Claire Coutinho’s parents arrived from India with £200 to their name in pursuit of what Michael Howard called the “British dream”. But what they really wanted, she says, was a British education for their children. It worked: she won a full scholarship to James Allen’s Girls’ School, one of the best schools in the country, and last month joined the Cabinet as Energy Secretary at the age of 38. She was a bursary success story but, as such, is an endangered species. This whole system may be kiboshed by a Labour government.
Labour isn’t abolishing bursaries but that will be the result, in all too many cases, of Keir Starmer’s decision to impose VAT on school fees. Until now, there has been an unofficial agreement. Parents don’t pay tax on school fees and in return the schools do a lot of outreach, bursaries and almost 9,000 partnerships with state schools. About a third of private school pupils are on scholarships or bursaries paid for in part or full. There’s all kinds of schemes: helping with Saturday lessons, Covid catch-ups and after-school classes.
But without the tax-free status, the incentive vanishes. Starmer says that schools don’t have to pass his VAT rise on to parents, but this is precisely the danger. They’ll urgently cut what costs they can. “The bursaries will be the first to go,” one school head tells me. “We won’t announce it, but the outreach work has to be first for savings – otherwise it’s staff cuts or fee rises.” Starmer, it seems, is only now working out the implications of this.
His concession yesterday – to let private schools keep charitable status – is meaningless as he’d still impose the 20 per cent tax. The wealthiest families would, of course, be able to stomach this. The losers would be middle-class parents already forgoing holidays to afford fees (as Michael Gove’s parents did for their adopted son). Depending on who you listen to, between 17,000 and 135,000 pupils will end up back in the state sector, but no estimate has been made for the drawbridge-up effect this will have on the remaining schools.
Take Starmer’s alma mater, the £21,000-a-year Reigate Grammar. Its bursaries work out at 100 fully-funded places a year, so children from modest households are able to enjoy the same quality of education as Sir Keir. How many would continue to do so once their Old Boy is in No10? Reigate was free, a state grammar, when he was there. But his reforms will make it even more exclusive, more narrowly focused on parental wealth. Sunak personally funds scholarships to Winchester, his old school. He wants to make it easier for bright boys from modest means to follow in his steps. So yes, a big contrast between their approaches.
The cash Starmer raises from VAT on schools is supposed “to invest in a brilliant state education for every child”, according to Bridget Phillipson, the shadow education secretary. In truth it would lift the schools budget by about 3 per cent: this will struggle to make a noticeable difference, let alone magic up “excellence”. As we found with the “pupil premium” introduced by the Lib Dems in the coalition years, education is disappointingly unresponsive to cash boosts. Studies show no direct relationship between school funding and attainment. But the culture in schools certainly does matter.
Last week I was invited to talk to pupils at Teddington School, a stunning 1,500-pupil secondary in southwest London that has swapped its bad Ofsted rating for a “good” one. Why? It was taken over by the Bourne Education Trust, an academy chain. The culture changed, as did the results. Nearby there’s Feltham College, a new state sixth-form sponsored by two of Britain’s best private schools: Hampton and Lady Eleanor Holles. The idea is to share teachers, expertise and excellence. It’s the know-how, the sharing, the ecosystem – in short, the art of teaching – that makes the difference.
This is the direction that Britain has been heading in: where the divide between state and private has been lowered by ever-more collaboration. At Latymer Upper School in London, a fifth of the income is now spent on bursaries and 450 state school pupils go there on Saturdays, benefitting from its facilities. It has a primary school debating programme, a weekend STEM academy and more. To Latymer’s headteacher, Starmer’s plans are “economically illiterate”. But they make political sense, lending a class-war narrative.
Of course money matters. But teaching matters most of all, and a system where private schools compare notes and mix with state schools stands the greatest chance of spreading school excellence. Forcing these two systems apart, with a tax change that almost instructs charitable schools to behave like selfish, profit-seeking companies would worsen inequality. All in pursuit of a sum of money that is, in today’s tax terms, a rounding error. This is why it was Jeremy Corbyn, not Blair or Brown or even Callaghan, who proposed the change.
No independent school will go public about the cuts being planned now, nationwide, in preparation for a Labour victory. But all will try to soften the blow, given how many will be fighting for survival. My guess is that we’ll see the difference over time: by year three of a Starmer government we’ll notice the slowing of state-and-private partnerships. The annual tally of pupils on bursaries will show a sharp fall. The posh schools will become a lot posher. And thousands of families saving for fees will be hit far harder.
There is another way. Starmer could put his VAT plan out to a consultation, to scope out the likely educational damage. Then try to look at alternatives: a new deal with private schools, perhaps, where they significantly increase their outreach.
The neglected “joint understanding” between government and private schools struck under Theresa May could be developed. Much more could be done. Many of the bursaries could be much more generous: private schools could be enlisted to promote local centres of excellence in subjects like Latin or languages.
Starmer said, yesterday, that he has nothing against private schools. If so then there’s time, even now, for him to realise that accepting their help will do far more to help state education than a VAT policy that would force the two systems ever-further apart.