Tag Archives: taxation

Taxing our schools

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What started out as a ‘good idea’ has now become a tax on schools, and especially primary schools: at least in Oxfordshire. The apprenticeship Levy doesn’t seem to work as intended, as the following information provided by the Council to a Lib Dem question clearly shows.

The Apprenticeship Levy started in May 2017.

The levy is funded via a monthly charge against our payroll bill of 0.5%. This equates to approximately £100k a month. The money charged to our payroll is put into an OCC digital apprenticeship account and is drawn down by apprenticeship training providers on a monthly basis. For example, if 1 apprenticeship costs £4,800 and has a duration of 2 years, the provider will draw down £200 a month for 24 months.

Each month’s levy is treated as a separate pot of money with the oldest pot of funding being used first.   The first allocation of £100k (May 2017) was used to pay providers until it was exhausted. For example, if our total training bill was £10k a month, it would take 10 months to use the first month’s levy. In the meantime, we would have accrued a further £900k over the following months which would not have been spent as there was sufficient in the first month’s pot to cover the costs. Once the first month’s levy was spent, future expenditure was taken from month 2 until this was exhausted and so on.

Since May 2017, Oxfordshire has accrued a total of £4,047,490 to spend on apprenticeships.

However, Oxfordshire can only keep the accrued levy for 24 months. So, we had until May 2019 to spend May 2017 allocation, June 2019 to spend June 2017 allocation etc.

Any money remaining in a pot that is more than 2 years’ old is returned to the treasury (i.e.The Government at Westminster – my addition). This means that any funding added to our levy pot before October 2018 and not spent was returned.

Our first repayment was September 2019. To date £611,788 has expired and has been repaid to The Treasury. This equates to approximately 37% of the levy we accrued between May 2017 and October 2018.

Levy accrued between November 2018 and October 2020 has not yet reached an expiry date so we have approx. £2,326,543 available to spend.

Spend on apprenticeships is increasing every year which indicates that the level of levy we will need to repay should reduce over the coming months and years.

Levy Spend per calendar year was:

 2017£18,225.54
2018£144,403.85
2019£435,201.48
Jan – Sept2020£511,227.38

It is anticipated that 2020 final spend will be approx. £700k as we have recently started a number of degree level apprenticeships that will draw down large monthly amounts.

For information, school contribution and spend for 2019 is:

  • Contribution to the levy: £405,596
  • Spend: £232,858

The county team continues to promote apprenticeships (both employed and CPD) where ever possible throughout the organisation whilst recognising further work needs to be done.

If this lack of spending the cash raised by the levy from schools, and MATs have the same problem, is common across the country then it is time to seek reform.

We need more apprenticeships, so making use of the cash to train teachers would be one possible change. Creating two non-teaching posts with substantial training elements might be another low cost approach that might also help reduce unemployment if linked to other programmes.

Whatever approach is taken, schools should not see any of their hard fought for cash being returned unspent to government. Just as they should not now be wasting cash on expensive recruitment advertising.

To ask for more funds must run alongside making the best use of the cash already in the system.

Action for local government: Apprenticeship funding needs radical change. If the Government increased Levy flexibilities, including allowing public pooling of funds, Treasury pausing its expiry policy, and devolving non-levy funding, local government could support local businesses in a much more targeted and coherent way, including by allowing them to target sectors, address local supply / demand side issues, widen participation to disadvantaged groups and specific cohorts. A proportion could be spent on pre-apprenticeship training / administration of programmes. This could support the development of the Opportunity Guarantee. Alongside these measures, we call for a levy payment holiday (up to 6 months) for businesses struggling with cashflow problems and allow employers to collaborate on transferring / pooling. DfE should also pause the switch-off of frameworks until March 2021.

How rich are teachers?

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With the details of the 2016 School Workforce Survey still awaited, we have to turn to data on salaries from the 2015 Survey, effectively reflecting pay during the 2014-15 school-year. Using the published data from the DfE, it looks as if some 8,700 of the 484,000 teachers, where the State pays their salary and the figure was disclosed, earned more than £70,000 at the reporting point. This is the figure that makes you rich if Labour is to be believed. In total that represents just 2% of the teacher workforce. However, we cannot know how many of the 22,900 with unknown salaries, earn more than £70,000. But, since over half of those where the salary was unknown were younger than 30, they are unlikely to be amongst the highest paid teachers.

