No exodus to state sector after VAT added to private school fees, say English councils.

[FruitPolos]

Article in today's Guardian. Interesting to note the comments from Surrey in particular given the discussion on Mumsnet about this particular area.

https://www.theguardian.com/education/2025/mar/10/no-exodus-to-state-sector-after-vat-added-to-private-school-fees-say-english-councils

"Surrey, which has large numbers of children in private education, recorded a dip in the proportion of families getting their first pick of schools for September. But Clare Curran, the county council’s cabinet member for children, families and lifelong learning, said: “Surrey has not seen a significant rise in the number of applications for a year 7 state school place for children currently in the independent sector compared to last year.“For September 2025, 664 on-time applications were received from Surrey residents with children in the independent sector, compared with 608 for September 2024, a rise of 56.“While the percentage of applicants offered their first preference school has decreased for September 2025 [80.6%] compared with 2024 [83.1%], the 2025 figure is not dissimilar to the 2023 figure of 81.3%.”

Those schools which didn’t increase fees by 20% are now facing further price hikes because of business rates, NIC, and minimum wage changes.

Price does affect demand. It’s literally the first thing students are taught on any economics course. Even the government have accepted that the tax will lead to fewer pupils in private schools.

I doubt there are many independent special schools for profoundly disabled children as these tend to be a group where even local authorities cannot deny need. But it is possible that there are. Independent specialist schools can cost over £200k per annum for those with high needs. So even by private school standards very very few parents can afford them. Even for day pupils with lower need (eg dyslexia) fees are typically much higher than most private fees. As for EHCPs - they only exist in England and specialist boarding schools (which may offer 52-week placements) are not even just a UK market, but an international one. So fees come from a range of sources, including parents.

Obviously if it doesn't affect you you can be this blazee about eradicating some of the best schools in the country and restricting the best to the uppermost echelons. Most parents want more choice and options, not less.

There are private school parents having to remortgage to pay school fees and new financial products with monthly payment plans are being launched to deal with just that. But whether these people once done with school fees are going to want to remain productive net contributors - I highly doubt it. They are currently cornered and will do all they can to get something back in the future.

There are only 800k key tax payers in this country. People can joke all they like about bankers and lawyers etc. and CEOs. If U.K. Plc were a company these are our key workers. If they quit to a certain level in percentage terms, we are literally all screwed, not least the most vulnerable on welfare. Labour are playing with fire here. Unfortunately a lot of those in charge seem to lack basic management and mathematical skills. You never kill the golden goose, however annoying and loud they are. Just hoping Trump’s antics help us out here somehow, indirectly.

Not every school has increased fees by 20% overnight though?

You are correct. For many schools it will be more that this as other costs are increasing too.

It’s literally the first thing students are taught on any economics course.

Why don't you think it would apply here @strappyshoe?

Sigh... of course these things are not new.

However the numbers doing these things are likely to increase.

If I am waiting for a hip replacement and there are 100 others waiting then I will get my hip replaced quicker if 50 of those waiting decide to go private. If it suddenly becomes much more expensive and 30 of those 50 decide to stay on the list then I am going to have to wait longer.

And no, not all private school applicants will pass the super-selective grammar tests but when you are talking about grammars in Kent or Birmingham that are not super-selective then it will definitely make a difference if those parents opt for the grammars.

Why don't you think it would apply here

Because "The IFS report found the number of private school pupils has been largely stable in recent years despite what it says was a 20% real-terms increase in average private school fees since 2010, and a 55% rise since 2003."

Why do you think fee increases haven't reduced demand @EasternStandard?

Sigh... of course these things are not new.

However the numbers doing these things are likely to increase.

Sigh...I just don't think the numbers will be significant in anyway. Like I said we shall have to see.

Because kids go for a variety of reasons, including SEN and state schools are increasingly failing them leaving them with little choice.
Waiting and seeing is why the state schools are in this mess. We need proper planning and funding.

