When is a public sector organisation, not a public sector organisation…

I’m incredibly proud that City College Norwich can trace our history back over 130 years to 1891 and indeed through our work at Paston College back to 1604.? Throughout that time, the College has been totally committed to serving the community in Norwich and Norfolk, teaching literally hundreds of thousands of students and apprentices.? However, our role as a formal part of the public sector has been complicated by Government accounting rules as I hope to explain, and these things matter.

On 29th November 2022, overnight, City College Norwich and all the other colleges in England returned to be formally part of the public sector after the Office for National Statistics said that was where we belonged.? For many of us, it was where we always felt we had been, providing education to students of all ages as a public service.? But overnight it created an opportunity for the Government to address one of the great injustices, the application of VAT to college expenditure.

Now, you might rightly suggest this is a pretty dry subject for a blog but let me illustrate the implications of this for you so you can appreciate it. Between City College Norwich , Paston College and Easton College we strive hard every year to provide our students and staff with the best possible equipment, materials and facilities that we can.? Teaching agriculture, engineering, construction, hospitality and all the other technical courses we offer, is not exactly cheap and it takes much more that a few classrooms to deliver an industry standard education. In providing these essential components of our learning offer in 2022/23 academic year we paid HM Treasury around ￡1.5m in VAT.?? That’s around ￡167 for every student and apprentice that we have studying with us.? However, other parts of the education system who are funded in exactly the same way as college’s do not pay any VAT, meaning that there is far from a “level playing field”.? For example, if we want to buy new 20 PCs (each costing ￡1000 ex VAT each) for a classroom and have a budget of ￡20k, we can buy 16.? The school sixth form down the road (or perhaps even more surprisingly the Independent School around the corner) can buy 20 of those PCs for ￡20k.

This VAT inequity has had very tangible long term impacts on Colleges.? For example the pay rates of college staff have fallen behind the schools sector so that Department for Education’s own figures note that the median pay of a college lecturer is now 22% (or ￡9k) less than a school teacher.? This is putting huge pressure on our ability to recruit and retain staff and reward them properly for the great work they do.

So as we approach a budget that is apparently likely to be “tax cutting”, I’d like to propose that VAT on colleges is one tax that could be cut with the benefits felt in the investment released into colleges up and down the country who work so hard to deliver the skills our students, apprentices and employer partners need.

And next week is the national Association of Colleges Colleges Week, celebrating all the great work my colleagues do to support students and apprentices up and down the country, so please do support us by showing your support and sharing our messages. #LoveOurColleges

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