Starmer tells private special school to keep costs down to cope with his VAT plan

Sir Keir Starmer has told a school for children with special educational needs that it should “work to ensure costs are kept affordable” so that it can cope with Labour’s tax on private schools, i can reveal.

The Labour leader’s letter to Moon Hall School, threatens to inflame a row about the fate of more than 100,000 pupils with special educational needs (SEND) under his plans to levy 20 per cent VAT on private school fees.

Michelle Catterson, the head of the private school for dyslexic pupils in Reigate, Surrey, has responded angrily to the Labour leader’s suggestion, saying she is “extremely frustrated” by his suggestion it could absorb the additional costs created by the Labour tax.

“We have no affordability to do this,” she writes in a letter to Starmer. “Where exactly are you suggesting these funds will come from?”

Ms Catterson told i that absorbing the VAT would cost £375,000 each year meaning her school would have to forgo planned classroom upgrades and essential maintenance like fixing leaky roofs.

The exchange of letters, seen by i, comes after Ms Catterson accused Starmer of “blind ignorance” on national radio, suggesting Labour did not care about children with special educational needs and disabilities (SEND), and saying that had he failed to reply to her letters of concern about his policy.

Private schools claim that Labour’s plan could create a “SEND catastrophe” because it risks “flooding” the state sector with requests for expensive support for pupils with SEND whose parents will no longer be able to afford their private special school places.

Starmer has stressed that pupils with SEND who have their private school places funded by the state through education health and care plans (EHCPs) will have “an exemption” from Labour’s tax on private school fees. The plans are statutory documents stipulating and guaranteeing the extra tax-payer funded support that such children and young people are entitled to.

But figures released by the Independent Schools Council (ISC), in May, found that only 7,646 of the pupils receiving SEND support at private schools have the plans, leaving 103,508 students subject to the 20 per cent tax rise.

When pressed on the issue during a LBC radio phone-in where Ms Catterson raised her concerns, Starmer said: “Where there is a [EHCP] plan in place we will put the exemption in place. Where there isn’t a plan, then that exemption doesn’t apply.”

Afterwards he sent a letter to Ms Catterson, seen by i, confirming Labour’s position and suggesting that her school would be able to absorb the additional cost of the VAT on school fees that would be charged on its pupils without EHCPs – 75 of the school’s 200 students.

“I hope I can reassure you that children at your school who attend based on an Education Health and Care Plan will not see higher costs as a result of our plans to end private schools VAT and business rates exemptions,” Starmer writes.

“We know you will work to ensure costs are kept affordable for parents who do not have an EHCP for their child, as the VAT and business rates do not need to be passed on to parents.”

Labour’s tax would leave us with ‘really difficult decisions’

Michellle Catterson, head of Moon Hall School, is already trying to work out what could be cut to allow the school for dyslexic pupils to cope with Labour’s plan to charge  VAT on private school fees.

“We want to keep things affordable for our parents, but in order to continue on our provision at the level where we have it,” she told i. “We’re going to have to make some really difficult decisions.

“I had a meeting with the accounts team looking at our budgets, and we’ve already cut our budgets this year, and we’re going to be cutting our budgets again next year.

“I will, at all costs, try and avoid any cutbacks to staffing. That will be definitely the one of the last things that I would want to look at. Also the level of bursary support that we provide, I will do everything possible to make sure that that’s avoided.”

She said that big projects like upgrading the school’s IT system and developing a sixth form would have to be cut under the VAT policy.

In her response to Starmer, Ms Catterson says: “Small schools do not make huge surpluses and there should be a differentiation between schools such as mine and larger more established mainstream independent schools where surpluses are significant.”

The head told i that her school was in an old building that requires “a lot of upkeep and maintenance”. “If you were to come and look at the school you would see we don’t have brand-new carpets, you would see the work isn’t all immaculate, you would see that things need replacing, for example, our roof,” she said.

“When we do have quite severe weather, it’s always a worry as to protect the integrity of the building to make sure that it’s not damaged any further.”

Labour says that it will use the funds raised taxing private school fees to provide better provision in the state schools attended by the vast majority of the country’s pupils.

According to the party’s manifesto, the policy will raise £1.5bn for 6,500 new expert teachers, more than 3,000 new nurseries, mental health support for every school and increased teacher and headteacher training.

But Sue Peacock, a consultant offering a support service to parents of SEND children, said it was “incredibly unrealistic” to expect private special schools to absorb the 20 per cent VAT cost for children without EHCPs.

Read Next

I spent £60k sending my daughter to private school… and I regret it

Bills

I spent £60k sending my daughter to private school... and I regret it

Read More

She said the majority of independent schools catering towards SEND children were not profit-making businesses and were struggling to “make ends meet in terms of their staffing costs”.

“In reality, as much as schools may want to support parents in that way, I think they simply wouldn’t be able to,” she told i. “That money just isn’t there.”

Julie Robinson, ISC general secretary, said: “Independent schools provide vital SEND support for over 110,000 students – most of whom do not have an education, health and care plan. We are keen to work with Labour to make sure that these children in particular do not have their education adversely affected by VAT on their parents’ fees.

“Specialist schools offer targeted and expert education, addressing often complex needs. They cannot, nor should they be expected to, cut their costs by up to a fifth.”

Rudolf Eliott Lockhart, chief executive of the Independent Schools Association (ISA), said it was “concerned about the consequences for children with special needs resulting from the Labour Party’s VAT policy”.

The association, which is part of the ISC, includes 60 SEND schools. Mr Lockhart said: “They operate on tight margins, and most will not be able to absorb the extra VAT cost and will have to pass this on to parents.

“In turn, many parents will struggle to afford an extra 20 per cent on the fees at the schools they have chosen for their children because they best meet their child’s needs.”

Labour was contacted for comment.

Election 2024

Rishi Sunak, Sir Keir Starmer and other party leaders are on the campaign trail, and i‘s election live blog is the go-to place for everything on the general election.

All the main parties have launched their manifestos: read i‘s breakdown of all the pledges from the Tories, Green Party, Labour, Liberal Democrats and Reform UK.

i has urged the parties to commit to its Save Britain’s Rivers manifesto to improve our waterways. The Lib Dems became the first to back the campaign, followed by the Green Party. Keir Starmer called the campaign ‘really important’ but stopped short of throwing full support behind it.