The rural community that saved their school after Labour’s VAT raid

When the board of governors of Hunter Hall gathered last week, the mood was grim. Those present knew that the independent prep school was on the cusp of closure and that, without a rapid injection of funds to support a long-term rescue package, the gates would swing shut at the end of term, never to open again.

In recent years, the small school on the edge of Penrith, in the Lake District, has faced a host of financial pressures, but the Government’s addition of VAT to school fees has pushed it to the brink.

Such was the determination to keep this much-loved Cumbrian institution open, however, that the governors decided one final push was worth it and set up a crowdfunder, aiming to raise £180,000 by Wednesday this week.

It might have felt like an extremely distant target but, after an astonishing response from the local community, somewhat incredibly they have made their target with just 24 hours to spare.

“The whole community was refreshing the crowdfunder page constantly,” says head teacher Paul Borrows. “Getting over the line means everything to the parents and staff, and most importantly the children. We are just so grateful.”

When The Telegraph visited the school on Monday, however, the atmosphere was far more tense.

“The idea of having to tell my five-year-old that she won’t be coming back here – a place where she loves to learn and has made so many friends – isn’t just upsetting,” whispered one parent, Tom Blades, as children filed past the school’s breakout area. “It’s completely unjust. Our backs have been against the wall here. This is an incredible place. A special place. But it’s a desperate situation.”

One that has been averted. But it says something about the precarious state of the independent school ecosystem that small, not-for-profit institutions such as Hunter Hall are having to crowdfund to secure their long-term viability. It wasn’t a decision they took lightly but, as Borrows puts it, a very public deadline was necessary if only so staff and parents could have time to look elsewhere for education and jobs.

“We knew the anxiety this would cause,” he admits. “But there was no other option available.” Borrows stares out across the playing fields, which hosted community-wide cross-country events recently. “There’s been a combination of financial pressures, but the introduction of VAT on school fees has been unprecedented.”

With 79 pupils aged three to 11, Hunter Hall is in the midst of a financial headwind that a larger independent school in a more urban area could possibly overcome. It has always operated on a not-for-profit basis and tried to keep fees as affordable as possible for its rural Lakes community, but had no option other than to pass on the full 20 per cent VAT levy Labour imposed in January 2025.

“We’ve never had huge surpluses or reserves to draw on,” says Borrows. “Everything we did was to provide the best possible and most innovative education.”

Hunter Hall’s fees now range from £4,108 to £4,942 a term. “Obviously for parents that’s quite a big hit to take. We did lose families as a direct consequence – and they told us so. For people already stretching to afford fees, the additional cost wasn’t just frustrating, it was the difference between ‘Can we afford this or can we not?’”

Speaking to parents at the end of the school day before the target had been reached, it was certainly not the case here that fee increases simply meant wealthy families had to forgo an extra holiday.

“Look, we know not everyone will have sympathy,” says Sam Bunting, whose daughter, Sibella, is in her crucial final year. “But there are so many parents here who come from working families, who went to state schools themselves. Whatever our backgrounds, everybody has made real sacrifices to send our children somewhere different, somewhere special – somewhere that we think really meets our children’s needs.”

It’s fascinating that there was such overwhelming support for Hunter Hall from the entire Cumbrian community, whether or not they send – or could afford to send – their children here. The crowdfunder page has donations from a local bakery, a garage, a dairy farm, other small businesses, and local families. One parent, Charlie Morison – whose three boys have been or are still at the school – admits to feeling really struck by the comments on the page. “Reading the impact this little school has had on the community is really moving, actually,” she says.

“More than a school – a community, a family. The best years of our lives,” writes one donor. Another calls it “a truly wonderful school, filled with amazing staff who celebrate every child’s gifts and talents”.

Locals seem to understand, too, that it’s not just the VAT imposition that has led Hunter Hall to this point. This year, the school also had to face the removal of charitable business rate relief and changes to National Insurance contributions. The timing of these policy changes made it virtually impossible for the school to navigate quickly enough to avoid crisis, despite negotiating rent reductions and staff voluntarily accepting a 7.5 per cent salary reduction.

“That decision by teachers alone was incredible,” says governor Ben Shamash. “If I told my staff in my business that I was cutting salaries by that much, they’d be off. These incredible teachers here believe in this place so much that they were prepared to make that sacrifice.”

In September, The Telegraph visited Windermere School, which was also being buffeted by the VAT imposition. Back then, its chair of governors, Peter Hogan, bemoaned that the VAT levy lacked nuance and treated all independent schools – no matter their size, location or circumstances – with the same broad brushstroke. It’s a complaint Borrows completely empathises with, given they also don’t have the margins of a big-name school.

“It’s a question of scale,” he agrees. “If you look at the headline figures from the Government, they’re saying they want to put this money into schools. Which is great – I’m obviously all in favour of that. But it’s easy to hide in the big numbers and forget that if this one school closes, then it will cost them about half a million pounds to fund places in the state school sector.”

And if that’s repeated across the country, argues Borrows, then very quickly those headline figures raised for better education will be swallowed up.

“It just seemed unnecessarily cruel,” says Bunting. “We’re a little school in the wilds of the north, so to speak. But we’re also a community asset. Its closure would cost far more than it saved.”

“There wasn’t a fairness here,” adds Blades. “You’re messing with children’s lives and teachers’ jobs in the end.”

All of these legitimate concerns might be why Hunter Hall  closed in on its £180,000 target. But it was also because these parents, more than anyone, knew what was at stake here. 

Hunter Hall uses its independence to be imaginative and innovative in its curriculum and learning environments; earlier this year the school introduced engineering, with projects such as bridge-building designed to mimic how real-world collaboration works.

So, despite this influx of donations, governors like Shamash know that raising £180,000 needs to be more than just plugging an immediate funding hole. The school has modelled a financially viable future based on just 70 pupils from 2026 onwards, with the potential for growth if they can rebuild confidence in the sector. It will now be ratified at a governors’ meeting on Wednesday.

“Obviously anyone donating, and any prospective parent, wants to know that we’re not going to be in the same situation in a year’s time,” says Borrows. 

But confidence in the school itself has never wavered. “I showed a family around the day before the news broke,” says Borrows. “They saw the crowdfunding story the next morning and still rang to say, ‘We want our son to start next September.’ That meant a lot.”

This young boy will now get that chance.

“I just truly believe that the educational landscape is so much richer if you have more schools in it – schools that can have some freedom and offer choice to parents,” says Burrows. “And it’s those parents who have shared the story of this school and have been so crucial in getting us this far.”

And they’ve done it not because they can afford to, but because they believe in what Hunter Hall stands for. “Hunter Hall is more than a school to us,” says Morison. “It’s a very special community that has nurtured our boys for the past nine years. I did actually ask my youngest how he’d feel if these were his last days here, and he said he’d be devastated and heartbroken.

“We shouldn’t be making children suffer in this way, but we are thankful for all the support.”

Still, the Department for Education remains unrepentant. “The OBR’s Budget report shows that ending tax breaks for private schools will raise £40 million a year more than initially expected to help fund public services, including supporting the 94 per cent of children in state schools to achieve and thrive,” says a spokesperson. 

[Source: Daily Telegraph]