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Families in crisis as countdown begins to Labour’s private school fee hike

Private School Labour
Labour has confirmed in its manifesto that it will end the VAT exemption for independent schools - Stefan Rousseau/PA

Are you having to borrow from the bank, a loved or your property to pay school fees? We want to hear from you, email: money@telegraph.co.uk

Labour’s plans for private schools are becoming a stark reality for parents.

The party confirmed in its manifesto this week that it will end the VAT exemption for independent schools, which could add 20pc to fees as early as September.

But with average annual day school fees already at a record £18,063 – up from £16,656 last year – many families are at the limit of what they can afford.

The worry is that a further hike will resign them to battling for a place at an oversubscribed state school.

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Hoping the problem will go away is no longer an option. The latest polling puts Labour more than 20 points ahead of the Tories – and points to a huge majority in the Commons in less than three weeks’ time.

Some parents are considering remortgaging their homes, moving abroad or even changing religion to keep providing their children with a top quality education.

Edward’s* two children, aged seven and 10, attend a “fantastic” mixed private school on the outskirts of Epsom. He said parents are feeling “frustrated and angry” at Labour’s policy which has forced him to consider pulling both children out.

“All our local schools are heavily oversubscribed,” he said. “The only one which isn’t and within our catchment area has the Ofsted rating of ‘needs improvement’ and has prior issues of knife crime.

“The other option is to home-school them. But it means my kids will miss out on being surrounded by friends, interacting, playing and learning together. This will be damaging to them and their mental health.”

He and his wife both work full time in the City and are on “good salaries”, but having to find an extra 20pc for school fees is “a complete no-go.”

“It’s causing us sleepless nights,” he said. “At Eton and Harrow there’ll be Bentleys outside. At our school the parents are ordinary working people – roofers, painters and decorators, taxi drivers. You see doctors and nurses coming in their scrubs straight from work.”

The couple has even considered trying to get their children into the local Catholic school, despite the family not being Catholic.

“Do we have to start changing our religion to attend a nearby comprehensive? We would have to renew our wedding vows.

“If you’re not Catholic you drop down to 13th rank on the priority list. But even the Catholic school is at full capacity. Or we could sell our house – but even then you still have no guarantee you’ll get in. It’s ridiculous – you may as well move abroad.”

For families already considering quitting Britain for higher pay, lower taxes, sunshine and a better quality of life, a steep increase in school fees will be the final straw. But those on more modest salaries do not have this escape route.

Ellen* and her husband live in Oxfordshire with their 12-year-old daughter who attends a private girls’ school costing £7,500 a term.

Their daughter was at a state primary, and the expectation had been for her to go on to the local comprehensive.

“Our hearts weren’t singing about this but we couldn’t afford to go private,” said Ellen, who works a “low-grade” admin job at the University of Oxford. Her husband is out of work after Covid forced his business to close.

But after attending a community outreach programme run by a prestigious private school, her daughter applied for a means-tested bursary, and won a place.

The family’s household income is low enough for her daughter, who is “flourishing” at the school, to have 100pc of her fees paid for.

Ellen is “incredibly grateful” for the financial help from the school, but worries what will happen if the bursary does not rise to match a 20pc increase in fees.

“An extra 20pc would work out at £4,000 a year,” she said. “Money is very tight, and this would be a complete non-starter. It would not be at all affordable.”

Ellen is also anxious that the bursary might be removed altogether. Headteachers have warned that the VAT raid would force private schools to cut scholarships and bursaries to the poorest students.

A total of 182,675 pupils currently receive some level of help with their fees, representing a third of all private school pupils, according to trade body the Independent Schools Council.

The value of this financial support hit a record £1.4bn this year, up 10.2pc on last year, with an estimated 80pc provided by the schools themselves.

Ellen says she would be forced to send her daughter to the local secondary school if the support is withdrawn.

“It would be a dreadful outcome – [the school] is really oversubscribed. I would not look forward to having to explain that to my daughter.

“What I’m most sad about is the division [the policy] will cause. It will deny other kids the opportunity my daughter had. Some children, especially those with special educational needs, are just not suited to the state sector.”

Parents have already been hit by substantial increases in fees in recent years. Average fees for boarders went up nearly 9pc in 2023 and now stand at a record £42,459 a year.

Families resort to remortgaging homes

David Boddy, chair of ASIS, a business consultancy for the education sector, told The Telegraph that parents are remortgaging their homes in anticipation of Labour’s VAT raid. 

He described how one family from Birmingham was considering taking out a loan to keep their two children in private school.

He said: “The father came to me with tears in his eyes saying we just don’t know how we can continue if fees go up another 20pc.

“When you see these hard-working middle and working class families who really value education, it’s heartbreaking.”

William* and his wife have two children aged nine and 11 at an independent school near Southampton.

He runs a recruitment company which his wife also does some work for, as well as being a stay-at-home mother.

“We are a hard-working family,” he said. “A huge proportion of our total earnings is spent on our children’s education.

“The school is very well regarded locally and has provided an amazing start to life for children over many years, but this could be the final straw.

“Fees have been rising at uncomfortable rates in the last few years, it is already a squeeze, and this is with the school keeping increases to an absolute minimum.”

He adds that the atmosphere is “awful” among parents at his children’s school, who “genuinely feel like it’s a terrible policy.”

“To add 20pc seems bonkers. There’s a misperception that everyone in the system is rich – and that schools can afford it.

William has calculated that if fees rise by 20pc he would need to find an extra £8,000 a year, which he would struggle to afford.

“Our options would be to pull the kids out and apply for state school places or spend less on other things – save less and not pay into our pensions.”

Sir Keir Starmer has promised to spend part of the £1.5bn he claims the policy will raise on plans for empty primary school classrooms to be turned into nurseries to create an extra 100,000 childcare places.

Around a third of the of the money will go towards recruiting 6,500 new state school teachers.

But headteachers have warned that Labour must stem the recruitment crisis plaguing the teaching profession if it hopes to make meaningful improvements to the state sector.

William believes the policy will not only cripple hard-working families, but also fail to achieve its stated goals.

“It feels like a cheap political message. It’s misleading the public – it tries to say that the money will pay for thousands of new teachers.

“But there’s an exodus of teachers from the profession and schools can’t fill the vacancies they’ve got – so what benefit is creating more vacancies?”

*Names have been changed.