The Flagpole

Firstly, many thanks to all parents who completed the parental surveys for their school before Half Term. As Principal I was particularly delighted to see the response to the first question “My child is happy at school”. Almost all parents who completed the survey agreed or strongly agreed with this statement which is a testament to the care and hard work of the staff in our all schools. As a member of the Independent Schools’ Inspectorate, I see survey results for other schools across the country, but rarely have I seen anything even close to our positive responses elsewhere.

The information you have provided via the survey will be analysed by the Heads and their teams with me and will help us focus on where any further improvement can be made in our schools. You will receive further feedback over the coming weeks.

Of course, during Half Term, we had the Government’s first Budget and this was not such good news. We were obviously extremely disappointed that the Chancellor confirmed that VAT will be applied to private school fees from January 2025 and Business Rate Relief will be removed from the following April.

As you may be aware, the Budget also contained some unexpected taxes including a significant increase in employers’ National Insurance contributions which adds significant extra financial burden. Despite this the Foundation stands by its commitment to you to minimise the impact on families by reducing our fees from January 2025 as outlined last August.

Princethorpe College Fees 2024-2025

Additional cost to parents over 2024-2025 year - £562

The figures for the Lent and Trinity Terms represent a termly net fees reduction of 12.5%, so that VAT is applied to a lower figure than would otherwise be the case. The increase passed on to parents is 5%. Whilst we appreciate the increase will be challenging for those balancing family finances, we hope that the rise being substantially below the 20% VAT rate, along with the assurance that we will remain focused on minimising the scale of any subsequent year increases, gives clarity and reassurance.

As stated previously, our strategy is to ensure our fees are as affordable as possible for parents whilst ensuring that we deliver the highest quality education. I was heartened to see from the parental survey that the overwhelming majority of parents think we have handled the difficult cards dealt us by the government very well, but having read all your comments I am only too aware that for a number of families paying school fees is a real worry.

Our underlying objective as a Foundation is to maintain the quality and variety of the pupil experience - delivering excellent teaching and academic outcomes, providing outstanding pastoral care, maintaining a broad co-curricular programme, and upholding the ethos that is central to our Foundation. As a charity, we must balance charging fees which enable us to deliver to this objective whilst holding our fees to the minimum level possible to ensure that they are as affordable as possible for fee payers choosing our schools for their children’s education. We are very mindful that parents will be keen to know the fees for 2025-26 as soon as possible; we have already started our financial modelling for the next academic year and will communicate with you as soon as we are able to.

Our schools remain strong and by continuing to manage our finances prudently, seeking to maintain the number of pupils we support, focusing carefully on our expenditure and increasing alternative income streams we will continue to focus minimising any increases in future years.

If you have any queries or comments on the January fee increase and the matters outlined here, please submit them using the link here.

Thank you as always for your support for our schools and to those parents who contacted their MP or made a submission to the public consultation.

How have you approached the imposition of VAT?

Our strategy in planning for this imposition of VAT has followed the following key principles:

• Many fee payers will not be able to meet a 20% increase in fees – so we must find a way of sharing the burden;
• We have found ways of reducing costs by forensically reviewing our budgets for 2024/25 and subsequent years, but without affecting the quality of education we provide;
• We may delay some new investment decisions for a period, without deferring our responsibilities to maintain our schools and estates;
• Being creative in how we can reduce base costs (for example we have invested in energy saving technologies over recent years to reduce energy usage and costs, we have driven a culture of minimising waste (energy, paper etc.) and have been driving efficiencies in terms of better use of IT and resources, moving to innovative digital solutions);
• We have been increasing income generation through commercial enterprise and fundraising and expect this to continue to grow;
• We will, of course, ensure that we claim back as much VAT as we are allowed, including from recent capital projects.

What are your main budget areas?

School budgets invest first and foremost in our dedicated and committed staff, both our teachers and support teams; that is not an area we can compromise on. Other expenditure involves all our support services as well as the maintenance of and new investment in our school buildings and estates. We do not therefore have large surpluses to offset against VAT charges but as a well-managed and carefully run Foundation we do hold limited reserves which can help us to manage unexpected circumstances.

What about the longer-term picture for fees?

Despite progress to contain costs and increase other income, you will appreciate it is impossible to offset the VAT charges without increasing total costs (including VAT) for fee payers and subsequent tax increases such as the NI hike, add more pressure on us all. But instead of a large one-off increase in January 2025 our intention is to phase any changes over the next three to four years. We have therefore agreed an increase (in total costs) in January 2025 of 5% on the basis that we will expect to have modest increases in the following two to three years.

In this way the Foundation shares the burden imposed by VAT with you and other fee payers.

Is there anything parents can do to further support the Foundation’s Schools?

This question was asked by a number of parents in the recent parental survey – thank you!
Yes, there are two specific things parents can do:

1. Continue to help spread the word about our schools. As parents you have your own networks, and endorsements from parents are very powerful, particularly when talking to families who do not know the Foundation schools and may be considering their options.
2. For those parents who are also donors, thank you, your donations are now even more valuable:

• For every £100 in fee income, we will now actually only receive £80 with 20% VAT applied;
• However, a £100 donation is not subject to VAT and as a charity we can benefit from Gift Aid. Under the Gift Aid scheme, for every £100 donated, we can claim an additional £25 from HMRC, making the total value of the donation £125. Additionally, donations may provide tax benefits for the donor.
• So donations are now 57% more tax efficient than paying school fees! This may be something we can utilize in the future to help keep the costs of sending your children to the Foundation schools as low as possible.
• If you are not a current donor but would like to find our more information, please do contact me directly.