Bridget Phillipson has stated that the imposition of VAT on private school fees has not led to a mass movement of pupils into the state sector, despite widespread predictions to the contrary. The education secretary pointed to newly released admissions data for England, which shows no significant increase in applications to state schools since the tax was implemented.
VAT Implementation and Initial Reactions
The Labour government introduced a 20% VAT on private school fees at the start of 2025, ending their previous tax-exempt status. Critics, including former chancellor Jeremy Hunt, had forecast that up to 90,000 children would transfer to state schools as a result. However, the Department for Education (DfE) data indicates a decline in overall applications for both primary and secondary school places this year, with nearly 85% of families receiving their first choice of secondary school, an improvement over 2024 and 2025.
Regional Data and Expert Analysis
In central London boroughs with high proportions of privately educated children, such as Hammersmith and Fulham and Kensington and Chelsea, applications for September places actually decreased compared to the previous two years. Islington saw a slight increase, but the share of families obtaining their first preference secondary school fell from 68% to 66%. Surrey, previously identified as a potential hotspot for defections, recorded fewer secondary applications, while Kent experienced a modest 2% rise.
The DfE emphasized that 94% of secondary applicants and 98% of primary applicants in London received an offer from one of their six preferred schools, concluding that the system is not under pressure. However, experts caution that falling birthrates and post-Brexit population shifts may partially obscure the VAT impact. The DfE's 2026 school survey revealed a 1.2% overall decline in school populations, but independent schools saw a sharper 3.8% drop, equating to 22,000 fewer pupils compared to 2025.
Private School Closures and Revenue
The Independent Schools Council reported a loss of 30,000 pupils among its members since VAT introduction, though this includes schools in Scotland, Wales, and Northern Ireland, whereas DfE figures cover England alone. The DfE census noted an increase of 41 private schools in England in 2026, driven by 88 new independent special schools, offsetting the closure of 47 mainstream private schools. Phillipson highlighted this growth, stating that predictions of mass closures have not materialized.
The DfE now estimates that VAT on private school fees will generate £1.8 billion annually by 2029-30, surpassing initial forecasts. The policy, a Labour manifesto pledge, aims to fund the recruitment of 6,500 additional teachers by the end of this parliament. However, the National Audit Office has questioned the DfE's ability to meet this target, particularly for secondary, special needs, and further education teachers.
