There has been a surge in the number of private schools for children with special educational needs and disabilities (SEND) opening since Labour’s VAT policy.
These independent providers can charge local authorities more than £100,000 per pupil a year and have been accused of “exploiting” the SEND crisis and pushing councils “to the brink”.
A council insider told The i Paper that local authorities have not been able to keep up with the demand for special school places, leaving a “captive market” where private providers can “charge what they want” – with some nearly tripling their fees over the last three years.
While much of the private school sector is in an race to attract pupils and avoid closure, private SEND schools are thriving.
They have largely been sheltered from Labour’s decision to levy 20 per cent VAT on fees, as the majority of their pupils are funded by councils, which are exempt from paying the extra tax.
There has been a 43 per cent increase in the number of private SEND schools in England over the last decade, almost doubling from 456 in 2015/16 to 803 in 2024/25, new analysis of Department for Education (DfE) data shows.
New independent special schools are opening at a rapid rate, with 75 new settings since 2023/24 – the year Labour won the general election promising to levy 20 per cent VAT on fees.
With private schools struggling to fill all their places, Nick Pietrek, the headteacher of Stafford Grammar School, said some colleagues are considering pivoting to SEND as “that’s where the money is to be made”.
“Schools will be looking to target council revenues,” he told The i Paper, adding that private SEND schools charge fees in a “completely different league” to the rest of the sector.
There is also evidence of SEND providers acquiring former state school sites, with several requests to the DfE to dispose of playing fields for new SEND schools from local authorities in recent years.
A lack of Government funding for new special schools has left councils in desperate need of more SEND places, meaning lucrative offers to sell land can be hard to refuse. But ultimately, it will be councils that foot the bill for these school places.
Councils spending £60k to over £100k per pupil
Parents often fight to get private SEND schools named on their child’s Education, Health and Care Plan (EHCP), a legal document which describes a child’s individual needs and unlocks council funding to ensure those needs are met.
However, these school placements cost an average of £62,000 per head, which is more than twice the cost of a state sector place at £24,000, according to the Institute for Fiscal Studies (IFS).
squareEDUCATIONExclusiveFour support tiers for SEND children - with EHCPs only for those with greatest need
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Annual fees for one pupil can even cost councils more than £100,000 a year. A 2025 Ofsted report for Hilden Park School – a private special school run by the Witherslack Group in Tonbridge, Kent – found that annual day pupil fees range from £90,000 to £104,614 per pupil, with the highest fee level representing the most complex cases.
The IFS found that the number of people with EHCPs attending private special schools tripled from 10,000 in 2016 to 30,000 this year. The growth in spending on private-school fees accounted for nearly a quarter of the total rise in local authority high-needs expenditure for children with SEND since 2018.
A SEND specialist at a council that has struggled with its finances said local authorities have “no choice” but to pay for private special schools due to a lack of places in the state system, especially if it is a school named on an EHCP.
“The vast majority of maintained special schools are running at 110-120 per cent capacity and simply cannot admit more students without impacting the education of their existing students,” they explained.
The council insider said this means “we are spending millions of pounds on far less places and there is less money to support our schools”.
There is a shortage of special school places across England, with the number of pupils in special schools now hitting a record 194,000, up from 109,000 in 2014/15, according to the County Councils Network (CCN). In 2023/24, 83 per cent of state-funded special schools were either full or over-capacity.
If nothing changes, councils could be spending £3.2bn a year on private special school places for children with EHCPs by 2029, the CCN warned.
It comes as eight in 10 councils warn they will become insolvent over mounting SEND deficits by March 2028, according to a new survey by the Local Government Association. The Office for Budget Responsibility (OBR) predicted that high-needs deficits will hit £6bn by 2028/29.
Last year, the Chancellor announced that SEND deficits will be absorbed into central Government budgets from 2028/29 to remove the burden from cash-strapped local authorities, but it is not clear where this money will come from.
‘Lack of investment in state-run SEND schools’
North Hill House, a school in Somerset run by special education group Aspris, charges annual fees of up to £120,000, according to a 2024 Ofsted report. The company said it offers “highly specialist, personalised care and support” which can bring “additional costs”.
Options Higford – a private special school in Shropshire run by Options Autism – charges between £64,000 to £94,000 per pupil a year, a 2025 Ofsted report shows.
North Hill House school, run by Aspris, in Somerset, charges up to £120,000 per child (Photo: Google Street View)These schools are among hundreds run by education groups backed by major investment firms – often based overseas – meaning significant profits are extracted from the system and funnelled abroad, rather than being reinvested for UK taxpayers.
Options Autism is one of the UK’s largest SEND providers with more than 40 settings. The group said its expansion is to provide “safe, well‑equipped environments for more children to access high‑quality support close to home”.
A spokesperson from Outcomes First Group said it works “collaboratively” with local authorities to ensure value for money while delivering “highly personalised specialist support for children with the most complex needs”.
“Any fee increase has been limited to inflation, reflecting rising staffing and regulatory costs,” it added.
Aspris, which operates 32 schools, is ultimately owned by Waterland, a Dutch private equity firm. Witherslack Group, with 36 specialist schools across England, is owned by Mubadala Capital, a subsidiary of the Abu Dhabi sovereign wealth fund Mubadala Investment Company.
Caroline Voaden MP, the Liberal Democrats’ schools spokesperson, said a lack of investment in state-run SEND provision has created a “vacuum that private equity firms are now exploiting for their own gain”.
“The ballooning costs of private SEND placements are a direct symptom of a broken system.
“At the very same time council budgets are being pushed to the brink, private providers are seeing their profit margins soar. All the while the taxpayer is being asked to foot the bill.”
The Lib Dems are calling for a profit cap on private providers to “ensure that every penny of funding for special needs provision must go into the classroom to support children, not into the pockets of private equity”.
It is understood that ministers hope their plans to overhaul the SEND system, revealed in the delayed Schoold White Paper in the coming weeks, will reduce demand for costly private-school places by beefing up SEND support in mainstream schools.
The Government is understood to recognise that some private-school places will still be needed after the reforms have been implemented, but that reduced demand will mean providers can no longer charge sky-high prices to remain competitive.
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