by A small private rural school is cutting fees by more than a third to save it from “death” under Labour’s VAT plans.
Bedstone College in Shropshire will reduce fees for day students from £5,500 per term to £4,000 from next January, when the Government’s tax levy on private schools comes into force.
Toby Mullins, the headteacher, said the school has already been “cut to the bone” by money-saving measures and will now have to try “an entrepreneurial stop in the dark” to stay competitive.
It means that local parents will be charged £12,000 a year from next January, down from £16,500 at present.
Mr Mullins said: “It’s going to be a doomed event for us if we don’t do something soon.
“We don’t have rich parents. We have a lot of parents struggling to pay the fees – I know for a fact because we’ve started getting temporary notices from people saying they were worried they wouldn’t be able to pay the fees at all habit.”
Bedstone College is home to around 140 day pupils and boarders aged between four and 18, but there is capacity for more than twice that number and the number has declined in recent years.
Contingency plans
The small rural school has been devising a contingency plan for the months ahead of a possible Labor administration, but was forced into action this week after the Government brought forward its VAT plans.
This move has encouraged private schools to draw up cost-cutting measures in order to avoid the 20 percent levy on parents as a whole.
But Mr Mullins said his school had already “done that” and there was not much left to cut. He added: “We’ve been doing that for years. And to be honest I think we are cut to the bone.
“My staff haven’t had a pay rise in years that I can remember – they are extremely loyal and are working on salaries that are well below what the maintained sector is paying now.”
He hopes the fee reduction will help retain existing parents and attract others who might opt out of the more expensive neighborhood schools, even if Bedstone College doesn’t have “the wild flash or very good resources”.
Set in the heart of the Shropshire countryside, it focuses on small classes, pastoral care, and “a safe, nurturing, quiet environment where children can be themselves and thrive”.
It comes as experts predict some parents may “move down the food chain” to cheaper private schools to avoid the pressure for top grammar places when the VAT charge comes into effect.
‘A hand in the dark’
The Government admitted earlier this week that its VAT plans will price some parents out of the sector, with analysis by the Institute for Fiscal Studies predicting it could put pressure on up to 40,000 private school pupils.
Mr Mullins said: “There will be a lot of parents in this part of the world who will be in the same situation and they will be looking around for nearby state schools where they can send their children, so my feeling was what why not. ‘We are not the initiative and really provide a cost-effective offer? It’s an entrepreneurial shot in the dark.
“For people coming in from outside we would be offering a much better value than what they are getting. Some of the schools around here are paying £7,000 a term – even the cheapest ones are £5,500 a term.”
Bedstone College charges less than half that of some of its bigger neighbors such as Shrewsbury School, where fees are almost £34,000 a year for day students and up to £50,000 for international boarders.
Mr Mullins’ school charges up to £39,000 for overseas residents, who make up around 30 per cent of the pupil roll. Although fees from these students could be a buffer for the school in the coming months, he fears that local parents will be priced out and that they will lose the life of the school if the prices of the day students are not reduced.
Bedstone Educational Ltd, the school’s parent company which is owned by a Chinese investment firm, made an overall loss of £1.2 million in 2022, according to its latest financial accounts. The directors said “student recruitment levels” were among the main business risks, exacerbated by travel restrictions in the wake of the pandemic.
Mr Mullins said: “We’re owned by a Chinese group and although they’ve been quite generous in supporting us financially, there’s a limit to how much they’ll do in the future. I can’t expect them to bail us out every time.
“Unfortunately the market is rough at the moment. If we could get even 10 new pupils it would work cost-effectively for us. If we got more than that it would be great.”
Special learning
The principal also hopes that his school could be a haven for students with special educational needs who cannot be accommodated in the state sector.
Around a third of Bedstone College pupils have special educational needs, including six receiving education and health care plans (EHCP) – reserved for children with the most complex needs whose fees are sometimes covered by the local authority.
It is one of 23 schools across the country that have a specialist learning support center for dyslexic children, according to the Council for the Registration of Schools Teaching Dyslexic Students.
“Parents who prioritize small class sizes, good manners, and children with special needs, there’s not a huge choice for them,” said Mr Mullins.
Private schools already teach more than 100,000 children with special needs, and a further 8,000 pupils with EHCPs. Under Labour’s plans, children with the “most acute needs” who receive an EHCP will be exempt from the VAT hit, but pupils with special educational needs will not be.
It has fueled concerns that the Government’s VAT raid could hit children with complex needs the hardest, with the wealthiest families able to pay for any fee rises.
The Independent Schools Council (ISC), which represents 1,300 private schools across the UK, said the plans made closures “inevitable”.
‘Closings are inevitable’
Sarah Cunnane, from the ISC, said: “We are very concerned about what this policy will mean for our schools and how many will be closed.
“Sadly, the closure of schools is inevitable and will ultimately affect the families who have chosen to use them and affect the education of thousands of children.”
Rachel Reeves said earlier this week that there was an “obsession” with private schools even though they are only a small part of the education sector.
The chancellor told LBC on Tuesday: “I’m more interested in the 93 per cent of children in our state schools where buildings are often falling down, with unqualified teachers.”
Labor hopes its VAT raid will raise up to £1.7 billion for the state sector and help pay for 6,500 new teachers, 8,500 mental health specialists and 1,000 careers advisers for schools.
The Department of Education has been contacted for comment.
