Friday, December 14, 2007

Do think tanks think?

I was taken by this piece in Wednesday's Telegraph which claims the Fabian Society is advocating:

Putting VAT on private school fees could finance an opportunity fund to tackle educational disadvantage,"
I haven't been able to find any detail on the web or at the Fabian Society* so can't vouch for its veracity, but lets assume that as the Telegraph is a reasonably accurate source we can take the statement at face value.

Anyway, when I read the piece something just didn't stack up so I thought I would do a bit of research to see what it really means.

Firstly, how much would be raised? The Independent Schools Council reckons there are 509,093 children in ISC schools so based on the Fabian's estimated £2,500 in VAT per pupil this would raise £1.27bn.

Now, my first though on this one is that the VAT would probably push the price beyond a number of parents so lets apply the well know 80/20 rule and assume that they only raise 80%, that would be just over £1bn.

However looking at the ICS figures for the number of children we find that there are 67,335 boarders @ an average of £6,712 for boarding per term and £3,715 for tuition per term, this leaves 441,758 pupils @ £2702 per term in tuition fees. Using my trusty excel spreadsheet I calculate that would raise £995m and applying the 80/20 rule would be £796m. You would think the big brains in a think tank could have done that calculation as well, wouldn't you? Still for the sake of analysis lets stick to their predictions for now.

Next, looking at the Department for Education and Skills, Departmental Report 2007 (H/T Mark Wadsworth for providing this link in his Statistics (UK) and Stuff section)we can get some stats for England.

The education for school children (excl. higher education and adults) budget for this year 2006/2007 is £40.75Bn (p98 (pp102/176))spread over 7.44m pupils (p57 (pp 61/176)) which works out at, using my trusty spreadsheet, £5,477 per pupil. Now that is the budget for England but the ICS numbers for UK so lets assume that 80% of the money raised in VAT is spent on schools in England (I reckon that's a bit generous, but its a number). This means there will be an extra £814.5m or £109 per pupil.

But if we assume that those parents who are forced to take their children out of schools put them in to state schools then the numbers are slightly lower than that, but I think you get the picture.

Now, what troubled this humble blogger was:

If we can't educate our children on £5,400 per pupil how the fuck do they expect to make a difference by spending an extra £109 (£80 by my reckoning) per pupil?

These think tanks really lose credibility when they come out with crap like this, because it isn't about raising the money, its about shafting parents who have the temerity to make sacrifices and instead of pissing their money away on holiday in Torremolinos, or wherever chav's go on holiday, want to spend it on educating their children, because the state can't.

After thought: I am sure I read somewhere that a % of all VAT has to go to the EU, but I haven't been able to track it down so if anyone can help on this score then I will amend these numbers.

Update 15 12 07

* As a result of this post I have been contacted by the Fabian Society to say that I could have received a copy of the speech if I had contacted them. They also dispute the figures that I use. The full text of their objection can be found in the comments section. I still maintain that beggaring parents who send their kids to private schools is now way to improve social mobility, other than down.


Mark Wadsworth said...

It's more than that - did you include £10 bn for Teachers' Pensions p125 and another £5 bn for capital spending?

If we are comparing like with like, we can assume that private school fees covers teachers' pensions and capital spend, I keep meaning to nail this down, actual spend is more like £7000-ish, which is roughly the level of the cheapest private schools.

Anyway, fuck VAT, it is the worst tax of all.

The Great Simpleton said...


Good point. I've just added £15bn to the budget and, as you forecast, it now works out at just under £7.5k per pupil. Public school tuition fees work out at £8.5k. I'm not sure why tuition fees for borders are higher, which skews the numbers a bit. Based on day pupils, public schools cost ££8.1k.

Its making school vouchers look better all the time.

If only the Tories would grow some balles, eh?

Mark Wadsworth said...

"Vouchers! Vouchers! Vouchers!" is my mantra. They will sort out at least 90% of education problems at a stroke.

Yes, base it on day pupils - to compare like with like.

Sunder Katwala, Fabians said...

Sorry, but your post is based on a misconception.The figures you quote are not from the Fabian Society at all. I presume they are an estimate made by the Telegraph or another commentator.

The Telegraph story was reporting a speech I made on educational inequality at the CEHR conference on Tuesday. The full link is below. (The discussion of private education is near the end).

You mention that you could not find the source. A number of people (media, members of the public) contacted the Fabian office, and were sent the speech. If had you contacted us, we would have been happy to provide this. If you could add a note clarifying this, that would be appreciated.

We are carrying out a major research project on educational inequality, which will be published next year. Our education research is credible.
Our Fabian Life Chances Commission did have its central education recommendation - a new PSA target to narrow the class attainment gap - adopted by government in the 2007 CSR, though we also made several recommendations which government has not adopted. That is what think-tanks do.

I was not setting out a full set of proposals but setting out the argument about why private education should be part of the mobility debate.

Professors Van Reenan and Machin who have led the authoritative LSE studies on mobility in the UK have written that "It seems that the strong relationship between family income and educational attainment is at the heart of Britain's low mobility culture".

Mark Wadsworth said...

GS, the Fabian chap/ess doesn't seem to be saying anything other than what you said they said. Or have I missed something?

The Great Simpleton said...


There argument appears to be that I didn't contact them before commenting. But you are right, they don't seem to be arguing with anything I said.

Mark Wadsworth said...