Placing an additional 20% levy on private school payers will do nothing but deter investment away from a flourishing sector.
On a per-pupil basis the total funding allocated to schools for 5-16 year old pupils, in cash terms, in 2023-24 was £7,690 and currently an estimated 9.1 million students attend, averaging a total cost of nearly £70 billion per year (23/24).
It would be within the fiscal headroom for any government to increase by 50% the pupil premium from £7,690 per year in 23/24 (on average) to £11,535, thus increasing the total estimate cost from £70 billion to £105 billion and placing those in the state sector on par with privately educated students.
For the 11 years children remain in school, if a fee of £9,500 per year was levied over a period of 39 years post a student turning 21 years and on the basis that interest would only be payable at the age of 21, providing interest on the loan was set at 10.5%, the total yearly average interest generated over the 39 years would equal £8,500 (rounded per year).
Therefore meaning an additional £80 billion (rounded) would be generated, per year, to be spread across the 9.1 million students at the average payment, per student, would be £933.00 per month.
That would increase department of education funding from £116 billion per year, to £151 billion, an increase of 30% (before inflation).
Given there would be an additional £45 billion of headroom through this minor change in funding and the additional £35 billion of funding provided for 23/24, for the years 24/25, any government could reduce the department of education budget by £35 billion, in order to create an additional £80 billion of headroom which could be used to fund other services, or different elements of the department of education if they so wished.
In order to offset the increase due to the new funding model for the state sector, if central government was to subside council tax by 100%, that would incur a cost of £35 billion a year (allowing for £45 billion of headroom) and save families (on band C council tax) and average of £1800 per year, or £150.00 per month.
It is a general rule of thumb that increasing the income tax free allowance would incur a cost of £5 billion per £1000, therefore to increase the allowance from £12,570 to £20,000 would cost £40 billion and save per person tax payer on an income above £20,000 a year £1,450 per year while still leaving an additional £5 billion of headroom to contribute to the cost of funding additional school services, such as breakfast clubs and free school meals, all without having to impose any 20% levy on the independent sector.
Therefore, between council tax savings and income tax changes, families would save £3,250 a year, or £270 a month without having to a pay a single additional penny.
If people were to chose to save the £270 a month they saved, that would equal, without interest, total savings over the 11 years of £35,640, enough to clear the typical mortgage which had 20 years remaining, at a rate of 5.25% 6 years early.
Then once a student turns 21, providing the support was to continue and tax allowances increased by above inflation each year, the net payment would be £663 per month, or a saving of nearly £1,200 a month (6 years earlier) for someone who has a 25 year mortgage for £200,000 at 5.25%, meaning an average gain of £537 per month taking into consideration all the other measures. At the same time allowing for a 50% higher rate of funding for the pupil premium in the years 23/24 to ensure public sector schools were on par with the private sector in terms of money allocated per student and reduce the tax bills of parents who send their children to public schools by £270 a month.