Exclusive:Private schools seek UK Labour talks over fears 'regrettable' VAT blow will hit hardest in Scotland

Scottish private schools are seeking urgent talks with senior UK Labour figures amid growing fears the ending of their VAT exemption will hit hardest north of the Border.

The Scottish Council of Independent Schools (SCIS) has revealed it has written to shadow Education secretary Bridget Phillipson asking for a meeting to discuss the sector’s concerns. It comes as opinion polls show Sir Keir Starmer’s Labour Party is on course to oust the Conservatives from power at Westminster following Thursday’s general election.

One of Labour’s most eye-catching policies has been a pledge to end the VAT exemption on private school fees.

It has been suggested the move, which would add the standard VAT rate of 20 per cent to fees, will raise £150 million for Scotland’s budget, and surveys suggest it is popular with voters.

The impact will vary by school, but sector leaders believe the number of pupils at independent schools will “inevitably shrink” as a result of increasing fees, which average around £15,000 a year across the UK, although some are significantly higher.

SCIS chief executive Lorraine Davidson warned parents in Scotland were more likely to be left with no choice, but to withdraw their children from private schools as a result of the policy because income levels are lower than in parts of England.

She also highlighted uncertainty over Labour’s plan to continue a VAT exemption for children in England with additional support needs who have Education Health and Care Plans (EHCPs), given EHCPs do not exist in Scotland.

Ms Davidson said: “SCIS believes a full consultation is needed on the VAT proposal, so that the impact on Scotland can be fully considered. We have written to Labour’s UK education spokeswoman Bridget Phillipson requesting a meeting to discuss the impact of the policy on both the independent and state sectors in Scotland.” Some of Scotland’s most prestigious independent schools are also now publicly raising concerns about the policy.

A spokesperson for Fettes College in Edinburgh, which former Labour prime minister Tony Blair attended, told The Scotsman: “We have worked closely with SCIS on behalf of the whole sector to make the strong case for educational charities to remain VAT-free.

“We share the views of other schools that this is a very regrettable policy and are disappointed with the effect it will have on parents who make many sacrifices and difficult choices to send their children to independent schools.

“While there has been a lot of speculation, we can’t know exactly what the next steps will be until we see the outcome of the election and any announcements from the incoming government.”

It is understood SCIS has held constructive talks with Scottish Labour, but wants to make senior figures in the UK party fully aware of Scotland’s different circumstances. These include the fact Scottish independent schools already pay full business rates, unlike south of the Border, and face a more stringent charity test relating to public benefit.

The sector is asking for a full consultation relating to Scotland-specific circumstances, as well as time for schools to introduce new systems and for parents to consider their options.

A spokesperson for Loretto School in Musselburgh said: “Like most independent schools we are not in a position to absorb the full VAT increase for our parents. We continue to work diligently to be as cost effective as we can be and to keep our educational offering as affordable as possible.”

Fees have already been rising at some institutions, even before the impact and timing of the tax changes are fully known.

At George Heriot's School, in Edinburgh, the Governors have reviewed the budget for 2024/2025 and agreed an increase in fees for next session at 6 per cent. The school said the increase was borne from inflationary costs, known and anticipated increases in pay settlements, pension contributions and estate costs. 

It was recently reported George Watson's College, also in Edinburgh, had told parents it will put fees up by 9 per cent next year, from £15,951 to £17,388 for secondary pupils, to cope with "current and future financial pressures".

Lorraine Davidson, SCIS chief executive | Submitted

Whatever unfolds over the coming weeks and months, Ms Davidson hopes to see greater focus on potential collaborations between state and independent schools in Scotland in future. She highlighted the piloting of an International Sustainability Diploma at Dollar Academy, and Robert Gordon’s College’s RGC Online, which is already enabling pupils in local authority schools to study some subjects.

“More than four times as many people benefit from, as attend independent schools, and we are committed to expanding these valuable partnerships,” she said.

A Scottish Labour spokesperson said: “Labour is committed to delivering a much-needed funding boost for public services and ensuring schools across the country deliver the highest standard of education. “Scotland’s schools are at breaking point after 17 years of SNP failure and 14 years of Tory chaos and children are paying the price. These plans will boost the funding available for education in Scotland, so that we can break down barriers to opportunity across our country.”

Labour has claimed the VAT change could raise an extra £1.7 billion for the Treasury, with £150m coming to Scotland. Scottish Labour leader Anas Sarwar, who attended Glasgow private school Hutchesons' Grammar, recently suggested the money should be reinvested in state sector teachers. "We are taking teachers away from working-class kids' classrooms at a time when we are falling down the international education league tables,” he said. “That's why we think this is a proportionate thing to do, so we can give an immediate cash injection into state schools."