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Most of England has not experienced an exodus of private school pupils to the state sector after VAT was imposed on fees although parts of the Home Counties have felt some big shifts, government data shows.
In the 2024-25 academic year, a rising number of pupils at state schools corresponding with a falling number in private enrolment was found in fewer than one in seven local authorities because falling birth rates seem to have produced a bigger impact than tax rises.
A year on from Labour’s decision to impose 20 per cent VAT on school fees, independent schools say they are “adapting to this new era” because the overall number of schools continues to rise while the majority cut fees as the tax came in to cushion rises for parents.
However, they point out that even a modest fall in numbers has meant thousands of pupils changing school with more families saying they will pull out their children after significant exams.
Prime Minister Sir Keir Starmer’s government is expecting to raise £1.5bn this financial year from the decision to introduce VAT on school fees in January 2025, a promise made in its manifesto.
Private schools and opposition parties campaigned against the tax, warning that tens of thousands of pupils would leave the independent sector and risk swamping the state sector.
Initial figures earlier this year showed a fall of just under 2 per cent in private pupil numbers in 2024-25 compared with the year before, a drop of about 11,000, while state pupil numbers were down just under 1 per cent.
Now analysis by the Financial Times for the 2024-25 academic year shows the fall in private numbers has been concentrated among primary-age children, with a 3.4 per cent fall in the independent sector, compared with a 1.4 per cent fall in the state sector.
Birth rates have been falling since 2012, while some analysts say parents are foregoing private primary education to concentrate on secondary school.
Among secondary school-age pupils over 12, private numbers are down only 0.4 per cent, or 1,321 children, compared with a 0.7 per cent increase in the state sector.
The biggest impact overall appears concentrated in a handful of areas, predominantly in and around London, where private school pupil numbers have fallen substantially. In Surrey and Hertfordshire numbers are down by about 800, with both also seeing state numbers down about half this amount. Areas such as Westminster, Ealing, Lancashire, Hampshire, Kent and Oxfordshire have also lost hundreds of private pupils, but at only the last two have state numbers risen.
Overall, both private and state numbers have fallen in half of areas, while state numbers have risen in 13 per cent as private numbers fell. In just 9 per cent of local authorities have state numbers risen by as much or more as private numbers have fallen. In contrast, private numbers have actually risen in a third of the country.
Julie Robinson, head of the Independent Schools Council, said numbers leaving the private sector would increase, pointing to bigger falls of about 5 per cent in the first years of primary and secondary school. “We know this from the previous economic crash, that parents do all they possibly can to get their children through to the next transition point, so that’s why it takes a few years to work through the system,” she said.
She argued the policy was “creating more competition for great state schools” while driving independent schools “towards more wealthy clientele”. She added, however, that means-tested bursaries were up 11 per cent this year as private schools offered help to struggling parents.
Robinson said 57 mainstream private schools had closed this year, up from an average of 42 in previous years, with an increase in special schools, while others had cut staff or merged.
However, she acknowledged that VAT was “not going to decimate the sector”, saying independent schools had “a really good, positive, confident future”.
“Certainly, it has caused some damage, and that’s patchy and in some local areas worse than others. And at the same time, the sector is definitely adapting to this new era,” she said.
Sam Freedman, a former government education policy adviser, said private schools had “put up prices well beyond inflation” for years. “Now they are taking a bit of a financial hit to manage the imposition of VAT, very few have passed on the full cost to parents. The schools that have closed since it was introduced were all losing money before VAT came in,” he added.
In November the Office for Budget Responsibility stuck to its estimate that ultimately 35,000 pupils would leave the independent sector as a result of fees.
However, it revised revenue from the measure upward by £40mn a year, saying higher earnings would enable more parents to go private.
The government said in a statement: “This manufactured crisis of pupils leaving the private sector and putting pressure on the state system has failed to materialise.
“Our data shows pupil numbers remain firmly within historical patterns seen for over the last 20 years, and the rate of children getting a place at one of their preferred primary schools is the second highest on record.”