Question to the Department for Education:

To ask the Secretary of State for Education, what estimate she has made of (a) the number of SEN pupils expected to transition to the state sector as a result of the introduction of VAT on independent school fees and (b) the cost to the state education system of those children moving from private to state schools.

His Majesty’s Treasury (HMT) is responsible for VAT policy. HMT has published its assessment of the impacts of removing the VAT exemption that applied to private school fees, which can be found on GOV.UK: https://www.gov.uk/government/publications/vat-on-private-school-fees/ac8c20ce-4824-462d-b206-26a567724643#who-is-likely-to-be-affected.

This overall assessment considers special educational needs and disability (SEND) but does not provide a separate assessment broken down by SEND.

Overall, the government predicts that, in the long-term steady state, there will be 37,000 fewer pupils in the private sector in the UK as a result of the removal of the VAT exemption applied to school fees. This represents around 6% of the current private school population. This movement is expected to take place over several years, and most moves will occur at natural transition points. Of this number, the government estimates an increase of 35,000 pupils in the state sector in the long-term steady state, with the other 2,000 consisting of international pupils who do not move into the UK state system, and domestic pupils moving into homeschooling. This state sector increase represents less than 0.5% of total UK state school pupils, of which there are over nine million.

The government expects the revenue costs of pupils entering the state sector in England to steadily increase to a peak of around £0.3 billion per annum after several years. However, the government expects to raise around £1.8 billion per annum by 2029/30 from this VAT policy and from removing private schools’ eligibility for business rates charitable rate relief.

Longer term impacts on those who move schools may be lessened by revenue raised by this measure being used to help the 94% of children who attend state schools.

It is important to note that pupils who need a local authority-funded place in a private school will not be impacted by the changes. The majority of pupils who have special educational needs (SEN) are educated in mainstream schools, whether state-maintained or private, where their needs are met. The overwhelming majority attend state schools. To protect pupils with SEN that can only be met in a private school, local authorities that fund these places are able to reclaim the VAT they are charged on those pupils’ fees.

The department supports local authorities to provide suitable school places for children and young people with SEND through annual high needs capital funding. This can be used to deliver new places in mainstream and special schools, as well as other specialist settings. At the Autumn Budget 2024, the government announced a £2.3 billion increase to the core schools' budget in 2025/26, increasing per pupil funding in real terms. This included a £1 billion uplift to high needs funding in 2025/26, providing additional support for the more than one million children in the state sector with SEND.