Dr Simon Hinchliffe reflects on the impact of recent policy changes on independent schools and the value of education as a public good.
In recent weeks there has been a flurry of reporting on the condition of independent schools in the UK. A sector census pre-release, and proxy health check, intersected with some newly published Department for Education statistics including teacher recruitment trends. I’ve done my best to keep up and record the salient points in one place, if only for my own benefit and sanity (high ambitions, I know).
VAT on fees was, according to the Government’s own words, “expected to raise £1.8 billion annually by 2029/30” and forecast to require a relatively modest “10 per cent increase in fees (in addition to underlying growth)”.
The underlying growth of fees is, of course, not insignificant, driven by changes to the minimum wage and National Insurance, unexpected and marked increases in employer contributions to the Teachers’ Pension Scheme, and inflation of food, fuel, and wage costs – among other factors. The latter is particularly impactful for institutions like Bradford Grammar School (BGS) where typically 70% of all costs are staff related.
The strong sense from government was, and still is, that independent schools can and should absorb much of the VAT and other rising costs by virtue of accepting a manageable hit on their (perceived) large surpluses.
The promised, positive outcome of all this: 6,500 new teachers.
The predicted 10% fee rise has not materialised. That was fanciful. Increases have, by necessity, been higher. A vanishingly small number of schools took a bold stance on relatively low fee positions – but these are unlikely to be sustainable. In reality, there were no cushy margins to absorb the blow. Since 2010, per-pupil funding in state schools rose by 59% in absolute cash terms. The BGS fee rise over the same period has been 50% despite the same uplift in costs, mostly associated with national salary expectations. The vast majority of independent schools are efficient businesses too.
The government knew there would be an impact. The Treasury acknowledged that “some parents may not be able or willing to pay higher fees. The government estimates that, in the long term steady state, 37,000 pupils will leave or never enter the UK private school sector as a result of the VAT policy … [and went on] … the government further estimates that approximately 3,100 additional pupils in England will leave or never enter the private school sector as a result of the business rates policy.”
That’s a projected fall of just over 40,000 pupils in the “long term”, realised incrementally. The government said 3,000 of these children would leave independent education in the first year of the policies. That’s a forecast Michael Fish would be proud of – some readers will remember his gaffe on telly in 1987.
Over 100 independent schools have closed or announced their imminent closure since the policy was implemented in January 2025, and over 30,000 pupils have left the sector. This dramatic trend cannot be the impact of slower-moving demography, as some commentators have suggested. These same voices tell us that the actual number of independent schools has increased. That only holds for specialist providers, state funded and exempt from VAT. And whilst we are myth busting: this was never about the closing of a loophole or smoothing of a fiscal anomaly, but rather the creation of a whole new tax, as the High Court has confirmed, and not a means to end a “taxpayer subsidy”, the latest claim, which finally has me utterly perplexed. Shifting sands.
Fulneck, Mount St Mary’s, Moorlands and Queen Margaret’s, schools in our BGS region, have shut. More are likely to follow. And when we say schools, we mean people, children, their families and my colleagues, and all the services and businesses that feed into any school operation. Where does that leave the £1.8 billion of anticipated tax revenues, initially earmarked to provide for an additional, desperately needed 6,500 teachers, now destined to fund undefined public services, possibly related to housing? The number of teachers in state nursery, primary and secondary schools declined by 4,754, (1.1%) between the 2023/24 and 2025/26 academic years, according to the Department for Education data. Regrettably, our country is losing urgently needed teachers despite the promised VAT dividend.
All children deserve a good education and start in life. But the VAT policy was built on a flawed understanding of independent schools and their finances, flawed reckoning of the likely impact, and flawed expectations of the potential benefits to the Treasury. This is not a political or an ideological statement or argument. It’s simply a plea for an objective analysis and fact-based discussion. Every school that closes is a tragedy – this is the least they deserve.
Education in all forms is a public good. If a country’s education system works, then everyone benefits. A cursory glance at a list of Bradford Grammar School alumni, comprising, for example, entrepreneurs, actors, intellectuals, athletes, composers, artists, politicians and diplomats, and even astronomers, (see: Old Bradfordians), provides a snapshot of the public benefit and contribution of just one independent school. Countless other Old Bradfordians, in private and public sectors, and through their wider interests, continue to serve our national interests and their local communities. Our school and its people strive to contribute.
Moreover, the UK education system has always embraced plurality – binary characterisation of state vs private does not do justice to the richness of our educational landscape. It is precisely because of this plurality that the contribution of all schools to the UK has been so broad in scope. Plurality, however, and parental choice are being damaged.
The reflection started with statistics and bringing together of recent press clippings; but it ends with a note about connection and contribution, and a values-driven commitment on the part of independent schools to our nation. We seek to add value and make a difference, whichever way the ideological winds might blow.
Read more from Dr Hinchliffe, in his Headmaster’s Blog.
“We seek to add value and make a difference, whichever way the ideological winds might blow”