Question to the Department for Education:

To ask the Secretary of State for Education, if she will make an assessment of the potential impact of charging VAT on independent school fees on local authority costings to support displaced former private school children with special education needs.

This government is committed to ending the VAT exemption that private schools enjoy and will confirm the introduction of these changes at the Budget on 30 October. The Office for Budget Responsibility will also certify the government’s costings for these measures at that time. The right time to discuss any funding for state funded schools is at the Spending Review.

Children with Education, Health and Care plans that provide a necessary local authority funded place at a private school will not be impacted by this policy. This is because local authorities can reclaim VAT on service expenditure through existing routes.

Analysis by the Institute for Fiscal Studies (IFS) assumes a net gain to the public finances of £1.3 to 1.5 billion per year in the medium to long run as a result of removing tax exemptions from private schools. This would allow for about a 2% increase in state school spending in England. This analysis can be found here: https://ifs.org.uk/publications/tax-private-school-fees-and-state-school-spending.

The IFS report also projects that transfers from the private to the state-sector will be low at equivalent to less than 1% of state funded places.

The department regularly speaks to local authorities about all local pupil place planning pressures.