MPs urge VAT refund scheme for sixth form colleges

9th February 2015 at 08:44

A cross-party group of MPs has written to the education secretary urging her to support the introduction of a VAT refund scheme for sixth form colleges in England.

The 76 MPs, led by Conservative Graham Stuart, chairman of the Commons Education Select Committee, all represent constituencies which either contain or are served by a sixth form college.

In their letter they warn Nicky Morgan that “the VAT anomaly threatens the success of a high performing sector”.

At present, school and academy sixth forms have their VAT costs refunded by the government, while England’s 93 sixth form colleges do not. 

As a result, the average sixth form college has to redirect £335,000 of its annual funding away from the front line education of students to pay VAT, according to the Sixth Form Colleges Association (SFCA).

Last year a survey by the SFCA showed 68 per cent of its members had dropped courses and 71 per cent had reduced enrichment activities such as drama, music and sport because of funding pressures.

The Department for Education estimates that it would cost around £30 million a year to refund the VAT costs.

In response to a parliamentary question tabled last month, schools minister David Laws said that the government was “sympathetic” to the case for doing so but it was “not affordable”.

However, in their letter the MPs write that a VAT rebate “would be both effective and affordable” and urge the secretary of state to “give this idea serious consideration”.

Among the signatories are two former Labour education secretaries, David Blunkett and Alan Johnson and the chair of the public accounts committee Margaret Hodge.

Graham Stuart said young people should receive the same level of investment in their education wherever they choose to study.

“It would cost around £30 million per year to ensure students in sixth form colleges are treated fairly, a comparatively modest sum for central government that would make an enormous difference to the education of these young people,” he said.

“I would urge all political parties to commit to addressing this anomaly”.

James Kewin, deputy chief executive of the SFCA, said: “We are delighted that so many MPs from across the political divide are supporting our campaign to drop the learning tax.

"The money colleges pay in VAT would be better spent on the front line education of young people.  Students in sixth form colleges deserve the same investment in their education as their peers in school or academy sixth forms.”


Related stories:

Celebrities call for end to 'learning tax' on sixth-form colleges – January 2015

Sixth form colleges demand end to 'damaging' changes to funding – November 2014

Funding cuts force sixth form colleges to axe staff and courses, says report – June 2014



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