General election 2024: mood across education sector marked by apprehension

Posted: 24/06/2024

It would be difficult to miss the main education related headline of this general election campaign: Labour’s pledge to remove the VAT exemption for independent school fees. It has been a point of great concern amongst independent school clients for some time. Much of the impact will depend on how quickly Labour intends to roll out the change.  

Our team has been working with clients and independent school sector associations to determine an appropriate way forward, if Labour does indeed win the election. Schools are unlikely to be able to absorb the VAT themselves, neither can they feasibly pass the cost directly to families. 
 
Many schools will have to become more creative with generating commercial income, such as by offering summer schools or hiring out facilities and we work with relevant sector associations to support these initiatives. It is worth noting that under the new regime independent schools may also be able to recover VAT paid on expenses such as building improvements, which is not currently the case. 
 
Labour has also announced several measures focusing on early years and schools, such as its commitment to hiring 6,500 teachers and to raising teacher standards. Meanwhile, the Liberal Democrats have more to say on areas such as reinstating maintenance grants and ensuring statutory duty of care for university students. A key question to ask the Conservatives might be: how would the introduction of national service impact 18-year-olds planning to go to university? The party has also committed to close university courses with high drop-out rates, but with no detail for how this will be determined. 
 
None of the manifestos propose radical change to higher education. However, the educational institutions we advise will continue to have the same concerns, the most significant being around funding.
 
Changing immigration laws are impacting the appetite of international students to come to the UK, bringing income universities rely upon. At the same time, domestic tuition fees have not kept pace with inflation. While Labour acknowledges that the current funding structure for higher education is broken, there is no mention of how to address this. Former ministers have issued warnings that one of the most pressing crises facing the UK could be universities going bankrupt – a prospect that will have multiple complex legal, political and personal implications for swathes of stakeholders. Whoever forms the next government faces difficult decisions in this area.

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