Labour MP for Southampton Itchen, John Denham, has written to Secretary of State for Education Michael Gove, urging him to take action which will help sixth form colleges at Itchen, Richard Taunton and Barton Peveril.
John has joined a cross-party group of 74 MPs in writing to Mr Gove, supporting 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. This means sixth form colleges in Southampton like Itchen Sixth Form College and Richard Taunton Sixth Form College are losing out in comparison.
- Despite taking steps to ensure that all providers of sixth form education receive the same amount of funding per student, the Government has not yet addressed this inequality.
- As a result, the average Sixth Form College has to redirect £250,000 of its annual funding away from the front line education of students to pay VAT. By contrast, schools and academies can reclaim these costs.
- The absence of a level playing field in funding terms makes it more difficult to introduce competition amongst 16-19 providers, and so drive up standards.
Officials at the Department for Education estimate it would cost in the region of £20 million per annum to refund the VAT costs of Sixth Form Colleges. A VAT rebate would provide a much-needed injection of funding to build capacity in the sector and ensure that its high standards are maintained.
“This difference in treatment is unjustifiable. As 16-19 specialists, Sixth Form Colleges cannot cross-subsidise from more generous pre-16 funding streams, as do many schools and academies, or from significant adult and employer-based funding, as Further Education colleges do.
“This is also about fairness. If the Government want more competition between sixth forms then there needs to be a level playing field. At a time when almost half of all Sixth Form Colleges have had to drop courses, a VAT refund could help to rescue strategically important but less popular courses such as modern foreign languages and further maths. It would also free up funds to enable the sort of partnership activities the Government is rightly keen for Sixth Form Colleges to pursue.”