The VAT on private school fees has not caused an exodus to the state sector, contrary to predictions, according to Education Secretary Bridget Phillipson. This revelation comes as a surprise to many, including former Chancellor Jeremy Hunt, who forecast a significant shift in pupil numbers. The Labour government's decision to introduce a 20% VAT on private school fees from 2025 aimed to address the perceived imbalance in the education system, favoring the state sector. However, the latest admissions data reveals a different story.
The data, covering applications made in October for the 2026-2027 school year, indicates no substantial influx of pupils into state schools. Critics had anticipated a mass migration from private to state institutions, but the figures tell a different tale. Local authorities in central London, known for their high proportions of privately educated children, showed no significant increase in applications. Hammersmith and Fulham and Kensington and Chelsea, for instance, received fewer applications this year compared to the previous two years.
Islington, however, experienced a slight dip in first preference secondary school applications, with only 66% of families securing their top choice. The Department for Education (DfE) reported that 94% of secondary applicants and 98% of primary applicants in London received an offer from one of their preferred schools, indicating a system that is not under strain. Surrey, initially predicted as a hotspot for private school defections, also saw a decline in secondary school applications.
In contrast, Kent witnessed an increase of 2% in applications. The DfE's 2026 school survey revealed a 1.2% decrease in the overall number of children in schools, with a more significant 3.8% drop in independent schools, equating to a loss of 22,000 pupils. The Independent Schools Council (ISC) reported a loss of 30,000 pupils, though this figure includes schools outside England. The census data also showed an increase in the number of private schools operating in England, with 41 new schools opening in 2026, partially offset by the closure of 47 mainstream schools.
The DfE's revenue projections from VAT on private school fees have been revised upwards, now expected to generate £1.8 billion annually by 2029-2030. This additional funding was intended to support the recruitment of 6,500 teachers, with a focus on secondary, special needs, and further education teachers. However, the National Audit Office has cast doubt on the DfE's ability to meet this pledge, highlighting the challenges in the education sector.
The absence of a predicted exodus raises questions about the effectiveness of the VAT strategy. While the state sector may have avoided a surge in pupil numbers, the long-term impact on the education landscape remains uncertain. The falling birthrate and post-Brexit population shifts could be contributing factors, making it difficult to isolate the VAT's influence. As the debate continues, the education sector must navigate these complexities to ensure a balanced and equitable system for all students.
