Contribution
My Lords, I should declare my interest as a governor of an independent school, the Yehudi Menuhin School in Cobham. Like others, I thank my noble friend Lord Lexden for initiating this debate and I share his views, and those of the other speakers so far, on the damage that this policy has done to the independent sector in general. The Government should recognise that parents who send their children to independent schools are, in effect, paying twice. They pay once through their taxation to support the state sector and then they pay again. They would not do that unless they believed that they could achieve a better education, or meet some special needs, through paying double to send their children to an independent school.
If the Government are in pursuit of fairness, rather than trying to bring down these high-quality schools through additional levies it would be much fairer to focus on bringing up the standard of education in state schools so that we had a better education system overall for the 100%.
I will focus my brief remarks on the specialist music and dance schools. These schools offer a unique and focused education for a relatively small number of highly talented children. These children are supported and inspired by being in peer group of other talented children who share their passion for music. That environment and support is simply not available in normal schools. This handful of specialist music schools is shaping the next generation of musical leaders, who are a vital national resource for a sector that is important not only culturally but economically.
Like other music schools, the Yehudi Menuhin School attempts to operate a needs-blind admissions policy. It seeks the most talented children who are capable of achieving the highest standards, regardless of their social background, their economic status and the ability of their parents to pay fees. With only 93 pupils in that school, providing a full academic education alongside specialist music training means that costs are very high. The full fees for a boarder amount to some £50,000 a year. As a result, alongside a needs-blind admission policy, only around one in 10 parents pays the full fees. The rest need financial support to reduce the fees to a level they can afford.
VAT at 20% adds up to £10,000 on a £50,000 fee, and is proportionate, depending on how much the parents contribute. Since parents who are being supported by bursaries and scholarships are already paying as much as they can afford, they cannot simply pay another 20%. This will inevitably increase the demand for financial support to maintain their children at the school.
We are fortunate in this country, as the Minister knows, to have the Government-funded music and dance scheme, which offers means-tested support to support UK residents at these schools. But that has not kept pace with inflation over the years and has not been raised to pay for the VAT levy. These schools attract talented children from all around the world, many of whom are not eligible for the MDS grant. For those coming from overseas, all the burden of funding bursaries and paying the additional VAT the parents cannot pay falls on the school and the limited funds that schools are able to raise from charitable donations.
As others have said, there have been other financial pressures on these schools, from inflation, the national insurance increase and the loss of business rates relief. There will be further costs from implementing the loss of zero-hours contracts for staff, many of whom are part-time music teachers. The VAT levy now poses a real danger to the financial viability of these specialist schools, which play such an important role in maintaining the UK’s cultural leadership.
I would prefer the Government to think again about the wider application of VAT to private schools across the board, as many other speakers have urged. If they are not prepared to do that, I ask the Minister whether the Government would at least reconsider whether the unique specialist music and dance schools should be exempted from this policy.