UK SEN Schools: Investment, Growth and M&A Landscape

With demand for specialist SEN education continuing to grow, the UK market remains highly attractive for investors and operators. As of January 2024, over 1.6 million pupils in England had identified special educational needs, with 576,000 holding Education, Health and Care (EHC) plans - an 11.4% rise from the previous year. Increasing diagnostic awareness, particularly around autism and mental health, continues to drive this growth.

Local authority capacity remains insufficient to meet demand, leading to greater reliance on independent specialist schools. Council spending on private SEN placements rose dramatically, from £576 million in 2015-16 to a projected £1.8 billion in 2024-25, with independent school placements increasing significantly over the same period. Despite higher fees (averaging around £62,000 per pupil compared to £24,000 in state settings), private operators are essential for delivering specialist provision, underscoring significant sector reliance on their expertise.

Private equity activity remains robust, with firms actively pursuing consolidation opportunities. Recent notable deals include Apposite Capital's acquisition of Octavia House Schools and Innervation Capital-backed Melrose Education's continued growth through acquisitions and new developments.

However, the Labour government has placed greater political focus on the role of private providers and perceptions of profiteering. Recent announcements included £740 million funding to expand SEND provision in mainstream schools, alongside increasing scrutiny of private sector involvement. While these moves reflect political attention on the sector, the complexity of needs served by independent providers suggests sustained demand.

Overall, the UK SEN schools market continues to exhibit compelling fundamentals: rising demand, strong investor appetite, and essential private-sector delivery. Despite political scrutiny, specialist providers remain integral to meeting the increasingly complex educational needs of children, underpinning ongoing opportunities for growth and investment.