Independent schools may now
have reached the limit of parents’ ability
to afford their fees and will have to start cutting
costs to maintain their success.
That is the major conclusion of the first-ever comprehensive
and objective survey of the entire sector, undertaken
by mtmconsulting ltd. The 140-page
report is published on 18 September 2007.
The sector is in danger of pricing
itself out of its market and is especially vulnerable
to any downturn in the financial and business sector.
More than half of all independent school pupils are
concentrated in the south east corner of England,
making the sector highly dependent on the health
of the financial and banking sector and the professions
and businesses which depend on it. Between the end
of 2001 and the end of 2006 average school fees rose
by 39% – compared
to an 18% rise in average earnings. In fact, the situation
is even worse for the clientele of independent schools – the
average earnings of managers and professionals grew
by only 15%.
If the sector fails to curb
the ever-rising cost of school fees, the report says,
pupil numbers will start to fall. The 14 per cent
of independent school parents who are “atypical buyers” – those
coming from outside the independent schools’ heartland
of the professional and managerial classes – will
be the most vulnerable. The report says: “The
most pressing scenario facing the sector is therefore
one of cost-cutting – this will be the primary
tool for schools in a situation of declining affordability.”
Amongst other findings, the report
also says:
The recent declines in boarding and in
single-sex girls’ schools will continue;
Although the national
birthrate declined during the 1990s, the number of
children born into managerial and professional families
has been increasing – an
increase from which independent schools have failed
to profit fully;
State schools are unlikely in general
to become more attractive to parents over the next
5-10 years, handing another advantage to the independent
sector;
The growth of commercial groups of schools,
like Cognita and Alpha Plus, will continue, raising
the number of children they educate from 3.5% of
all independent school pupils to more than 10%;
An
increasing number of schools will join ‘federations’,
which give economies of scale and – in the
case of charitable schools – may help in passing
the forthcoming public benefit tests; some forecasts
suggest that one-third of all independent school
pupils will be in schools which are members of federations
or groups;
The market for independent
schools is polarising between ‘premier league’ schools and ‘niche
schools’ with ever fewer opportunities for
good, medium-sized all-round schools; schools will
have to differentiate themselves more clearly in
their market.
The report has been written
by Gavin Humphries, an expert in consumer research
and market analysis. Formerly the Research & Analysis
Director at Datamonitor, he now runs his own consultancy
helping companies to understand and profit from social
trends in the UK.
The mtmconsulting Independent Education
Sector Report 2007 is available
from: mtmconsulting ltd, Portland House,
43 High Street, Southwold, Suffolk, IP18 6AB (tel
01502 722787; email office@mtmconsulting.co.uk),
price £350 + VAT & postage.
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