from the Telegraph, 30th January 2010
An independent schools’ advice service, the Good Schools Guide, has reported that an “unprecedented” number of independent preparatory schools have places available at a time of year when they would traditionally be full.
The report in the Telegraph suggests that “small prep schools in particular have been hit by the recession. The financial strain has proved too much for an estimated 30-plus schools which have closed or merged in the past couple of years”.
Although the recession has officially ended, research by mtmconsulting has shown that the full impact of the financial crisis on the education sector may not have been seen yet, and that pupil recruitment over the coming years is likely to be difficult for all but the most sought after schools.
The effects of previous recessions on independent school rolls have tended to have a latency: typically, drops in pupil numbers in the fee-paying education sector are delayed until 18-24 months after the start of the recession. The anecdotal explanation for this (and one illustrated in mtm’s 2007 School Fees Payment Survey publication) being that parents will make significant cutbacks in other spending – in the form of general expenditure, holidays, home improvements, car upgrades, pension contributions and even mortgage repayments in order to maintain their child’s independent education.
Therefore, the impact of the recession on prep schools observed by the Good Schools Guide may well be the signs of this latency hitting the sector. In the mtmconsulting Independent Education Sector Report 2010, we suggested that the latest recession will “cause a larger fall in pupil numbers than in the recession of the early 1990s… a fall in pupil numbers of 1.5% in 2010, 1% in 2011, -0.5% in 2012. As in previous recessions, falling demand will be a particular problem for schools highly reliant on boarding, small schools, those operating in a marginal niche and pre-prep / prep schools which will suffer from parents delaying sending children.”
A recession as sharp and deep as that from which the UK is currently emerging is, of course, bound to have an impact on the independent sector, where fee increases have steadily outstripped salary increases for the past six years anyway. While the sector may be bolstered to some degree by cuts in public spending that we are likely to see following this year’s general election, there is a real and clear need for all schools to demonstrate to parents the value of their true benefits, both real and intangible, and soundly convey these values to prospective parents through effective school marketing and parental communications.
School business strategies, too, are likely to play a key role here. In our schools consulting work mtm has seen a significant rise in schools undertaking strategic planning exercises and looking at future options. Our advice, clearly outlined in the Independent Education Sector Report 2010 has tended to be that “the order of priorities for independent schools over the period to 2020 is: 1) cut costs; 2) explore federation; and 3) find a niche.”
To discuss our school business consulting, parental research and independent education sector-wide reporting with a schools consultant please contact us.
To view the original article on the Telegraph website please click here.