Private schools are severing religious ties, forming unlikely alliances and going co-educational to survive a “second wave” of closures in the aftermath of VAT.
The sector is undergoing a “significant reset”, insiders say, with several schools joining large groups or trying to broaden their appeal in a battle for survival.
It comes after 105 private schools in England and Wales closed in the 18 months since Labour took power with its promise to levy 20 per cent VAT on fees.
The Independent Schools Council, a member body representing 85 per cent of the sector, linked these closures to the Government’s tax policy.
The Government has disputed this assessment, noting that 106 private schools opened from 1 September, 2024, to 31 August, 2025, and that pupil numbers remain “within historical patterns seen for over 20 years”.
But headteachers have warned that the worst is yet to come, with schools facing continued financial pressure as tax changes “take root” in their accounts, and pupil recruitment remains “broadly soft”.
The headmaster of Wycliffe College in Gloucestershire, Christian San José, predicted “another wave of closures” over the next 12 months that could be “more significant” than the first, including some of the “larger, seemingly more robust” schools.
He told The i Paper: “The operating environment for schools has not improved and, if anything, is tougher for many than it was 12 months ago as we see continuing pressures from energy prices, and the increase in National Minimum Wage and the pull-through from business rates relief removal take root in schools’ accounts.
“We are now into the second pupil recruiting cycle after VAT imposition, which means school rolls for some may fall further. The market for pupil recruitment is still broadly soft, with parents being more discerning about whether to invest in independent education and with worries about the stability of schools putting additional pressure on budgets.”
San José said schools that have already restructured due to falling pupil numbers may not be able to go through the same process again, meaning they could “make the very difficult decision to close”.
How schools are battling for pupils
Nicholas Pietrek, headmaster at nearby Stafford Grammar School, said VAT is “now starting to really bite” for schools that have “clung on” over the last year.
“There would have been those schools that were holding on throughout that first year to see what would happen, and perhaps hoping that other schools would close to help bolster themselves.”
Pietrek predicted an “ebb and flow” of closures, with some schools shutting and others benefitting from the extra pupil numbers, then the cycle repeating.
Several schools have changed their core offer to adapt to the new landscape, either joining large education groups, severing long-standing religious ties to appeal to more families or dropping their single-sex ethos.
Large education groups are often backed by private investment firms, allowing significant capital to be poured into the sector while costs are reduced through economies of scale and the centralisation of administrative operations.
The i Paper has previously reported that private schools are battling it out for a shrinking pool of students with super-sized bursaries and enticing marketing offering “jazzy” extra-curricular activities and a route to elite sports.
St Paul’s School, a private boys’ school in London, has formed an unlikely alliance with several prep schools, including Durston House, Shrewsbury House School and The Rowans School.
The group has been formed to ensure a “viable and protected pathway for pupils wishing to enter independent secondary education”, but several of the feeder schools are co-educational, meaning there is no obvious senior school for the girls.
Shrewsbury High School, a girls’ school that was established in 1885, announced it would be accepting boys from September 2026 after being sold to Inspired Learning Group. This is one of the largest independent school groups in the UK, with 22 schools and nine standalone nurseries.
Shrewsbury High School will soon be accepting boys (Photo: Google Maps)The school was sold by the Girls’ Day School Trust (GDST), which said changing the offer to co-educational would “support the school’s long-term future” amid changing “market conditions”.
“As a semi-rural school, factors including a declining birth rate, VAT on fees and rising operational costs are having a significant impact,” the GDST said.
Darren Payne, the head of Shrewsbury High, said the move is to place the school on the “strongest possible footing for the future”.
Girls’ school takes in boys
Harrogate Ladies College, a leading Yorkshire private school and pioneer of girls’ education, also announced it would be accepting boys in its senior school from September 2026, and will be renamed Duchy College.
The school, which initially opened as a co-educational institution in 1893 before pivoting to all-girls in the 1980s, will continue to operate under the same leadership team.
Harrogate Ladies College will be renamed Duchy College and accept male students (Photo: Facebook)Exeter Cathedral School, an 850-year-old choir school, has dropped its ties with the Church of England after being taken over by Inspired Learning Group from September.
The school, which dates back to 1179, announced the closure of its prep provision following “unavoidable financial pressures that many small independent schools are currently facing”.
Prior Park College, in Bath, severed its ties with the Catholic Church in September 2024 to be “attractive” to a wider range of families and reflect the diversifying student body.
Headteacher, Ben Horan, said the decision pre-dated VAT, but pressure from the tax “helped to catalyse a decision that has been a long while in the gestation”.
Melanie Sanderson, the managing editor at Good Schools Guide, said the imposition of VAT means schools must “adapt to remain viable, or risk the inevitable”.
“Our team of writers and consultants visit hundreds of schools each year and are seeing a significant reset, with schools forming alliances that would once have been unnecessary and making strategic decisions that will fundamentally reshape what they offer.
“Hard-nosed business choices are at the core of this and sometimes at the expense of fondly-held traditions.
“Mergers, group membership, partnerships, moves to co-education, the loss of year groups and the severing of religious ties are all becoming more common in order maintain a product with broad enough appeal.”
Schools adjusting to ‘new reality’
Despite the upheaval, schools are adjusting to the “new reality” and many are now “more robust financially than 12 months ago, whether through economies, acquisitions or mergers”, according to Neil Roskilly, who ran the Independent Schools Association (ISA) from 2010 to 2021 and now advises schools.
While “cashflow is tricky”, he said: “Schools close every year but I’m expecting fewer than in the last year, and more schools will open, which is the side of the coin some choose to ignore.”
David Woodgate, chief executive of the Independent Schools’ Bursars Association, estimated in July 2025 that the imposition of VAT would force between 150 and 200 schools to close.
Though he believes his assessment “remains realistic”, schools are taking measures to “face up to the challenges of VAT” such as reorganisation, staff redundancy and mergers.
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Rudolf Eliott Lockhart, the current CEO of the ISA, added: “The adverse effects of this misguided policy will undoubtedly continue to play out for some time to come, and we are likely to see further consolidation and closures in the sector.”
A Government spokesperson said: “The Office for Budget Responsibility’s Budget report shows that ending tax breaks for private schools will raise £40m a year more than initially expected to help fund public services, including supporting the 94 per cent of children in state schools to achieve and thrive.”
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