By contrast to the top 2%, some two thirds of employed teachers earned less than £40,000 at the census date in 2015. They are unlikely to have seen much of a pay rise since then. The top 2% earning more than £70,000 include teachers working in London, as the summary data takes no account of the extra salary paid to teachers working in the capital; presumably because of higher costs, especially housing. It was interesting that Labour when making the announcement about taxation didn’t have anything to say about workers in London. Presumably Labour believes you are still rich in London if you earn £70,000?

Of course, pay is a crude measure of rewards, as Labour found with its pay policies in the 1970s. Too draconian an anti-high pay regime and employers turn to non-monetary benefits. The cult of the company car owes a lot to pay policies in the 1970s, a period when teachers’ non-monetary benefits came to be seriously eroded compared with those of other workers.

Public sector pay, including that for teachers, may well become an issue in the general election campaign once everyone has decided where they stand on Europe and the Tories hard BREXIT stance. I suspect many voters already know how that issue will influence their voting, especially where there are local elections and it has already been discussed on the doorsteps, as it has in my part of Oxford. Voters will want something else to talk about over the next seven weeks.

The issue is whether the many young teachers, increasingly saddled with big student loan debts and trying to build their lives, feel well off? I suspect most don’t, especially in high cost areas outside of London, of which Oxford is one. How much of the increase in jobs for teachers is due to large numbers quitting the profession: we don’t know, but with other opportunities on offer why wouldn’t you, especially if workload and low morale are affecting how you see your job.

Perhaps the political party offering most on improving workload, CPD and morale might win the teachers’ vote this time around. Here’s what the 2015 Lib Dem offer was in 2015:

Guarantee all teachers in state-funded schools will be fully qualified or working towards Qualified Teacher Status (QTS) from September 2016

  • Introduce a clear and properly funded entitlement to professional development for all teachers
  • Raise the bar for entry to the profession, requiring a B grade minimum in GCSE maths and English
  • Establish a new profession-led Royal College of Teachers, eventually to oversee QTS and professional development.
  • Continue to support the Teach First programme
  • Establish a new National Leadership Institute

So certainly room for more this time around, especially on workload pressure; retaining teachers in the classroom and making everyone working in education feel properly valued as a public servant.

Readers are reminded that for the past four years I have been the Lib Dem spokesperson on education on Oxfordshire County Council.

 

Don’t tax renewables

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There is a device in the House of Commons called an Early Day Motion whereby  MPs can express a view on a particular topic relating to any subject you can think of and probably a few that wouldn’t ever have occurred to you, such as Carnwath Primary School’s lottery grant and local newspapers in South London. However, some EDMs are important and deserve to garner support from a large number of our elected representatives in order to show the strength of feeling on a topic.

One such that has all-party support is EDM 491 on business rates and solar power. The gist of the EDM is that the supporters of the EDM;

expresses deep concern at the changes to the rateable value of rooftop photovoltaic solar panels being proposed by the Valuation Office Agency, which may result in a six to eight-fold increase in the business rate charges to businesses, community groups and schools for the use of their own rooftop solar across the UK; notes the popularity, importance and affordability of solar power; and calls on the Department for Business, Energy and Industrial Strategy, the Department for Communities and Local Government and HM Treasury to take action to prevent unexpected and extreme business rate rises for solar… 

It does seem odd that schools trying to keep down costs and perhaps generate a small amount of feed-in tariff should have to contemplate turning off their PV panels because it might cost them more to operate them than to either turn them off or even remove them.

According to a video from Caroline Lucas, the Green Party MP, the situation is even more ludicrous as she states in the video that private schools would not pay the additional tax – presumably where they are charities? If this is the case, then why not exempt all non-income generating public buildings such as schools from any change to business rates. However, I would go further and support the ban on any form of tax on renewables anywhere as counterproductive to their essential purpose to help reduce greenhouses gases and the use of Carbon Dioxide.

If you agree, please email you local MP and ask them to either sign the EDM or explain why they think it is a good idea to tax renewable energy sources in schools? You might ask your professional association what stance they take on the EDM.

I am also interested in the use of asphalt covered playgrounds as a source of ground source heat generation. After all, these open spaces are probably left uncovered for 99% of the year. Providing a low cost form of installation can be devised playgrounds should offer a good potential source of low-level heat generation. Perhaps a university School of Education could team up with one of the science departments in the university to devise a viable scheme that could be installed over a summer holiday period?