The High Court decision on the TAX change by the Government (part 2)

Claires Court is one of over 1400 private schools who form part of the Independent Schools Council.

The ISC Board met on Wednesday, 18 June. Below is the statement that was issued by ISC to all schools at 12 noon the next day. As you can see, the ISC Board has voted not to appeal against the judgment. You can find their explanation below my next 5 paragraphs of commentary.

My view is that the change in Tax treatment for Tuition fees makes no sense to the parents now having their fees increased, to the school finance offices that now have their work made perhaps 30% more complex so as to treat all the different shades of tax exemption and tax at 0% in order to calculate the tax to be paid to the VAT man and how much to claw back or indeed to the wider education sector that;s not going to see any of the money raised come their way.

The tax change is causing some great, historic schools to close, and where there are not local state sector alternatives, so the education authority concerned (and there are several) have to work out how they are to fill the gaps. The acceleration in closures has come, 4 last week, and this means that adults and communities have lost work, presence, pride in what they do and loss to local providers, retail and services. Many local authorities have no places for the displaced secondary children, and it was the local authorities that initially begged the government not to impose VAT too early that have to clear up their mess. And that’s more to clear up in addition to the incredible crisis in Special Educational Needs and Education Welfare services.

The government know that they may have won the specific case but not the deeper argument. There’s no crowing from the specific politicians concerned. 6,500 new teachers are not coming into the state sector, the significant transfer of pupils from private to state means the net cost of education to the government has grown and the madness of suggesting instead that it’s going to help the state to build lots more houses by the Prime Minister makes him look even more foolish.

For the past 10 years and more, the country has cried out for stable, sensible leadership from the government of the day. Instead, they gave us NHS and Education reform, they gave us Brexit, they’ve even tried to modernise the armed forces and build HS2. I look back to the successes of the London Olympics in 2012, and thanks to the Sutton Trust, we know that 24 of Team GB’s 65 medalists, or 37%, were educated at private schools. We can smile too that Queen Elizabeth (home education), Danny Boyle (Direct Grant) and Daniel Craig (Sixth Form Grammar) all were educated too in a manner this Education Secretary abhors. It’s the very success of the diversity in Education that the United Kingdom offers that has made our education sought after across the world – but sadly, one lesson this government is unlikely ever to learn.

The judgment in the High Court case, backed by the Independent Schools Council, was handed down last Friday. As you will know by now, the three judges ultimately dismissed the case, alongside two other cases brought by Education Not Discrimination and Christian Concern.

Since the judgment, the ISC Board has been considering its next steps carefully. There are grounds for appeal, though the advice received by lawyers has been that this would be an uphill battle.

After careful consideration, the ISC Board has decided against supporting an appeal.

We felt it was right that this unprecedented tax on education had its compatibility with human rights law tested. However, having now made our arguments in court, we did not wish to put further resource into an appeal that would, in general terms, tread the same ground. Our focus remains on supporting children, families and schools – something we are more easily able to do without the constraints of protracted court proceedings.

Although the outcome last week was not what had been hoped for, there were nevertheless many positives that ISC will be carrying forward from the judgment, both in public messaging and behind-the-scenes lobbying.

Independent education is protected

During the court hearings, government lawyers argued that human rights law did not stop the government from abolishing independent education in its entirety if it wished to (although there was no suggestion this was a current policy position). This assertion was firmly rejected in the judgment, which was clear that human rights law protected the freedom to establish independent schools.

Children’s rights were affected

The judgment reaffirmed that the right to independent education is protected under the European Convention on Human Rights (Article 2 Protocol 1), as is the right to non-discrimination (Article 14). It also affirmed that changes to the structure or cost of education can engage these rights. In the case of VAT, the Court found that the policy did interfere with the rights of pupils and, on the face of it,had a discriminatory impact on certain cohorts of pupils. Having reached that conclusion, however, it was ruled that such interference was lawful as it was within the “margin of discretion” that Parliament enjoys when making such policies.

Challenging inaccurate rhetoric

Throughout its submissions, the government repeatedly referred to the decision to levy VAT on fees as the abolition of a “tax break”. The High Court described this as more of a slogan than a legal description and chose instead to describe the measure as a “tax change”. This more neutral language strips away what the court described as “presentational” labels, with the focus instead on the substance of the measure and the impact on children and families.

An acknowledgment of diversity within the sector

The case considered the circumstances of a wide variety of claimants in different types of independent schools and with very different backgrounds. Two areas of particular concern – provision for children with special educational needs and disabilities (SEND) and the impact on Charedi Jewish schools – were given serious attention by the judges. Even though the Court did not mandate an exemption for these vulnerable groups, its acknowledgement of them, added to its highlighting of the systemic failures within SEND, validates what many in the sector have been saying for years.

A framework for holding the government to account

While the Court accepted that the government’s revenue forecast of £1.5 billion annually was based on a rational process involving the Office for Budget Responsibility (OBR), it did not delve into whether that analysis was comprehensive as well as rational. ISC will continue to hold the government to account – both publicly and privately – on the claims politicians have made and to challenge them where the rhetoric is not being matched by reality, action or funding.

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About jameswilding

Academic Principal Claires Court Schools Long term member & advocate of the Independent Schools Association
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