VAT on private school fees has not caused pupil exodus, says Bridget Phillipson

Adding VAT to private school fees has failed to trigger an exodus of pupils into the state sector despite widespread speculation that it would, the education secretary, Bridget Phillipson, has said.The Labour government applied 20% VAT to private school fees from the start of 2025. They had previously been exempt from the tax. Newly published admissions data for England showed there had been no influx towards state schools since then.“The predicted exodus from private schools simply hasn’t happened and today’s data proves it,” Phillipson said.“Critics warned state schools would be swamped with new pupils. They were wrong. They said private schools would close en masse. They haven’t.“We are rebalancing the system to focus on the 94% of kids in state schools, a majority that has been sidelined for too long.”The admissions data is the first since VAT was added, taken from applications to state schools made in October last year for places in the school year starting next September.The former chancellor Jeremy Hunt was among those who predicted that up to 90,000 children could enter the state sector after the addition of VAT. But the figures from the Department for Education (DfE) actually showed a decline in overall applications for both primary and secondary school places this year, while nearly 85% of families received their first choice of secondary school place, higher than in 2025 and 2024.Local authorities in central London with some of the highest proportions of privately educated children showed no signs of a rise in applications. Hammersmith and Fulham and Kensington and Chelsea both received fewer applications for places in September compared with the two previous years. But there was a slight increase in Islington, where the share of families getting their first preference of secondary school dropped from 68% to 66%.The DfE said that 94% of secondary applicants and 98% of primary applicants in London received an offer from one of their six preferred schools and noted: “That is not a system under pressure.”In Surrey, which was singled out as a likely hotspot for private school defections, there were fewer applications for secondary places this year, while in Kent there was an increase of 2%.However experts cautioned that the falling birthrate and post-Brexit population shifts may partly mask any impact of the VAT increase. The DfE’s 2026 school survey found that while the number of children in schools of all types fell by 1.2%, the numbers at independent schools were down by 3.8%, a drop of 22,000 compared with 2025.The Independent Schools Council said that its members have lost 30,000 pupils since the introduction of VAT, although the group’s membership includes schools in Scotland, Wales and Northern Ireland, while the DfE’s figures are for England alone and include hundreds of private schools that are not ISC members.The census recorded a continuing increase in the number of private schools operating in England, noted by Phillipson. The DfE census showed an increase of 41 private schools in 2026, but the figure was boosted by 88 more independent special schools opening, offsetting the 47 mainstream schools that closed.The DfE said that VAT on private school fees was raising more than had been initially forecast, and is now likely to bring in £1.8bn annually by 2029-30.The addition of VAT was a Labour manifesto pledge during the 2024 general election, and the money raised was to be put toward hiring an additional 6,500 teachers by the end of this parliament. The National Audit Office recently cast doubt on the DfE’s ability to meet the pledge, which is aimed at recruiting more secondary, special needs and further education teachers.