Private schools facing closure following the Government’s plan to impose VAT on fees were already seeing “big budget shortfalls”, the Education Secretary has said.

Bridget Phillipson added that her focus is on state school education, which 93% of children in the UK attend, with the policy aiming to drive up standards in this area.

From January, the Government plans to remove the VAT exemption and business rates relief for private schools to enable funding for 6,500 new teachers in state schools.

Currently, independent schools do not have to charge 20% VAT on their fees because there is an exemption for the supply of education.

Her comments come after two private schools in Scotland - Kilgraston School in Bridge of Earn and Cedars School of Excellence in Greenock, Inverclyde - announced they are to close their doors. 

Kilgraston had been struggling to cover costs since 2023 and decided to shut after an investment deal with a Chinese company fell through. 

The small Cedars school announced it would close after approaching parents to find out if their could afford to cover the VAT rise - which would have added around £150 per child to school fees. 

Kilgraston has announced it is to close Kilgraston has announced it is to close (Image: NQ)

The Association of School and College Leaders has warned some schools are likely to face closure as a result of the policy, and introducing the change during the middle of an academic year could cause additional disruption.

Ms Phillipson said: “Private schools are businesses that can make choices about how they manage their budgets, the level of fees that they charge, and ultimately it’s about how attractive they are to families in terms of the numbers of students that are sent there.”

Speaking to Sky News, she added: “We have seen private schools in recent years whack up their fees year on year, way beyond inflation, and that has priced out lots of people.

“I think what we’ve seen with some of the examples that are being discussed are schools that were already experiencing big budget shortfalls, weren’t attracting the same numbers of students that they might like to attract, and that’s what’s driving what we see here now.

“Our plans to impose VAT on private school fees are about driving high standards in our state schools.”

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Asked whether it matters if private schools close as a result of the policy, Ms Phillipson said: “I want private schools to be an option for those parents who choose to send their children there. Of course, they will be able to continue to do so.

“I know that parents want to do what’s right by their children, and that’s absolutely as it should be, but I would just gently point out that 93% of children in our country go to state schools.

“That’s where I’m determined to focus my efforts as Secretary of State, to tackle some of those big gaps that we see opening up, where it comes to outcomes for our young people, making sure that the background that you’re from, the town that you’re born, doesn’t determine what you can go on to achieve.

“That does involve making political choices about how we raise money, how we spend money, and that’s what imposing VAT on private schools is all about – driving up standards in our state sector, where the majority of your viewers will send their children to school.”