What can independent schools do to stay strong in 2018?

John Hutchison, Chief Operating Officer at Gabbitas Education, offers some suggestions

As we ride the waves of political and economic uncertainty that have prevailed over the past 12 months, it may seem difficult to identify the opportunities that lie at the heart of a chaos that we have all participated in – willingly or otherwise. 

Brexit, fall of sterling, wage squeeze, political skulduggery, shrinking chocolate bars, Trump, snap election, rising inflation, fake news, social media manipulation and the rise of the far left and the far right. Few novels have taken its readers on as many twists and turns as the global political scene has suffered over the past year; our very own modern day War and Peace.

Encouragingly, however, and in the words of the eminent Mr Einstein; “In the middle of every difficulty lies opportunity.”

The key to understanding where opportunity lies in our sector is ensuring there is a focus on services to parents. Understanding their needs and expectations is vital and in a time of financial constraints; making ends meet may override the need for a new indoor swimming pool or a school trip to Bolivia. Making parents aware that the school accepts childcare vouchers for clubs and boarding elements should also not be dismissed. 

John Hutchison

At a recent open day, the headmaster proclaimed that his school is preparing its children for “jobs that do not exist today”. A bold statement, some may say, but one that he went on to explain relies on the delivery of a broad, high standard curriculum and pastoral care that is the hallmark of the best in British independent education. 

As the City of London is courted by Frankfurt, Dublin and Paris, it is this hallmark that will – when coupled with the sector’s usual collaborative spirit – ensure that the children of these drifting professionals will remain secure in their well-chosen schools.

Another key element will be the sector’s success in working together to tackle current and future difficulties to strengthen the school network. The expertise for this success may come from unlikely quarters; perhaps we should be looking to those schools that have already ridden out the storm and persevered, rather than those who remain unaffected or protected? 

But there are also pitfalls to avoid. In a time of super-low interest rates, schools should be wary of quick wins to solve balance sheet issues. We recently heard a governor proudly stating the success of an initiative to revalue the school’s assets and which therefore allowed for greater borrowing to boost cash-flow. Ironically, this was a conversation which centred on their decision to ultimately close the school. The debt-equity ratio must be managed to ensure that the school can service its debts when interest rates rise. No matter how valuable your school is, good advice will tell you that it is not a liquid asset and realising the balance sheet value improbable. 

And with recent news that increasing numbers of Chinese families are enrolling their children in south-east Asian schools (where fees are circa £10,000 per year), the reliance on global markets to fill the budget gap may soon need an injection of creative thinking from domestic shores.

Undoubtedly, we should all pull together to make ends meet. 

You can contact John via john.hutchison@gabbitas.com and learn more about Gabbitas here: gabbitas.com 


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