VAT (Colleges)

Oral Answers to Questions — Treasury – in the House of Commons at 11:30 am on 29 January 2013.

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Photo of Julian Huppert Julian Huppert Liberal Democrat, Cambridge 11:30, 29 January 2013

How much VAT was paid by (a) sixth-form colleges and (b) further education colleges in 2012.

Photo of Danny Alexander Danny Alexander The Chief Secretary to the Treasury

Her Majesty’s Revenue and Customs does not collect data on the VAT paid on individual goods or services at a sufficient level of detail to indentify the amount paid by sixth-form colleges and further education colleges. VAT costs, like all other costs, are taken into account as part of the up-front funding allocation.

Photo of Julian Huppert Julian Huppert Liberal Democrat, Cambridge

Sixth forms and further education colleges such as Hills Road and Long Road sixth-form colleges and Cambridge Regional college do excellent work. However, they face a large VAT burden—some £300,000 for sixth-form colleges and well over £1 million for Cambridge Regional college—that schools do not face, as well as receiving less funding than the school sector. Will my right hon. Friend agree to investigate whether that anomaly can be corrected, so that sixth-form colleges and FE colleges can have a level playing field?

Photo of Danny Alexander Danny Alexander The Chief Secretary to the Treasury

As my hon. Friend will know, when we took office we found a situation in which sixth-form colleges were considerably less well funded for that group of pupils than schools. We are taking steps, year by year, to equalise the funding arrangements, and we will look again at that in the spending round in the first half of this year.

Photo of Kelvin Hopkins Kelvin Hopkins Labour, Luton North

As a governor of Luton sixth-form college for 20 years and a former teacher of A-levels, I am convinced that sixth-form colleges are the most successful institutions in our education system. Is it not time for the Government to stop punishing them for their success?

Photo of Danny Alexander Danny Alexander The Chief Secretary to the Treasury

I dare say that the hon. Gentleman’s comments on sixth-form colleges will be echoed by many Members of the House. That is why, as I said in answer to the earlier question, the Government are taking steps year by year to equalise the funding arrangements. I am sure he will welcome that.