Private school fees now attract 20% VAT, but the exodus of pupils into the state sector that many predicted has failed to materialise, according to newly published admissions data from the Department for Education (DfE). Education Secretary Bridget Phillipson said the figures proved “the predicted exodus simply hasn’t happened” and dismissed warnings that state schools would be “swamped” as wrong. “We are rebalancing the system to focus on the 94% of kids in state schools,” she added.
The data, drawn from applications made in October 2025 for places starting the following September, shows no influx towards state schools. Overall applications for both primary and secondary places declined, while nearly 85% of families received their first choice of secondary school – a higher proportion than in either 2025 or 2024. Local authorities in central London with large numbers of privately educated children reported fewer applications. Hammersmith and Fulham and Kensington and Chelsea both saw a drop; Islington recorded a slight increase, though the share of families securing their first preference there fell from 68% to 66%. In London as a whole, the DfE said 94% of secondary applicants and 98% of primary applicants received an offer from one of their six preferred schools, noting: “That is not a system under pressure.”
Surrey, singled out by some commentators as a likely hotspot for defections, recorded fewer secondary applications, while Kent saw a 2% increase. Primary applications fell by 1.6% from 2025, with a corresponding 1.4% reduction in available places; secondary applications dropped 1.3%, with a marginal 0.2% decrease in places. The proportion of primary applicants getting their first choice slipped slightly from 92.6% to 92.4%, while the secondary first-choice rate edged up from 83.5% to 83.6%.
Jon Andrews
However, experts cautioned that these headline figures may partly mask the impact of the VAT change because of two powerful demographic forces: falling birth rates and post-Brexit population shifts. The Nuffield Foundation reports that fertility in England has declined to around 1.4, well below the replacement rate of 2.1, and primary pupil numbers have already fallen by 85,000 since 2019, with a further drop of 205,000 forecast by 2028. The DfE’s 2026 school census confirmed that the overall number of children in schools of all types fell by 1.2% last year – but the decline at independent schools was steeper, at 3.8%, equivalent to a fall of 22,000 pupils compared with 2025. The Independent Schools Council (ISC) says its members across the UK have lost 30,000 pupils since VAT was introduced, representing a 2.0% fall in numbers, the first drop since 2021. New student admissions were down 5.2% year on year to 102,544. Two-thirds of ISC schools reduced their base fees in January 2025 to avoid passing on the full 20% increase, and the proportion of pupils receiving fee assistance rose to 34.5%, an increase of 11.4%.
School closures have also accelerated. Reports indicate more than 100 private schools have announced closure since VAT took effect. In England and Wales during 2025, 51 mainstream independent schools and 14 special schools closed; the average capacity of those that shut was 201 pupils, significantly higher than the historical average. The DfE’s census recorded a net increase of 41 private schools in England in 2026, but this was driven by 88 new independent special schools opening, which offset the closure of 47 mainstream schools. A study cited by the International Accounting Bulletin warned that the measure could lead to between 10% and 20% of private schools closing within three years.
The Institute for Fiscal Studies had initially estimated that VAT could generate up to £1.6 billion a year and lead to a 3–7% reduction in private school attendance, while also noting that any lost VAT revenue from fee-free places might be offset by higher VAT receipts on other spending. The Local Government Association surveyed councils and found that over three-quarters (78%) had seen no increase in applications to state secondaries; among those that did see a rise, only a third attributed it to VAT, with financial pressures cited as the top reason for families moving from fee-paying to state schools. Research by Zeus Press suggested the policy could drive a 20% average tuition increase and prompt 53% of middle-income families to switch, potentially disrupting what it termed “cultural capital inheritance”.
Revenue and teacher recruitment
The DfE now expects VAT on private school fees to raise £1.8 billion annually by 2029-30, more than originally forecast. The Office for Budget Responsibility has revised its projection upward by an extra £40 million per year, partly because higher projected average earnings feed into fee growth. The policy was a Labour manifesto pledge for the 2024 general election, with the money earmarked to hire 6,500 additional teachers by the end of this parliament. But the National Audit Office has warned that meeting that pledge will be a “significant challenge” and may fall short of demand, particularly in further education colleges, which alone could need between 8,400 and 12,400 more teachers by 2028-29. The DfE has missed its target for secondary teacher training in all but one of the past ten years, and the number of newly qualified teachers starting in state secondary schools in 2023-24 fell to 8,700, the lowest since 2010-11. Former chancellor Jeremy Hunt was among those who had predicted that up to 90,000 children could move to state schools – a figure that drew on a 2018 ISC report – but the admissions data shows that scenario has not materialised.
