They've been failing on that front for years. Fuck all to do with VAT.
Keegan and others are trying to raise the bogeyman of children with SEND being chucked out of independent schools. There is no valid reason why they should. No child is placed in an independent schools under an EHCP unless the LA or tribunal has decided that there is no cheaper alternative able to meet their needs, so the LA can't just decide to take them out of school because it's become more expensive. The remedy is easy enough, the government can effectively reassign the VAT they receive from such schools by way of increased funding to LAs specifically as SEND funding.