Friday, 25 January 2013

Cambridge MP Takes Colleges’ Fight Against Vat To Treasury


Cambridge MP Julian Huppert is taking his fight for a fairer deal for the city’s sixth form  and further education colleges to the Treasury  on Tuesday (January 29).

He will put pressure on the government to end the unfair rule which means the colleges have to pay VAT on goods and services which sixth forms attached to schools are exempt from paying.

The regulations leave Cambridge’s Hills Road and Long Road Sixth Form Colleges and Cambridge Regional College paying hundreds of thousands of pounds in VAT even though they are funded in the same way as school sixth forms for their 16 to 18-year-old pupils

Julian will raise the issue in a House of Commons in a question to the Treasury Minister asking how much VAT was paid by sixth form colleges and further education colleges in 2012.

He said: “It is completely unfair that even though these colleges are funded in the same way as sixth forms attached to schools and are teaching the same age children, they are treated differently under the VAT rules. This leaves them hundreds of thousands of pounds out of pocket on VAT charges, money which could be spent to the benefit of their pupils.

“I cannot see any justification for this double standard and I will continue to fight this issue until the Treasury changes this unfair policy.”

Julian’s actions have been praised by the principals of the city’s colleges who have welcomed the stand he is taking on behalf of their pupils.

Anne Constantine, Principal of Cambridge Regional College, said: "Cambridge Regional College paid well over £1m in VAT on goods and services last year, most of which was associated with teaching our younger students. A school with a sixth-form would not have had to pay this VAT even though we are funded by the same funding agency for our 16-18s.

“It is a complete anomaly that FE colleges and sixth form colleges are treated differently from schools and we are delighted that Julian Huppert has taken up the case with vigour and achieved a question in the House next week.  The thousands of students at Cambridge Regional College, Hills Road and Long Road Sixth Form Colleges will benefit from a reversal of this unjust policy."

Linda Sinclair, Principal of Hill’s Road Sixth Form College said: “This is an extremely important and urgent issue for sixth form colleges and we are very grateful to Dr Huppert for raising it with the Treasury Minister.

“Sixth form colleges are currently facing a number of funding inequalities, one of which relates to VAT.  Unlike schools and academies, colleges are not reimbursed for their VAT payments. This typically costs Hills Road around £300,000 per year; a sum of money which, if reimbursed, would make a huge difference to us and would help mitigate some of the damaging impact of on-going funding cuts.

“It is manifestly unfair to treat sixth form colleges less favourably than other state-funded schools and academies and we look forward to hearing the Treasury Minister’s response.”

Chris Sherwin, Principal of Long Road Sixth Form College said: “I, the governors and the staff of Long Road Sixth Form College are very appreciative of the time and attention Julian has given to understanding the challenges sixth form colleges are facing at the moment and how these are impacting on us.

“We are particularly grateful that he is raising a question with the Treasury Minister as to why we have to pay VAT when schools and academies do not.  This costs us in the region of £250,000 per year which would go a long way to helping us to maintain our very much older, but much loved, set of buildings, and more importantly to maintain staffing levels.

“We understand the difficult decisions the government has to make to address the country’s financial predicament, and are willing to take our fair share of the pain – but in these difficult times, it becomes more important than ever that these matters are dealt with fairly.

“Why should schools and academies not have to pay VAT on expenditure relating to their 16-18 year old pupils when we do? It feels particularly ironic in the case of Long Road Sixth Form College because we have agreed, to release land free of charge to be the site of the new University Technical College because we recognise that it is a good thing for young people in Cambridge. That institution will not pay VAT and will have a brand new building in which to operate.”