The UK Government’s decision to impose VAT on private school fees, effective from 1st January, has reignited debates about equity, education funding, and the long-standing divide between state and independent schools. While the policy promises to direct much-needed resources into state education, experts warn that it could disproportionately affect children with special educational needs and disabilities (SEND), whose access to tailored support may be left unaddressed.
A Tax on Education: The Policy Shift
The introduction of a 20% VAT on private school fees marks a significant policy change. Previously, independent schools benefited from exemptions as providers of education, alongside an 80% reduction in business rates for those with charitable status.
The government’s rationale is clear: to use the revenue – estimated at £460 million in 2024/25, rising to £1.7 billion by 2029/30 – to recruit 6,500 new teachers for state schools in England. Chancellor Rachel Reeves has assured the public that “every single penny” will be reinvested in state education.
While Labour champions this as a progressive move, critics, including the Independent Schools Council (ISC), argue that the policy could destabilise both private and state sectors. The Conservatives have labelled it a “vindictive policy” that risks harming “every single child,” regardless of their school.
The SEND Question: Displacement and Disruption
For SEND pupils, who already face systemic challenges, the removal of VAT exemptions introduces new uncertainties. While some SEND students in private schools benefit from local authority-funded Education, Health, and Care Plans (EHCPs), many families privately fund their children’s education to secure the specialised support these schools can provide.
According to the Lords’ Library, 20% of private school students have special educational needs, yet only 7% hold an EHCP.
Baroness Stephanie Fraser has voiced deep concerns, telling the Local Government Chronicle, that “this decision is quite worrying as the SEND system is paralysed in the first place without adding more complication on top.” With state schools already struggling to meet SEND needs, an influx of pupils from private schools could overwhelm existing resources and further marginalise vulnerable children.
Wider Impacts of the VAT Policy
Potential Benefits
One of the stated aims of this policy is to reduce socio-economic segregation in education. By making private schools less accessible, proponents argue that more families will turn to state schools, fostering a more socially cohesive environment. Local schools may better represent the full spectrum of their communities, helping to break down divisions based on wealth.
Potential Costs
The ISC estimates that around 37,000 pupils will move from private to state schools, though the government’s projections are more conservative. In areas where demand for school places is already high, local authorities may struggle to accommodate the influx, leading to larger class sizes and strained resources. For SEND pupils, who require tailored support, this could translate to longer waits for EHCPs, fewer specialist staff, and reduced individual attention.
The disparity in SEND provision between private and state schools also raises concerns. Private schools often offer smaller class sizes and specialised support, which many state schools, despite their best efforts, are unable to match. The shift could leave SEND pupils at risk of losing the individualised care they need to thrive.
Implications for State Schools
Beyond SEND pupils, the policy raises broader questions about the capacity of state schools to absorb additional students. Labour has pledged to use the additional funds raised by the VAT to recruit more teachers and improve facilities. However, critics argue that these improvements may take years to materialise, while the influx of students could create immediate pressures.
Furthermore, the policy may prompt some families to relocate to areas with high-performing state schools, intensifying competition for limited places in desirable catchment areas. This could exacerbate existing inequalities rather than reduce them.
What Lies Ahead for SEND Pupils?
The government’s pledge to reinvest VAT revenue into hiring more state school teachers is commendable, but questions remain about how these funds will address the specific needs of SEND pupils. Without targeted measures, the risk is that these children – already underserved in many areas – will bear the brunt of the system’s growing pains.
Parents of SEND pupils currently in private schools may face unenviable choices. With fees likely to rise by 10% on average, many could be priced out of independent education. Yet transitioning to the state sector may not guarantee access to the same level of support. For families caught in this limbo, the stakes are alarmingly high.
Final Thought
The VAT on private school fees is a bold policy aimed at fostering greater equity in education, but its impact on SEND pupils remains deeply concerning. As Baroness Fraser noted, the SEND system was already paralysed before this policy came into effect. For these children and their families, the added uncertainty could deepen existing inequities rather than resolve them.
While the government’s commitment to reinvest revenue in state education is a step in the right direction, ensuring that SEND pupils are not left behind demands targeted action – from increasing specialist staff to streamlining the EHCP process. Only then can the education system truly serve all children.
For more of Chamber UK’s analysis on SEND provisions, please click here.
