According to a survey by the British Boarding Schools’ Network of its approved agents around the world – which has been exclusively shared with The PIE News – the drop would represent a decline of 7,335 pupils.

It could also come at a potential loss of £293 million per year in fee income, based on average annual boarding fees of £40,000. Such losses could have huge consequences for many schools around the UK.

Suzanne Rowse, director at the British Boarding Schools’ Network, told The PIE: “It is important to remember that emotions are currently running high, causing agents and international families to be very concerned.

“It is vital we do not assume that there is a guaranteed pipeline of international students who will be able to afford higher boarding fees and that they will mitigate against the likely drop in local pupil numbers,” she added.

It is vital we do not assume that there is a guaranteed pipeline of international students who will be able to afford higher boarding fees

^{_{Suzanne Rowse, British Boarding Schools’ Network}}

The survey found that some international markets will be impacted more than others, with Thailand, France and Hong Kong recording the highest estimated decreases in international students in boarding schools next September.

Findings from the 180 agents who completed the survey suggest that there could be a 52% decrease in international pupils coming from Thailand next September. The survey also suggested students coming from China could drop by 20%, Hong Kong by 38% and France by 43% – all key source markets for UK boarding schools.

The survey comes after the new UK Labour government announced that independent schools would have to pay 20% VAT next year. From January, the government will remove the VAT exemption and business rates relief for private schools, in order to generate funding for 6,500 new teachers in state schools.

The survey found that many agents are concerned that families will choose alternative destinations for boarding schools, or international schools closer to home, as a result of the VAT policy. One anonymous agent said: “Stop this plan or Chinese students will go to other countries to study, and the UK will lose out.”

Another said: “Parents [are] rethinking their decision for their children to study in the UK. Some will change to Australia and Singapore, with closer location to China and smaller time difference.”

Parents rethinking their decision for their children to study in the UK. Some will change to Australia and Singapore, with closer locations to China and smaller time difference.

^{_{Anonymous survey respondent}}

Rowse added that agents reported that international families’ reaction to the VAT policy is shock, anger, frustration, anxiety, concern and mistrust of the UK. European families have already been impacted by Brexit, with additional costs for visas.

She said: “Many students will be unable to afford to stay at their school and finish their courses, which will be especially detrimental to those due to take exams next summer.

“This policy is changing the buying behaviours of many international families – they are now looking at study options in other countries rather than the UK, delaying their study in the UK, or staying in their home country to attend one of the growing number of international schools on offer. This is not a time for our sector to be complacent.”

The impact of the VAT on school fees will have “serious negative impact” on the wider education market in the UK, the British Boarding Schools’ Network stressed, with a potential loss of income from the international students who stay for university after boarding school.

Most agents who responded (80%) predicted that almost 1,000 boarders currently at a British boarding school will not finish their course as a direct result of the VAT policy.

Agents called for schools to be transparent about their fees policies and what the exact costs will be for next year. One agent said: “The more we know, the better we can support the families. Even if you can tell us when you will have a plan in place.”

Rowse also echoed this: “Our advice to our member schools is to keep in regular communication with their agents not just via email but also via one-to-one online calls and webinars to provide support, maintain trust and transparency. Whilst schools are wrestling with their school fees policies, they need to mindful of the challenges that our network of valued agents are also facing right now, especially those who specialise in UK boarding placements and collectively place thousands of international students into UK schools.”

In messaging to its members, the network stressed: “Agents told us that they stopped working with schools who did not keep open communications with them as it eroded their trust.”

The network also highlighted that many agents are concerned about their businesses as a direct impact of this policy, especially those who are focused on student recruitment for UK schools. “Many of our agents have dedicated years of service to recruiting students for British boarding schools and they value their partnerships with schools,” it said.

“Our survey shows that agents are not only concerned about the decrease in student applications for UK schools, but also that commission may decrease as well, which will have a significant impact on their businesses.”

The British Boarding Schools’ Network shared the survey report with The Treasury as part of the government consultation with recommendations, which closed on 17 September. The findings have also been sent it to its member schools and agents.

Rowse said: “I hope it will inform decision-making whilst we await the government’s final decision on the policy on 30 October.”

Once the government finalises the policy on 30 October, it’s assumed that more schools will confirm their fees, and agents and families can make informed decisions. Not all schools will pass on the full 20% VAT – some have already announced their fees for next year, while others have yet to do so, Rowse added.  

While it’s still unclear by how much schools will raise their fees, it’s estimated they will increase by 8-15%. Sources have suggested that schools who can afford to will likely try to absorb some of the costs and diversify their revenue as they think more commercially.

Some schools will absorb the costs of the added 20% tax, while others will add the full percentage to their fees.  

Eton College has already written to parents informing them that it is adding the full 20% VAT to its school fees from January, taking its annual fees from almost £53,000 to more than £63,000.

Established in 2006, the British Boarding Schools’ Network has been working in the sector for 18 years to connect schools and recruitment agents. It has a global network of more than 350 agents.