from The Times, 13th April 2010
The Times has reported that independent school fees look set to rise again this year, ahead of inflation rates. The article writes that several schools contacted who have “already announced fees for September have increased them by between 3 and 4.5 per cent.” In the article the paper lists a number of schools that it had contacted, and references the Chief Executive of AGBIS (Association of Governing Bodies at Independent Schools), who said that while schools will aim to keep increases low, it would be difficult for them to come in under inflation.
The increase in fee inflation is a continuation of an ongoing trend in the independent schools sector. mtm’s 2010 Independent Education Sector Report found that gross fee income has doubled in the past decade in the sector, and that the largest driver of this growth was not growing pupil numbers but rapid fee rises – “up from an average of £5,800 in 1999 to £11,250 in 2009 and averaging almost 7% growth per annum.”
The anticipated rise in fees is likely to put more pressure on parents who already make significant sacrifices in order to pay school fees. In our – free to download - School Fees Payment Survey 2007 we found that 72% of parents surveyed had reduced expenditure in other areas to pay school fees. Amongst these reductions were general expenditure (72%), holidays (71%), and even mortgage repayments (19%) (see chart below).
Parents make significant cutbacks in order to pay school fees
Furthermore, the same piece of research showed that almost 40% of survey respondents displayed some signs of doubt over their ability to pay school fees in the future, this figure made up of 27% of parents who said they would “possibly” be able to pay fees until their children left school, 9% who said “possibly not”, and 3% who said they would not be able to continue.
So what should schools do? Increasing teaching costs, rising utility bills and a rise in NI contributions are all unavoidable factors in the need to grow school revenues cited in The Times by ISBA (Independent Schools Bursars Association). mtm’s associate (and author of the above reports), Gavin Humphries, is clear about his views, saying “schools will have to cut fee inflation”. He suggests that building additional sources of income from fundraising, trading income and establishing daughter schools may all help to curb increases in fees.
It is also argued that operating costs can be restrained, primarily through increasing the numbers of pupil per teacher ratio which has, since 1981, “fallen by a third from 12.6 to 8.3″ according to the Independent Education Sector Report 2010. “The net effect has been to put teaching costs up by 50%. It would be hard to argue that the quality of education in schools had improved by an equivalent 50% over the same period”, says the report.
With some calls being made for state schools to do the same (such as in last week’s TES) an increase in class sizes may be a real and necessary option for independent schools. However, there is a caveat, any core changes in class sizes or school offering should be a core part of school strategic planning, informed by measured parental research in the form of focus groups, surveys and competitor analysis, and communicated by the school properly and professionally, in order to ensure existing parents don’t become alienated.
mtm can help your school enhance its efficiency, increase market share and improve parental satisfaction. For a discussion about your needs and our services please contact mtm.
