Scotland’s only Catholic boarding school has announced its closure, citing Labour’s plans to impose VAT from January as a factor.
Kilgraston School in Perthshire said on Tuesday that it had closed with immediate effect.
Parents, staff and former pupils were informed of the decision to close on Tuesday, with current students to be offered places at nearby private schools Glenalmond College and Craigclowan School.
It came after a planned sale fell through. The school, which was founded in 1930, said Achieve Education, the education provider, had pulled out of the deal after it “reassessed its commitment to investing in the school”.
In a letter, the school claimed “the possible impact of VAT on school fees” was also a factor in the decision.
The letter also suggested that Labour’s VAT plans could impact pupil numbers without the financial support from Achieve Education. The school only had 173 pupils, below the benchmark of 210 children needed for it to break even.
School had £860,000 funding black hole
Kilgraston launched a £2 million fundraising campaign last year after a previous threat of closure, which saw parents, alumni and donors raise £1.2 million within 48 hours in an attempt to save it.
But the £39,000-a-year school said on Tuesday that Achieve Education had backed out of the sale unexpectedly, leaving it with no choice but to shut in light of “both a short- and long-term funding deficit”.
The letter also said that the school had an £860,000 funding black hole for the next academic year, plus £3.4 million of outstanding loans and finance commitments.
The Board of Trustees added in a statement that it “has explored a number of opportunities in a bid to save the school but unfortunately none of these have offered a financially viable solution. This leaves the school with no choice but to close”.
“We will do all we can to help ensure a smooth transition for all affected. We are very sorry not to be able to continue operating a school that is close to all our hearts,” they said.
Liam Kerr, the Scottish Conservatives’ education spokesman in Holyrood and candidate for Scottish Conservative leader, said the closure was an “early indication of the impact of Labour’s policy of imposing VAT on education”.
Private schools close
It marks the latest private school to blame Sir Keir Starmer’s plans to start charging VAT after being forced to close.
Alton School in Hampshire announced in May that it would shut this summer, citing Labour’s tax policies for forcing parents to remove their children and place them in the state sector.
The school said in a statement that “adverse political and economic factors” had drained pupil numbers, leaving it “unviable” to run.
Classroom doors at the £18,000-a-year Catholic school, which catered for 370 pupils, closed for the final time last month. It had suffered from dwindling pupil numbers in recent years, but parents described the VAT plans as the “final nail in the coffin”.
Downham Preparatory School in Norfolk also announced plans to shut this summer as a result of financial pressures exacerbated by Labour’s VAT plans.
Elizabeth Laffeaty-Sharpe, the founder and principal, described the party’s plans to start charging the 20 per cent levy as soon as possible as “the straw that broke the camel’s back”.
The principal said that the prep school, which charged £7,800 for most pupils, would have been forced to pass the levy onto “ordinary parents like plumbers and electricians”, most of whom could not afford fee rises.
Rachel Reeves, the Chancellor, announced last month that the Government will start charging VAT on private schools from Jan 1 2025 – far sooner than the party had originally indicated.
Treasury documents published alongside Ms Reeves’s announcement admitted the plans would price some parents out of the sector.
“The Government recognises that these policy changes may lead to increased costs for some parents and carers, and that some pupils may subsequently move into the state education sector,” the documents said.
It marked the first time Labour had acknowledged in writing that its VAT changes mean private school will become unaffordable for some families.
Ministers are understood to have brought forward the VAT plans for private schools substantially, with Labour insiders saying just weeks before Ms Reeves’s announcement that it would not come into force before Sept 2025.
The Chancellor also announced anti-forestalling legislation to crack down on pre-payment loopholes immediately.
The Government hopes the policy will raise £1.5 billion to spend on raising standards in the state sector, including plans to recruit 6,500 new teachers and 8,500 mental health specialists. Labour has not set a deadline for meeting its target.