Obviously if it doesn't affect you you can be this blazee about eradicating some of the best schools

How many times, I don't believe the best schools in the country will be eradicated. You do, fine.

I haven't ruled out private secondary but I'm not sure for my dc that it's worth the additional cost with or without VAT.

restricting the best to the uppermost echelons

So the privilege wasn't an issue before but it is now that some current users will be priced out?

Most parents want more choice and options, not less.

Most parents don't care about VAT on school fees. Or do you think they do?

@JeanPaulGagtier so you agree then, it's not a simple as price affects demand?

Because a 20% increase in one year is rather different to a 20% difference over 15 years.

Perhaps?

The average house prices in England has gone up from £167,823 in 2010 to £290,564 in 2024. That's a 14% real terms increase, which hasn't affected demand.

Do you think that an extra 14% stamp duty (on the whole price of the house) introduced with 4 months notice would change demand?

Clue:

the stamp duty holiday in 2020-2021, which saved people a maximum of 3% of the value of their house in tax - saw average monthly sales of properties priced between £500k - £925k of 47% above the 2017-2019 monthly average...

compared to an decrease of 12% for houses in the £125-£250k bracket, where people only saved a maximum of 1% of the value of their house with tax.

www.cbre.co.uk/insights/articles/how-did-the-stamp-duty-holiday-affect-residential-property-sales

It's very easy actually. I know of a child who got places both at St Paul's and top grammar. SP has been their target school for years, they only applied to grammar as a "mock" and backup, they never wanted to send DC to state.

Now they've reconsidered because of VAT and DC will be going to grammar.

Which in turn means some other child will miss out on the place taken by them. If their family can't pay for private, tough.

I very much doubt this case is unique.

That’s called life

And another child will get to go to St Paul’s. It’s swings and roundabouts.

The vast majority of people have never been able to afford private school. Now the cut off is a bit higher - those children are welcome to join the state school system.

There are quite a few specialist SEN private schools for disabled children within Jewish community. Families pay directly, without jumping through hoops for years to get EHCP while the child's condition deteriorates.

Same for specialist schools for severely autistic children. Some of these schools were organised by parents initially.

No, you cannot say that. It is too early to tell.
Only someone in bad faith or who doesn't know what they're talking about could say that.

As has been explained, many families going private had always applied to state schools as a plan B, so there was never going to be a huge increase in application numbers.

The real question is: will waiting lists move less this year than the previous ones, because fewer kids go private and more families accept a place in state schools, place which they would have refused in the past to go private?

THIS is the real question. And it's a question which cannot be answered now, but only in September 2025.

Also, national averages are meaningless. Not every single school in the country will be disrupted, but some areas will be disrupted much, much more than others.

Lastly, it is worth noting that Labour did not do any estimate, modelling nor costing exercise. And they have no plan for how to monitor the impact, how much money they expect to raise, how to spend it, etc. Because ideology trumps evidence. And I say this as a historical Labour voter who has never voted Tory.

Well, time will tell...

But so far it seems pretty much business as usual.

@baital What part of "we cannot tell now, we need to wait till September to see" is unclear or do you disagree with? If you disagree, why?

I asked before if it was ignorance or bad faith. I'm starting to suspect the latter.

Another child will go to SP only if they have money and applied.
You are missing the point.

So far all the (personally invested) doom mongers haven't achieved any successful predictions.

I suspect when it comes to September the state system won't be overwhelmed.

So what's the difference between that and a clever but average family income DC who may have gone to SP had their parents had the money and they had applied? That principle has always stood, it's just the parameters have now changed somewhat and people are angry because they are finding themselves on the wrong side of the elite marker.

What's so great about the policies that wipe out funding and end in welfare cuts?

“it's just the parameters have now changed somewhat and people are angry because they are finding themselves on the wrong side of the elite marker.”

I think you may well find that in the long run, unless the bright internationals fill the void, those top private schools will not be so elite anymore, purely academically speaking.