Coach operators have expressed concern that the introduction of VAT on private school fees will impact negatively on the amount of available work.
Routeone has heard of operators’ fears as the Independent Schools Council (ISC) said that budget cuts likely to be made due to the change on 1 January 2025 could lead to a reduction in school trips arranged. One anonymous operator believes that, in anticipation of the controversial move, independent schools began cutting costs at the start of the academic year.
A spokesperson for ISC tells routeone: “All independent schools are looking at costs as they navigate the implications of VAT being placed on parents’ fees. Independent schools operate on very thin margins, less than 10% of income — many on a lot less. This means finding internal savings, some of which may be in a reduction in the number of educational school trips undertaken in the school year.”
Mark Watts, owner of Watts Way Travel, which carries out a lot of work for schools, predicts “less money washing around” for private institutions and believes “they will spend less and focus more on the core trips”. He adds: “I do see that transport costs are going to get scrutinised more and more, so they are going to be looking for lower prices.”
Meanwhile, two opposition MPs cited the impact on the coach and bus sector when attacking the plan in parliament on 8 October. Mims Davies, MP for East Grinstead and Uckfield, says it would be “devastating for bus drivers”.
Aside from trips, a wider downturn in independent school-linked coach operations is being seen already by Lanarkshire-based MacPhails Coaches. Its Director, Martin MacPhail, says: “Absolutely, the VAT on private schools and the threat of ii have indeed impacted the level of business available to coach operators.
“We work for a number of the schools based in Glasgow and, while some have remained steady in capacity, others have already seen reduced pupil subscription.
“Private schools also have a home-to-school system in place which, with an eroding population, results in less journeys. In the last 12 months, the footfall on those is down by around 22% and, while it has only resulted in the cancellation of two services, the precedent is potentially set.
“I would expect further cancellations as some services are down to single digits. There has been a slightly larger increase in the downturn in available work between home to school. We estimate from our year-on-year income strings approximately 30% less school business from the private sector.”
