We should give “education vouchers” for parents to spend on schools as they wish

Why not give every parent a voucher for £5,500 to spend on free state education or as a top-up for a private education?


It has always been a mild mystery to me why private schools cling so desperately to their charitable status. It can't save them particularly large amounts of money, particularly given how much they are expected to "give back" in terms of shared facilities and bursaries, and it brings them endlessly political bother, something most of them could happily do without. I suspect that if they could all find easy ways of getting out of the whole charity thing (it isn't easy, given the networks of trusts that finance them) they would.

Still, the efforts of schools to keep their shows on the road and the efforts of campaigners to stop them doing so do sometimes throw up interesting results.

Subscribe to MoneyWeek

Become a smarter, better informed investor with MoneyWeek.

This weeks is the suggestion from the Independent Schools Council that private schools could take in 10,000 children from low-income households every year if the government chucks in £5,500 per head, the cost of educating them in the state system (it is more like £6,100 in Scotland for worse results, but we will leave that hot potato aside for the moment). The schools would then cove the remainder of the cost.

There will be now be lots of trying class-related arguments over the idea. Does it help the needy or simply skim the good kids out of comps to the further detriment of the dim kids? Is it horribly unfair on parents who can afford private school? They currently subsidise the state education system by paying for it but not using it, and this would mean they would subsidise the system inside the private school they are paying for, too (someone has to cover the additional cost of the "free" kids).

Advertisement - Article continues below

But all that aside, the idea looks interesting to me because it references the possibility of a school voucher system, one in which every parent gets a £5,500 voucher per kid to spend on education as they like at a state school with no top up, or at a private school with top up.

We already do something like this with nursery care and it works pretty well so why not do the same with primary and secondary education? It would, as I wrote here a few years ago, "force rubbish schools across the spectrum to either raise their game or close", something that would push up standards across the country.

There is (as ever) a school of thought that thinks this will be no more than a subsidy for the rich vouchers they can take to existing private schools just get their kids the same education at less cost. But this rather misses the point.

This isn't about class warfare (remember that all the parents with kids at private schools at the moment are saving the state £5,500 odd a year each already) and the thrust of policy shouldn't be to find ways of penalising those who can already afford a good education for their children, but to try and make sure that everyone gets a good education whatever their parents' income level.

If everyone thought that was the case now, the independent sector would barely exist anyway, and polls such as this one wouldn't suggest that going on 100% of people would send their children to private schools if it were "free".

This initiative from the ISC isn't the same as a voucher system, of course (the schools pay the top up, not the parents). But if the government goes for it, it will be an interesting step in the right direction.

Advertisement - Article continues below

If the poor are allowed to transfer their educational cash around schools why should the not so poor (anyone prepared to make their own top ups) not be allowed the same privilege?




What are the best ways of raising more money in tax?

Given that whoever wins next week's election will be going on a massive spending spree, we're going to need to raise at least some of that money throu…
5 Dec 2019
Investment strategy

What are the biggest mistakes investors make when it comes to tax?

The tax implications of an investment are something we rarely consider until after the event. That could prove to be an expensive mistake, says Domini…
27 Nov 2019

Beyond the Brexit talk, the British economy isn’t doing too badly

The political Brexit pantomime aside, Britain is in pretty good shape. With near-record employment, strong wage growth and modest inflation, there is …
17 Oct 2019

How tax has shaped the course of human history

Taxation is as old as civilisation itself. But how much is too much? Dominic Frisby looks at how taxation, war and society have evolved together over …
16 Oct 2019

Most Popular

Pension tax

Why it makes sense to scrap higher-rate pensions tax relief

The point of pensions tax relief is to keep you out of the means-tested benefits system. The current system is ridiculously generous, says Merryn Some…
24 Feb 2020
Buy to let

Come back buy-to-letters, all is forgiven

The government is winning its war against small private buy-to-let landlords. But who benefits?
23 Feb 2020

Gold, coronavirus, and the high cost of face masks in northern Italy

The price of gold is spiking – as it always does in a global panic. But this bull market predates the coronavirus epidemic, says Dominic Frisby, and w…
26 Feb 2020

Is 2020 the year for European small-cap stocks?

SPONSORED CONTENT - Ollie Beckett, manager of the TR European Growth Trust, on why he believes European small-cap stocks are performing well.
12 Feb 2019