Graham Stuart supports VAT refund

A cross-party group of 75 MPs, led by Conservative Graham Stuart, the Chairman of the Education Select Committee, has written to Nicky Morgan, the Secretary of State for Education, urging her to support the introduction of a VAT refund scheme for the 93 Sixth Form Colleges in England.

At present, school and academy sixth forms have their VAT costs refunded by the Government, while 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.

The MPs, who all represent constituencies which either contain, or are served by, a Sixth Form College, warn the Government that “the VAT anomaly threatens the success of a high performing sector”. The letter has been warmly welcomed by the Sixth Form Colleges’ Association that published a survey last year indicating that 68% of its members had dropped courses and 71% had reduced enrichment activities (such as drama, music and sport) because of funding pressures.

The Department for Education estimates that it would cost in the region of £30million per annum to refund the VAT costs of Sixth Form Colleges. 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” at the present time. By contrast, 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 MPs who have signed the letter are two former Labour Secretaries of State for Education (David Blunkett and Alan Johnson), the Chair of the Public Accounts Committee Margaret Hodge, and Green Party MP Caroline Lucas.  

Commenting on the letter, Graham Stuart MP said: “MPs across the House feel strongly that it is wrong that Sixth Form Colleges still have to pay VAT, when schools and academies can reclaim those costs. Young people should receive the same level of investment in their education, irrespective of where they choose to study.

“It would cost around £30million 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. I would urge all political parties to commit to addressing this anomaly”.

James Kewin, Deputy Chief Executive of the Sixth Form Colleges’ Association, said: “We are delighted that so many MPs from across the political divide are supporting our campaign to drop the learning tax. The money Sixth Form 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.”