Sixth form Colleges across England are seeing millions of pounds they could be spending on students totally lost as, unlike schools and academy trusts, they don’t benefit from a Value Added Tax rebate scheme.
Now a cross-party group of MPs, including the Chairman of the influential Education Select Committee, has written to the Education Secretary urging him to support the introduction of a VAT rebate scheme for Sixth Form Colleges across the country.
Labour Member of Parliament, Alex Cunningham, a member of the Committee, was one of 74 MPs to co-sign the letter, in the hope that a scheme will be introduced and the resources invested in the young people from Stockton North constituency who attend one of the areas Sixth Form Colleges.
Despite taking steps to ensure that all providers of sixth form education receive the same amount of funding per student, the Government has failed to address this inequality and, as a result, the average Sixth Form College has to redirect £250,000 of annual funding away from front line education.
The Department for Education estimates that it would cost £20 million per annum to refund the VAT costs of Sixth Form Colleges – a step that the MPs believe to be both effective and affordable.
“It is completely unjustifiable that this anomaly is allowed to continue when all 16-19 education providers are now funded in the same way, particularly as Sixth Form Colleges are unable to cross-subsidise from the more generous funding available for pre-16 students as many schools and academies do.
“MPs from all sides of the House feel strongly that it is wrong that Sixth Form Colleges still have to pay VAT when school and academies can reclaim those costs, and we must take action to ensure that Sixth Form Colleges are able to compete on a level playing field with schools and academies.
“The changes to the way that 16-19 education is funded will see Sixth Form Colleges lose a greater proportion of their income than other providers, so a VAT rebate would help to ensure that they are able to continue to provide high quality education for our young people. The modest cost of £20 million per year seems a worthwhile investment to ensure significant returns in educational standards.”