EXCLUSIVE Historic £49,632-a-year boarding school axes teachers' jobs in wake of Labour's private school VAT raid

Daily Mail​

27-04-2025

One of the UK's most historic boarding schools is cutting teachers' jobs as pupil numbers fall in the wake of the Government's VAT raid on schools.
Loretto School – the alma mater of former Labour Chancellor Alistair Darling and broadcaster Andrew Marr – said the decision had been made because rising costs caused by VAT on fees were deterring parents from enrolling their children.
Staff at the school – the oldest school in Scotland which will celebrate its 200th birthday in 2027 - were told last week when they returned from the Easter Holidays that their jobs were at risk because of 'significant financial challenges' which were 'outside the school's control'.
The school near Edinburgh – which also has day pupils - has seen pupil numbers fall since Labour imposed its education tax on school fees in January, a school source told the Mail on Sunday.
It raised fees by 17% in January to up to £49,632 a year, absorbing 3% of the 20% VAT levy, with fees for the next academic year yet to be announced.
In a letter to parents seen by this newspaper, Head Pete Richardson and Chair of the Board of Governors Peter McCutcheon told parents a staff review was underway 'based on projected pupil enrolment which has been directly impacted by the VAT imposition'.
They told parents that they had been 'navigating the complexities of running a school in the current financial climate' and challenges including 'increases in VAT, national insurance and the minimum wage' had led to the decision to launch a staffing review.
Up to 8 teaching jobs are now expected to be lost after a redundancy process.
One parent said parents had been particularly affected by the imposition of VAT on fees in Scotland because they already faced higher tax rates than the rest of the UK.
Calling it 'a tragedy for the whole community including the wider community', she said:
'We are all shocked that staff now face losing their jobs and it shows the impact and the ripple effect of this awful tax not just on our children, on us and on schools but on staff and on wider communities who rely on schools as important employers.
'In what other country during such uncertain times, would any government strike at the private sector like this. It is incredibly frightening. Many of the staff live in this community and local suppliers and businesses rely on the school which is a big part of the local economy.'
Head Pete Richardson, who is in his first year leading the school, confirmed that he had the 'difficult task' of speaking to academic staff about job losses, and said the school was 'deeply committed' to ensuring they were treated with 'the utmost kindness, care and consideration'.
Hitting out at the tax, he said: 'The Labour Government's decision to implement VAT on school fees has had a marked impact upon the independent sector's ability to both retain and attract pupils.
'This is especially true when applied to the international market, a key element of our boarding numbers.'
He added: 'As Scotland's oldest boarding school, Loretto is also the custodian of several Listed buildings and these require investment in terms of upkeep, including the recent roof replacement of one of our oldest buildings, but schools like Loretto are so much more than bricks and mortar - it is its people, especially its staff, which make a School like Loretto great.'
Labour's VAT raid has now seen 22 independent schools around the UK close or announce closure since January with thousands of pupils forced to leave their schools and seek state school places, causing particular issues in over subscribed regions such as Edinburgh, the South East of England and Bristol.
A decision on a landmark High Court challenge against the Chancellor Rachel Reeves by parents of children with special educational need and the Independent Schools Council opposed to the VAT levy is expected within days.