‘I’ve been in the private school sector for decades. Parents are paying enough’

The Daily Telegraph 11 September 2025

Story by Ben East

Windermere School, idyllically set overlooking England’s largest lake, can trace its roots back to 1863. But heritage has offered little protection as it grapples with Labour’s VAT raid on independent schools, pension strikes, the continuing fallout from the pandemic and a 20 per cent decline in pupil numbers.

Since VAT was imposed at the start of January, a long list of private schools – many of them much-loved, smaller institutions – have been forced to close their doors for good. Windermere has had to take drastic measures to survive, even merging its junior and senior schools onto one site. Yet hopes of a profitable sale of the former building were dashed when the local authority refused permission to convert it into a hotel.

As one insider puts it, they needed to save an institution which demonstrated academic success and had a good reputation but was vulnerable to external pressures.

And make no mistake – in 2025, Windermere School is not alone in experiencing them.

“I’ve worked in education my entire professional career”, says Windermere School’s chair of governors Peter Hogan. “I’ve never witnessed as challenging a time for schools as this.”

The introduction of VAT on private school fees on January 1, 2025 – including boarding fees upon which Windermere School also relies – was the latest shock in an ecosystem which has been struggling for some time. Hogan says you can track the challenges to independent schools through Brexit back to the financial crash of 2008.

“Governors used to be quite a benign and supportive presence”, he says. “Now we’re having to be actively engaged in really quite challenging commercial decisions.

“You can see why so many smaller independent schools are limping along from one term to the next.”

When Labour announced the blanket VAT imposition on private education, the consensus was that it would be passed on to parents via inflated fees. If they were willing to pay £1500 a month anyway, many reasoned, an extra £300 was surely manageable.

But for a rural school like Windermere, intrinsically linked to the economics of its local community, a blanket 20 per cent fee increase would have been a shock. In November last year, in anticipation of the VAT imposition, fees were actually cut in some year groups to encourage new admissions, and in January the decision was made not to pass on the full 20 per cent to parents; the school set between 10 and 12 per cent increases. With the start of the new academic year in late August, fees have been frozen but whether this will continue is not clear and the leadership team will look at again in January 2026.

“I can completely understand why a big, brand name independent school with a huge waiting list probably wasn’t going to be bothered by putting up their fees”, says Hogan. “That’s why I would have preferred some consultation and nuance in the decision making from the Government.”

“Maybe I’m being naive, but the lack of that conversation meant real heartache and worry for a lot of people. We understood that, and had to manage these changes really quickly in a way that wasn’t just adding 20 per cent on to everyone’s fees.”

Katie Lewis is part of the Friends of Windermere parent community and has three children at the school. She says even the small rise has been a “shock to the wallet”, although it didn’t affect her feelings about a school she describes as the best place for her family. “Mainly because they were so forthright and honest and explained their decision-making”, she says. “The community has pulled together, actually, when necessary.”

Hogan believes the VAT imposition is evidence of pernicious views that assume the private school sector is awash with money. He says between 77 and 80 schools are under threat of closure or have closed since; earlier this month The Telegraph revealed at least 44 private schools had already closed or were set to do so because of the tax raid. Many have entered the state sector.

Windermere School has been proactive about meeting the challenges afflicting the sector head on.

Their first priority was to pay back a £2m Covid Business Interruption Loan in full, an issue many small businesses – not just private schools – have had to deal with. After the first 12 interest-free months, many found that their circumstances had barely improved – or in fact possibly worsened – while the repayments were mounting up.

“We ended up with this perfect storm of needing to get rid of the loan quickly, having rising interest repayments, yet having fewer student numbers due to the after-effects of the pandemic”. Hogan says.

One of the funding streams to repay this debt would have been another increase in school fees. Yet Windermere School has been clear this can’t always be the fallback.

“I don’t want to sound too evangelical about this but, at the end of the day, the parents are paying enough”, says Hogan. “The choice to pay school fees isn’t a social or political decision, it’s because they really want to do the best for their children. For a lot of them, the sacrifices they make are enormous.”

Windermere School instead looked to plug its debts with the sale of its Elleray Campus, an old Victorian villa housing its nursery, infant and junior school, then moved everyone to the senior school site; disruptive and potentially upsetting for children, but ultimately a necessary asset sale.

“As a parent I was devastated”, says Lewis. “I really wanted them to go all the way through at Elleray. But the children themselves were far more resilient. My son said ‘it’s not the building that makes the school, it’s the community’. Which just opened my eyes to how he felt about his education.”

The issue for the school, though, was that they ended up getting nowhere near the predicted value of Elleray Lodge and Grounds.

Originally set at approximately £5m, a number of potential buyers including hotel operators were interested. But local Lake District planners did not agree to its change of use from an educational establishment. They had to settle for a sale to a developer – anticipated to be completed by the end of the month – for less than half the amount for which they had originally hoped given the ongoing planning issues.

“We needed to sell the facility to maintain the school as a viable business”, says an insider. “What’s so frustrating is that ultimately, unless the local authority want the site empty, they will end up having to agree to change of use, as no-one is opening schools at the moment; in fact, they’re closing.

Hogan says authorities at all levels underestimate the economic benefits private schools deliver for their local communities – meaning they can be unsympathetic when such institutions are facing struggles.

“We’ve not been able to shake this feeling from certain places in the political sphere that these issues we’re going through are some sort of payback”, he says. “Some of that is undeniably because of the image of public school boys – all eccentric uniforms and entitled, elite environments.

“What that doesn’t take into account is that a lot of people are very proud of and happy with their local independent school. Often they’re the largest employer in the town too.”

Another pressure point faced by the school has been the spiralling cost of teacher pensions.

In April 2024, the teachers’ pension scheme (TPS) increased the employer pension contribution rate from 23.6 per cent to 28.6 per cent of a teachers’ salary – a cost Hogan says was unaffordable. That rate is set by the Department for Education, but in state schools it is funded by the taxpayer.

The school’s decision to withdraw from the TPS (which is not mandatory for private institutions) led to strike action and unwanted headlines. Of all the challenges for Windermere, you sense this was the most painful, not just because of the unwelcome attention but because it put them at odds with a teaching cohort valued by the leadership, parents and children.

“It was horrible”, says Hogan. “Don’t get me wrong, I really felt for the teaching staff, but we were squeezed into an impossible situation on all sides.”

Windermere School offered an alternative scheme but, before any consultation or negotiation, the teaching union advised strike action.

The National Education Union’s view is that “employers claim that the increase is unaffordable. For some this will be true but for many it is not true… our strategy is act early”.

Most of those who took strike action no longer work at the school, through their own choice. “It was just really sad”, says Hogan.

Still, the summer holidays give Windermere School the chance to look forward after a tumultuous few years. What advice would they give to similarly-sized independent schools?

“When the VAT news was solidifying, it became really clear that we could either be the kind of governors who sold the assets and bumped along for a few years, or we could properly repair the plane mid-flight and come out the other side stronger for it”, Hogan says.

As part of that process, letting the head teacher concentrate on education and pastoral care, and finding other people to run the budgets has been critical.

Being smaller has its benefits as Windermere School has been able to be more agile in its decision making and truly include its parent body; the latest statistics reveal 221 students in small class sizes and numbers are growing.

“We’ve really felt a part of this journey with the school”, says Lewis, “It just feels like we’ve built a special community here.”

So is that the real lesson? Make sure parents feel they are in partnership rather than just customers?

“Everyone is trying different tactics and I’ve got no guarantees for the future of independent education as a whole”, says Hogan.

Ben East

First published in The Daily Telegraph September 2025