reeves also announced a £1 billion uplift in funding to ‘reform the SEND system’, which will come from the overall £2.3bn school funding uplift.

She pledged to “improve outcomes for our most vulnerable children and to ensure that the system isfinancially sustainable”.