Independent schools: How to plan and mitigate the financial pressures if a Labour government introduce VAT on school fees.

We’re still under a Conservative government leadership, but with a Labour take over potentially on the cards, we’ve taken a look at how Independent schools can plan in order to mitigate the financial pressures if Labour do come into power and introduce VAT on school fees.

We’ve been providing education facilities management and catering consultancy for Independent Schools for over 30 years. It’s one of the first sectors we started in and we’re very proud of our track record. We understand that each school has its own identity, culture and community. However, when it comes to tackling a potential VAT introduction, there are some actions that all schools can take now to get best value from their catering spend. In fact, these actions should be taken regardless of the political context.

  1. If catering is outsourced, savings are likely to be made either through renegotiation following a best value benchmarking review or by putting your contract out to tender.
  2. Cost-plus contracts should not provide a blank cheque to operators. There are several ways of guaranteeing or capping costs and incentivising the contractor to not overspend (which many contracts perversely encourage), but to meet or exceed the budget without compromising on service standards.
  3. It’s worth looking at internal hospitality spend which is notoriously uncontrolled and food waste is an expensive problem. There are various tech solutions that enable visibility and tracking of spend and waste and can significantly reduce costs, making them well worth the investment.
  4. Taking catering services in-house can be a way to reduce costs, but should only be done following a robust options appraisal. Short-term savings can be quickly eroded without proper management systems, procurement expertise and staff development.
  5. If the catering services are already in-house, then it’s advisable to get an independent review of how efficiently you’re operating against best-in-class. It can be easy to become complacent when the catering is in-house and also to lose sight of innovations within the wider sector, fresh ideas and ensuring the service evolves in line with expectations.


Catering is a central and highly visible part of the pupil experience and, if school fees do increase, providing the best possible food efficiently will play an even more acute role in attracting pupils.

The Litmus Team