Top 10 challenges faced by private schools
From rising running costs to competition from state schools, Ian Wakeling, partner at Bidwells, discusses the top 10 challenges faced by private schools
There will always be challenges for schools, but the independent school sector has its own specific issues to address.
The challenge to stand out to the paying parents. The challenge to provide education worth paying for, that sets the pupils up for future success, and the ongoing challenge to ensure their pupils are stimulated day in and day out.
Along with that the rising costs in educating Britain’s finest is a challenge as profit needs to be made in order to run the establishment.
Bidwells recently carried out research to identify biggest issues facing private schools and the implications of them.
Challenge 1: Rising running costs in schools
There is a growing tension between the affordability of fees for parents – particularly at smaller schools – and the rising cost of delivering all the educational elements expected. Throughout the UK, fee increases have exceeded inflation over the last 10 years. This means that some parents are finding it harder to fund independent education. Independent schools need to be even more creative in seeking other income-generating activities which can help to offset rising costs.
Challenge 2: Competition from state schools
With the affordability of school fees under pressure, and some local state schools performing well and highly rated by Ofsted, some parents are understandably questioning what additional benefits they are buying from independent schools. Staying competitive and adapting facilities suitable for the next generation of pupils will be key.
Challenge 3: Parental demographics
The demographic of parents is changing, with traditional boarding families and ‘first-time buyers’ having different expectations and aspirations. This can bring added pressure to schools in terms of their marketing as they try to appeal to both groups. In addition, for schools to appeal to a wider market, many have looked to to market their brand abroad and expand with franchises across the world.
Challenge 4: International students
UK students are being ‘priced out’ of independent schools by international students who can afford higher fees, driven up by increasing costs.
Challenge 5: Crisis of identity
With pressure to generate extra income, against maintaining a charitable status, some schools struggle to balance being an educational provider, a charity and a business.
Challenge 6: Lack of financial reserves
Many schools do not have financial reserves for property improvements and are ‘fire fighting’ in terms of keeping old or listed buildings fit for purpose. There are usually other issues such as site constraints, access and transport links. Maintenance is also a challenge with many establishments needing to ‘fly the plane whilst building it’. Jobs often take longer than the scheduled period during the holidays and run into term-time, causing timetable disruption.
Challenge 7: Limitations in terms of generating additional income
Some schools are trying to raise income by letting out facilities during the holidays for conferences and events. However, this is currently not proving a successful financial strategy for many schools as the opportunities are limited and the profit margins small. Such activities are a further burden on, often stretched, facilities staff and adds to the maintenance costs of the property.
A way forward could be looking at innovative ways to create revenue in the same way as some Oxbridge colleges, which invest in property outside the campus and use the rental income to support academic activities. Other options including fundraising from alumni which has varying degrees of success in the UK, and for the top schools overseas franchising is another option.
Challenge 8: Skillset and commercial acumen
There are increasing and rapidly changing demands on a school’s senior team. Bursars and governors need to be commercially astute to ensure their establishment survives and thrives with the emerging challenges that lie ahead. Long-term financial strategies need to be in place, as well as consideration given to more radical ways to manage the school estate.
Challenge 9: Property expertise
Bursars need to access professional advice on property maintenance and improvements to ensure that initiatives meet with success. Having close relationships with the local planning department is key, as are project management skills to see new developments delivered on-time and on-budget.
Challenge 10: VAT and end of relief on business rates
The threat of changing schools’ charitable status will see increased tax liabilities for both schools and parents; the loss of all or part of the tax relief may have to be passed on to parents in some form, rendering many unable to afford independent education.
Schools have few options, and many will be reluctant to increase headcount because of building constraints and the sizes of classrooms. Many independent schools pride themselves on smaller class sizes and the enhanced teaching environment this creates. These interventions could result in a split market with independent education becoming a luxury brand, financially accessible only to the very wealthy.
Challenge 11: Keeping the pupils stimulated
Recruiting pupils and attracting parents to spend their hard earned money at their private school over another is a challenge in itself which remains ongoing. And the curriculum needs to show that the children get their monies worth in quality and variance of education. Both in the classroom, on the sports field or out on trips hiking or on sea, the children in private school remain your customers through out their time there and it is under a microscope that the quality of the education is watched by paying parents.
Furthermore, with economic uncertainty, independent schools are challenged with preparing the next generation to be robust, intelligent and ready for climate change, economic change and more natural disasters.
Challenge in Independent Schools
The United Kingdom offers a host of elite British private schools. Think Eton or Westminster, which have educated many of the country’s political and professional leaders.
However, only 7% of all students receive this kind of education, and there is a huge divide between the private and comprehensive school sin Britain today, which effects the opportunities for students later in life. Watch the interview below on the issues facing private schools today.
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