he government has pledged to look into “correcting an anomaly” that sees colleges pay VAT while school sixth forms escape the charge.
Three colleges in Cambridge teamed up with local MP Dr Julian Huppert to put pressure on Treasury ministers over the issue that has been branded within the sector an “absurd discrepancy”.
Cambridge Regional College along with Hill’s Road Sixth Form College and Long Road Sixth Form College were behind Liberal Democrat Dr Huppert’s questioning of chief secretary to the Treasury Danny Alexander MP in the House of Commons.
“Sixth form colleges and FE colleges like Hills Road and Long Road Sixth Form Colleges and Cambridge Regional College do excellent work, but face a very large VAT burden — some £300,000 for the sixth form colleges and well over £1m for Cambridge Regional College — that schools simply do not face, as well as being less well-funded than the schools sector,” said Dr Huppert during House of Commons Treasury questions on Tuesday, January 29.
It is manifestly unfair to treat sixth form colleges less favourably.”
“Will the government agree to investigate whether this anomaly can be corrected so there is a level playing field for sixth form colleges and FE colleges?”
Fellow Liberal Democrat Mr Alexander said: “We are taking steps year-by-year to equalize the funding arrangements. We will clearly have to look at that again in the spending round that will happen in the first half of this year.”
It comes a fortnight after Schools Minister David Laws told MPs: “I am sympathetic to concerns expressed about the different VAT treatment that sixth-form colleges receive from the government. I have asked officials to raise the matter with the Treasury and Her Majesty’s Revenue and Customs and to report back to me.”
Anne Constantine, principal of Cambridge Regional College, said: “The thousands of students at Cambridge Regional College, Hills Road and Long Road Sixth Form Colleges will benefit from a reversal of this unjust policy.”
Linda Sinclair, principal of Hill’s Road Sixth Form College, said: “It is manifestly unfair to treat sixth form colleges less favourably than other state-funded schools and academies.”
Chris Sherwin, principal of Long Road Sixth Form College, added: “Our VAT costs are in the region of £250,000 per year which would go a long way to helping us to maintain our very much older, but much-loved, set of buildings, and more importantly to maintain staffing levels.”
Mark Bramwell, associate director of sixth form colleges at the Association of Colleges (AoC), said: “An AoC survey in 2011 estimated that this absurd VAT discrepancy was costing colleges £250m a year.
“This is a significant amount of money which would be best spent on teaching and learning, particularly at a time of funding constraints for colleges.”
A spokesperson for the Sixth Form Colleges Forum said the VAT issue was just one example of the inequalities between colleges and schools that also included school and academy students being entitled to free school meals.
Mr Laws has told MPs the government was “currently looking at options for extending [free school meals] eligibility further across the 16-to-19 sector”.