Private school slashes fees to save itself from extinction

A small rural private school is slashing fees by more than a third to save it from “extinction” under Labour’s VAT plans.

Bedstone College in Shropshire will reduce fees for day pupils 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, headteacher, said the school has already “cut to the bone” through money-saving measures and it will now have to try an “entrepreneurial shot in the dark” to remain competitive.

It means local parents will be charged £12,000 per year from next January, down from £16,500 currently.

Mr Mullins said: “For us it will be an extinction event if we don’t do something pretty soon.

“We don’t have rich parents. “We have a lot of parents who struggle to pay the fees – I know for a fact because we’ve started getting provisional notices from people saying they were worried they wouldn’t be able to pay the fees anyway.”

Bedstone College is home to around 140 day pupils and boarders aged four to 18, but has capacity for more than double that and has seen dwindling numbers in recent years.

Contingency plans

The small rural school has been devising a contingency plan for months ahead of a potential Labor administration, but was forced into action this week after the Government brought forward its VAT plans.

The move has sparked a scramble among private schools to draw up cost-cutting measures in a bid to avoid passing the 20 per cent levy onto parents in full.

But Mr Mullins said his school has already “done that” and has little else left to cut. He added: “We’ve been doing that for years. And to be honest I think we’ve cut to the bone.

“My staff haven’t had a pay rise for more years than I can remember – they’re incredibly loyal and are working on salaries well below what the maintained sector is now paying.”

He hopes slashing fees will help retain current parents and lure in others that might be forced out of more expensive neighboring schools, even if Bedstone College is “not wildly flash or massively well-resourced.”

Set in the heart of the Shropshire countryside, it focuses on small class sizes, pastoral care, and a “safe, nurturing, calm environment where children can be themselves and thrive.”

It comes as experts predict some parents could “move down the food chain” to cheaper private schools to avoid the jostle for top grammar places when the VAT charge comes into force.

‘Shot 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 forecasting it could force out up to 40,000 private school pupils.

Mr Mullins said: “There’s going to be a lot of parents in this part of the world who will be in a similar situation and they’ll be looking around at state schools nearby they can get their kids into, so my feeling was why don’t ‘t we take the initiative and actually provide a cost-effective proposition? It’s an entrepreneurial shot in the dark.

“For people coming in from abroad we would be offering a much better value product than they’re 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 than some of its bigger neighbors such as Shrewsbury School, where fees are almost £34,000 a year for day pupils and as much as £50,000 for international boarders.

Mr Mullins’ school charges up to £39,000 for boarders from abroad, who make up around 30 per cent of the pupil roll. Although fees from those students could serve as a buffer for the school in the coming months, he fears local parents will be priced out and drain the lifeblood of the school unless it slashes prices for day pupils.

Bedstone Educational Ltd, the school’s parent company 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 key business risks included “recruitment levels of students,” which were compounded by travel restrictions in the wake of the pandemic.

Mr Mullins said: “We’re owned by a Chinese group and while they’ve been reasonably generous in supporting us financially, there’s a limit to how much they’re going to do that in the future. I can’t expect them to sort of dance us out every time.

“Unfortunately the marketplace is a rough one at the moment. If we could even get 10 new pupils it would work out cost-effective for us. “If we got more than that it would be wonderful.”

Specialist learning

The headteacher also hopes his school could become a haven for pupils with special educational needs who cannot be catered for in the state sector.

Around a third of Bedstone College pupils have special educational needs, including six who are in receipt of 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 just 23 schools nationwide to have a specialist learning support center for dyslexic children, according to the Council for the Registration of Schools Teaching Dyslexic Pupils.

“Parents whose priorities are small class sizes, good manners, and special needs children, there’s not a huge option out there 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 in receipt of an EHCP will be exempt from the VAT hit, but pupils with other special educational needs will not.

It has fueled concerns that the Government’s VAT raid could hit children with complex needs the hardest, while the richest families will be able to afford any fee hikes.

The Independent Schools Council (ISC), which represents 1,300 private schools across the UK, said closures were “inevitable” as a result of the plans.

‘Closures are inevitable’

Sarah Cunnane, of the ISC, said: “We have significant concerns about what this policy will mean for our schools and how many will close.

“School closures are inevitable, sadly, and ultimately that is going to affect the families who’ve chosen to use them and is going to disrupt thousands of children’s education.”

Rachel Reeves said earlier this week that there was an “obsession” with private schools despite them only making up a small proportion of the education sector.

The Chancellor told LBC on Tuesday: “I’m more interested in the 93 per cent of children who are in our state schools with buildings that 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 career advisers for schools.

The Department for Education was approached for comment.