from Funding for Independent Schools, October 2009
mtmconsulting’s Independent Education Sector Report 2010 provides the focus for our Head of Educational Strategy and Schools Research Dick Davison’s article in this month’s Funding for Independent Schools magazine. The report is the second comprehensive overview of the health of the Independent Schools sector, now worth £7 billion annually, predicting that schools will recover strongly from the current downturn. It forsees a significant growth in independent pupil numbers from 2012, not only due to improving economic circumstances, but also due to predicted cuts in public expenditure in the maintained system which will push parents towards fee-paying schools.
The report also warns that the issue of affordability will need to be addressed, particularly if the Conservative’s policy of Swedish style free schools is implemented. mtmconsulting’s Gavin Humphries, author of the report, says ‘Affordability may be falling, but if this can be reversed the potential market for independent schools is very large. We put the figure … at more than two million pupils. However to achieve this, schools must retrain the continuing growth in fees by tackling their finances.”
The target market for independent schools is growing fast, according to the report, but a failure to keep a control of costs has negated the potential for rolls to keep pace during the expansion. With out action, rolls could eventually start to decline by 0.5% per year. A significant factor in cost rises is the considerable growth in staff numbers, particularly as schools strive for an ever lower pupil:teacher ratio. In fact, since 1981, this ratio has fallen from 12.6:1 to 8.3:1, with the net effect of pushing teaching costs up by 50%.
The report also shows that during the past few years, the total numbers of independent schools were increasing while pupil numbers remained relatively static, causing a decline in the average school size. However, one of the effects of the recession will be to achieve economies of scale and minimise pupil costs, with schools growing larger, joining alliances, or being subsumed into groups. Further structural changes include a polarising between ‘premier league’ schools and niche sectors. Premier league schools are those which have established themselves in a pre-eminent position within the market, compared to niche schools who have carefully defined their position in a chosen field, namely special educational needs. The need for school businesses to have a clearly defined marketing strategy, informed by parental and market research (such as mtm’s MANDARIN), is paramount to success.
A Conservative victory in 2010 could provide a strong challenge for the sector, with privately owned free schools attracting pupils from both maintained and independent schools, whilst also driving up standards all round. The Conservatives plan to open around 3,000 new schools with places for around 220,000. The Swedish example shows this is theoretically possible, with 900 new schools opening in Sweden in 15 years.
Forecasts to 2020 contained within the report takes into account the effects of the recession, demographic changes, unrest in the state sector and declining affordability of independent schools, projecting that a strong but short recovery will be followed by a protracted period of decline, particularly if cost rises are not curbed. Further forecasts to 2030 suggests the changing face of education will provide exciting opportunities for imaginative schools and organisations. Longer term pressures such as limited funds, increased regulation and higher parental expectations will repercussions for all sectors. As well as producing new challenges, the report says: “It will mean new ways of doing things in state education – and we think that this is the real opportunity for independent schools. This is the chance to win 30 per cent or more of pupils. To seize these opportunities, schools will need vision and energy. But this abounds in a sector that has managed to stay resolutely ahead of anything thrown at it so far.”
To read the full article, click here.
For more information on mtmconsulting’s Independent Education Sector Report 2010, or to order you copy, please click here.
