Private school pupil numbers plummet after Labour's VAT raid

Telegraph

2 days ago

Private school pupil numbers have fallen by more than 11,000 in England following Labour's VAT raid on fees.
There were around 582,500 pupils at English private schools in January, down from 593,500 at the same point last year, according to Department for Education (DfE) data published on Thursday.
It marks a 1.9 per cent decrease compared to last year, or around one in fifty pupils – the biggest year-on-year drop in more than a decade.
The figures are likely to show an initial exodus from the private school sector by January, when the Government's 20 per cent VAT raid on fees came into force.
It far eclipses the Government's prediction that the policy would drive out 3,000 private school pupils across the UK this year, rising to a cumulative 14,000 next year.
The DfE figures revealing the drop only capture schoolchildren in England, whereas the VAT policy applies to schools across the UK.
Separate census data, published last month by the Independent Schools Council (ISC), which represents private schools across the devolved nations, claimed pupil numbers plummeted by around 13,000 in the year to January.
A Government spokesman claimed the decline 'reflects the broader demographic trends and changes in the state sector' and proved that warnings about a potential exodus were 'manufactured'.
But the Government's own figures show the 1.9 per cent plunge is the largest annual decline since at least 2010 – the earliest comparable data published by the DfE. The second-largest drop over that period was in January 2021, when the private school headcount fell by 1.3 per cent – or around 7,500 pupils.
Slowing birth rate
The decrease is also far higher than across the overall schools sector, which saw pupil numbers shrink by 0.7 per cent this year, in part because of a slowing birth rate. It includes a 1.3 per cent drop in pupil numbers at state primary schools.
The number of pupils in state secondary schools remained broadly unchanged compared to last year, while the proportion of those in state-funded special education rose 5.3 per cent.
Julie Robinson, chief executive of the ISC, said: 'These new Department for Education statistics show that the drop in independent school numbers cannot be explained by the fall in overall pupil numbers.
'The Government's own figures now show that, in England alone, 8,000 more students have left independent education than politicians had estimated. This outsized exodus should concern anyone who is interested in this tax on education as a revenue raiser.'
Many of the biggest falls in pupil numbers occurred in poorer areas, including a 26 per cent drop in St Helens, Merseyside, a 13 per cent decline in Brent, north-west London, and a fall of 11 per cent in Barking and Dagenham, east London.
Traditional independent schools – which excludes hundreds of independent special schools, alternative provision and religious schools – were more likely to be impacted by a drop in pupil numbers this year.
Across the 1,218 traditional schools analysed by The Telegraph, numbers fell from around 485,500 to 472,650 - a fall of 12,850, or a 2.7 per cent drop.
In other private schools, pupil numbers actually increased by around 3 per cent, with the most elite schools largely untouched. Eton College saw its pupil body increase by five to hit 1,346 in January, while Winchester College made room for eight extra places. Charterhouse's pupil body rose by five per cent.
Mike Stimpson, a partner at wealth manager Saltus, said the overall drop of 1.9 per cent private school pupils was likely to 'just be the beginning', with more families expected to reconsider their education options over the summer.
'The academic year starting this September will be the first full school year under the new VAT regime, and our research suggests we are likely to see further declines in private school enrolments as the financial impact of this policy becomes even more real for families,' he said.
Earlier this year, the ISC accused ministers of having 'underestimated' the impact of the VAT policy, which the Government hopes will raise £1.8 billion a year by the end of the decade.
Average private school fees soared by 22.6 per cent this year, according to the ISC's latest annual census, compared to an 8.4 per cent rise in 2024 and a 6.4 per cent increase in 2023.
It comes despite a Treasury impact assessment published last October saying that 'on average, the Government expects private school fees to go up by around 10 per cent as a result of the introduction of VAT'.
High Court documents obtained by The Telegraph earlier this year also revealed that Rachel Reeves, the Chancellor, was warned Labour's levy on fees could cause an additional 100 private schools to shut over the next three years – something the Government had never admitted in public.
Court documents shared with The Telegraph also revealed that Labour deliberately chose the 'most disruptive' start date for the VAT raid on private schools after being presented with a range of options.
Ministers toyed with a later start date for the tax but ultimately decided to go with the course of action labelled by civil servants as 'the most disruptive' in order to 'maximise revenue'.
The Government is currently embroiled in a High Court battle over its VAT policy after parent groups argued the tax raid is discriminatory. Claimants are seeking a 'declaration of incompatibility' under human rights laws. Although this would not overturn the VAT policy in itself, it could force the Government to take a second look at the tax raid or hand out exemptions.
The judicial review was heard in April by three High Court judges, who are expected to issue a single written judgement in the next few weeks.
The Government spokesman said: 'Today's figures shatter the myth that charging VAT on private education would trigger an exodus. The data reveals pupil numbers remain firmly within historical patterns seen for over 20 years.
'The 1.9 per cent decline in private school pupil numbers reflects the broader demographic trends and changes in the state sector, with almost no change in secondaries and a 1.3 per cent reduction in state-funded primary school pupil numbers.
'This manufactured crisis has failed to materialise. Ending tax breaks for private schools will raise £1.8 billion a year by 2029/30 to help fund public services, including supporting the 94 per cent of children in state schools, to help ensure excellence everywhere for every child.'