Education Leader Warns of Financial ‘Shock’ from Private School Closures Amid Labour VAT Concerns

Private educational institutions are experiencing severe financial strain following the introduction of VAT on fees by the Labour party, according to Anne Cotton, a prominent head teacher.

As the chair of the Headmasters’ and Headmistresses’ Conference (HMC), which represents over 300 leading independent schools across the UK, Cotton stated that the consequences of these financial pressures have created significant distress within communities.

Since the tax was implemented in January 2025, schools have found the past two years particularly challenging.

The Independent Schools Council has indicated that more than 100 private schools have shut their doors since the VAT was enacted.

Dr. Cotton, who serves as the head of King’s College School in Wimbledon, characterized this period as “an important and challenging time” for the sector.

HMC, known for representing some of the UK’s most elite schools, including Eton and Harrow, acknowledged that while many of these institutions are financially stable, they can still engage in “positive advocacy” to support others facing hardship.

Speaking at the HMC annual conference in Manchester, Cotton reflected: “The last couple of years have been really tough, and I am aware that for some institutions and regions, the pressures are profound.”

Anne Cotton, head of King’s College School in Wimbledon, speaks about the financial pressures on private schools.

She expressed concern over how school closures affect young people, families, staff, and the wider communities, noting that these impacts are deeply felt.

Dr. Cotton recounted her experiences at divisional meetings where the tangible shock of local school closures was evident.

The Labour government has defended the 20 percent VAT, arguing it will fund enhancements to the public education system, including the hiring of 6,500 new teachers.

However, the tax has jeopardized the financial health of smaller, more affordable schools, which have struggled to pass on the tax burden to families already facing financial constraints.

Many families have found themselves unable to afford private schooling, resulting in a shift to the state sector and declining enrollment figures.

The private sector asserts that it already contributes to the state system by providing shared resources, facilities, and sports fields.

Dr. Cotton emphasized the importance of showcasing the existing collaborative efforts between independent schools and state institutions, charities, and local entities.

Moving forward, she stressed the need for HMC to demonstrate this positive collective contribution effectively.

Protesters against the VAT policy gathered outside the High Court last year.

She announced that HMC will not only focus on promoting positive impacts but also continue addressing the challenges faced in recent years.

Among the schools that announced closures during the summer were Avon House School in Essex and Sompting Abbotts Prep School in West Sussex.

Additionally, Ruthin School in Denbighshire, North Wales, which once boasted notable alumnus Julian Lennon, has also closed.

A census in January revealed a decrease of 30,000 children enrolled in private schools since the VAT’s implementation, with an additional drop of 20,000 in the preceding year.

This trend is nearing the government’s projection of a 37,000 decrease due to the VAT.

A spokesperson for the government stated, “We take pride in the fact that ending tax breaks for private schools is generating billions to enhance education for the 94 percent of children in state schools.”

‘The overall decline in private school enrollment reflects broader demographic shifts in the school system rather than the VAT policy alone. The trend in falling primary school numbers has been noticeable since 2018/19, long before the VAT change.”