The Chancellor has been accused of being (Image: Getty)
The number of private schools to have gone bust has doubled in the last year, with experts laying the blame at the door of Rachel Reeves. New data released on Tuesday shows that 12 schools fell into administration between January and July this year, double the number to have done so in the previous year.
Risk advisory firm Kroll warned that the by the end of the year, the number of schools falling into administration across the sector could increase by 50% when compared with 2024. In January, the Chancellor removed private schools’ exemption from paying the 20% rate of VAT, a move which drew strong criticism from parents and educators. Reeves also removed the sector’s charitable status meaning that from April this year, schools were no longer able to claim business relief on business rates, a form of tax paid by businesses related to the size of their premises.
The move was criticised for making it more difficult for parents to afford private education (Image: Getty)
Benjamin Wiles, managing director at Kroll, said: “While there continues to be economic uncertainty, weak business confidence and unwelcome speculation on further taxes, we are not seeing a surge in company insolvencies.
“Naturally what is more interesting is the picture within certain sectors. We saw a jump in administrations among education and schools, most likely as a result of the government’s VAT increase that took effect at the beginning of the year.”
Critics have argued that the move to add VAT to school fees could see thousands of parents no longer able to afford to send their children to private school, risking adding additional strain on an already stretched public education system.
The Association of School and College Leaders, which represents state and private headteachers, labelled the policy introducing the VAT increase as “rushed”, while other critics accused the government of being “ideological” in their pursuit of increasing tax receipts from education.
It has been alleged that the policy has forced 10,000 children out of private education (Image: Getty)
Conservative MP Richard Fuller claims that as many as 10,000 pupils have been forced to leave the private sector as a result of the decision.
He said: “Labour’s ideological crusade against independent schools continues to backfire, with thousands of pupils forced to leave, schools closing, and no sign of any benefit for the state sector.
“Latest figures as at August 2025 show that at least 10,000 pupils have been forced to leave independent schools and around 50 schools have sadly closed already, putting more pressure on the state sector.
“All the while Labour has failed to deliver on its commitment to recruit 6,500 extra teachers in the state sector.”
A government spokesperson said: “Ending tax breaks for private schools will raise £1.8 billion a year by 2029/30 to help deliver 6,500 new teachers and raise school standards, supporting the 94% of children in state schools to achieve and thrive.”
The Department of Education have been approached for comment.
